Yep folks that is a whopping 2 TRILLION POUNDS that our wonderful government has managed to rack up.Welcome to the uk's ten year or more depression.Has'nt Gordon done an excellent job in screwing us for years to come.And if you want a real laugh he thinks the economy will pick up in a few months-what planet is this great leader of ours on?;

Where did you get that info from??

See, not a one line post.

Originally posted by uk today
Yep folks that is a whopping 2 TRILLION POUNDS that our wonderful government has managed to rack up.Welcome to the uk's ten year or more depression.Has'nt Gordon done an excellent job in screwing us for years to come.And if you want a real laugh he thinks the economy will pick up in a few months-what planet is this great leader of ours on?;

I think you should ultimately thank BUSH
he never had his head in the game...

What I can not understand is this - if the govt. has bailed all these banks out with "our money" then where did it come from and why did we all have to keep paying more and more taxes previous to this mess . Why did we all not get a tax rebate last year , for instance , if all this money was in the coffers . I am seriousley considering going on the dole for the first time in my life after working for 40 yrs . Why not ?

Controlled demolition.

Gordon's in over his head. Probably doesn't even know who's pulling the strings.

Hi Rockpunk ! I'm not an economist , far from it . Your first paragraph said that the govt gets a percentage then where is all that percentage money from over the years if, as you say , it is not money lying around ? In my simplistic thinking - it either is taxpayers money or it is not . Regards , matey.

Bedtime for me ! Keep threadin' . g'night .

The percentage that the Government pays to bond/treasury holders is paid through the Federal Income Tax. Before the "bailouts" the Federal obligations from Income taxes to pay the debts was I believe in the 20+% range of the total revenue. This is of course to pay for matured debt, 1yr 10yr 30yr notes etc.

The excess money from Federal taxes is used to pay for the National Budget, what we spend our money on. After our debts are taken care of, and we make our budget, the difference is then made up through another sale of debts. This new debt covers the Black Holes in our budget sheets, so we remain in operation.

The compounding of national debt is the worrying problem.. if we continuously spend through debt our national obligation to the debts increases every year, of course, depending on maturity of the debts. One year it's 20%, 23%, 25%, 30%, (actually increases at a much lower rate normally, by fractions of percents) ..

When we add massive debt onto the balance sheet of our government, we risk defaulting on the loans given to us through the securities holders we sold to.

If we add $150 billion here, $700 billion there, add another $800 billion, plus the various obligations through the FDIC and Federal Reserve, like Back Stop loans etc... the next years revenue, a huge portion is going to pay back the loans..

In a depression, when unemployment is higher and corporate profits are sometimes nonexistent, the Federal Revenue drops dramatically.. (and states, insert Kansas, California, Michigan etc) and thus a much larger portion of the Federal Revenue has to go to paying the debts .. which leaves a significant hole in the budget that has to be filled with .. you guessed it .. more debt. It honestly is not that much different then a typical Ponzi Scheme.

Eventually, either we find a way to raise revenue, cut spending and stop using as much debt ..

Or we default, some time down the road..

Or peoples and entities stop buying our debts. Which is just as bad.

The Government CAN and DOES print money from nothing, but the rate at which money is simply printed is pretty stable.. (actual cash) .. this keeps the dollars value stable and thus the economy.. If we printed dollars to pay the debts, the effects of hyper inflation would destroy the economy. Likewise, if you cannot maintain the proper levels of inflation (roughly 3-5% in past years) then deflation occurs.

If we could just push the "Easy Button" and *poof* trillions of dollars appeared, to pay for all these bailouts and everything else we waste money on, the Dollar would cease to exist. Well. It would exist, just in very, very large denominations.

Originally posted by longdog
What I can not understand is this - if the govt. has bailed all these banks out with "our money" then where did it come from and why did we all have to keep paying more and more taxes previous to this mess . Why did we all not get a tax rebate last year , for instance , if all this money was in the coffers . I am seriousley considering going on the dole for the first time in my life after working for 40 yrs . Why not ?

It's called mortgaging the future of the British people. Basically the government will probably leverage the debt accrued on future generations.

This was done with the Lend Lease programme of WW2 and the loans borrowed from the US to finance war. We finished repayments on these debts only five years ago.

You may ask where is the money going to come from seeing that the financial markets are no longer lending. Well Brown is going to do two things; he will start printing money and he will try to convince everyone that it will be resolved by positive future equity or he will sell UK debt to foreign investors, perhaps the US, and use these takings to pump in money into the economy and service the interest and the interest on the interest of the debt being repaid to the investors. You can't do both.

The ultimate option is to devalue the currency and screw the rich. I don't think vested interests will tolerate this.

Learnt today that the 2 trillion national debt is equivelent to 33,000 pounds for every man,woman and child here in the uk.I'ts frankly mind -blowing.