How Money Works: Who owns Britain's debt?

[super jumbe]

The national debt is in the news almost endlessly, but who on earth does the UK owe all these billions to? You might be surprised.

Just like you and me, if the Government wants to spend more money than it has in the bank, it has to borrow it.

As with consumer borrowing, money isn?t lent for nothing and the Government has to pay interest on its debts.

The state has long been spending more money than it receives in taxes and has racked up an IOU to the tune of ?1,000billion, a whopping two-thirds of Gross Domestic Product.

Internationally, Britain is within the top 10 of biggest debt-laden countries, though it?s the United States and Japan that top the list.

Government debt is owned by us, the taxpayers. This means every UK citizen now owes approximately ?16,000, costing ?2,000 in annual interest.

http://uk.finance.yahoo.com/news/how-money-works-who-owns-britains-debt-144729711.html

[GastonJ]

[IMG]
Government debt is owned by us, the taxpayers. This means every UK citizen now owes approximately ?16,000, costing ?2,000 in annual interest.

http://uk.finance.yahoo.com/news/how-money-works-who-owns-britains-debt-144729711.html

Makes Wonga look cheap really doesn't it, tho I do doubt the 12.5% interest rate - I don't think it's been higher than 6% for many years now, more like around 4%. At least when you don't pay Wonga they only take you to court, the others just invade.

[southpaw]

3 options
file for bankruptcy
I-v-a
offer em ten bob a fortnite,

sorted

[firemouth]

UK bond yields(10 year) are under 3% currently.

debt payments for 2012 were @ 3% of GDP.
it was at least 1.5% higher through all the first 10 years of the last conservative government.

so in fact we are paying less per capita now, than in the 80's

[albertros]

This statement probably just shows how little I know but ...

print the money, then pay the debit.

or print dollars and pay the debit????

[gmb45]

printing money the quick way to bankrupcy, it just devalues money, if that was the way out every one would do it.

[Shady]

its all 1 and 0's on a computer somewhere.. just add a couple more 0's to the end.
Moneys based on gold yeah?
so lets way we owe china ?1000000 but we only have 10,000. The bank of England just types an extra couple of 0's into the computer.. hey presto, ?1000000. Are china really going to pop over and ask to check if weve got the gold to cover it?

[Meat-Head]

I-v-a

What?

This statement probably just shows how little I know but ...

print the money, then pay the debit.

or print dollars and pay the debit????

I agree with that 100 %

printing money the quick way to bankrupcy, it just devalues money, if that was the way out every one would do it.

Not with you - i have in my wallet ?40, i have just photocopied it now have ?80, do you want me to buy you that new tv?


So as long as DK gets a BIG cut, the prinitng presses are set to FAST
ALL the cash machines are filled to the brim, all the peasants go to the cash machines.

Ask for ?20 get ?40, statement shows only ?20 gone out banks all say

"Our bad we was sending a Tweet, keep the extra ?20 at our cost"

Everybody has an extra ?20 to spend - except non DK members

Are china really going to pop over and ask to check if weve got the gold to cover it?

No they just log onto DK and see one of GMB's threads

[GastonJ]

IN theory you can only print as much money as you hold value in gold, or that's how it used to be. That's why the US made a point of buying gold and making it illegal to own over a certain quantity of gold in the 1930's. QE is about printing money, which is what's been happening for the last 2 years, I don't recall the exact amount that has been printed and made available. However that leads to devaluation as GMB says (he must have read it somewhere ) and also leads to inflation that we cannot afford. Inflation goes up, people want more wages, and so it spirals like we did in the 70's to a point where we're really knackered, inflation high, wage rises high, things become unafforable.

They now issue bonds, as firemouth says, to enable them to meet their debts, rather than gold - that's why it is so important to keep the AAA credit rating that we had, the lower your credit rating the more interest you pay. Right now the interest rate for UK bonds is still quite low compared with Italy. It was bond interest that killed off Greece. I just hope it stays low.

What is missing is investment by the UK government in infrastructure, which is where the UK has value, not in these junk stupid investments that the government keeps coming up with. Invest wisely in building roads, airports, shipping ports, hospitals, rail, telecoms etc and it will pay back. However the government we have doesn't appear to want to do that and is looking at private industry to do it instead. Sadly this time around we have no family silver (gas/oil) to sell on and rake some money back, which is what Maggie did. Nor do we have an manufacturing industry left to make goods to sell abroad and pay our way out.

The other thing that is failing is the greed of the banks. The BOE base rate is 0.5%, so why are new mortgages over 4.5%, while interest rates to savers less than 1%? effing greed that's what. The banks got us into this sh*t and are quite happy to take the money and keep it. They can't lend it because people don't feel it's safe to borrow, and tbh the rate they're lending it at is criminal, more so when you look at the rate they're payng to savers. The banks are investing in schemes like PFI whereby the government pays them over the odds to pay us back the money they borrowed while dropping the rest of us in sh*t with it all. Take a look at the GBS/Citibank deal for a prime example of the taxpayer paying the banks to give us our own money back.... This replaced HM Treasury for government departments to make payments and bank with. All departments were forced to use GBS and Citibank instead of HMT, stupid contract HTM were more than capable. FWIW GBS is run by RBS, now there's a surprise.

[Meat-Head]

IN theory you can only print as much money as you hold value in gold, or that's how it used to be. That's why the US made a point of buying gold and making it illegal to own over a certain quantity of gold in the 1930's. QE is about printing money, which is what's been happening for the last 2 years, I don't recall the exact amount that has been printed and made available. However that leads to devaluation as GMB says (he must have read it somewhere ) and also leads to inflation that we cannot afford. Inflation goes up, people want more wages, and so it spirals like we did in the 70's to a point where we're really knackered, inflation high, wage rises high, things become unafforable.

.

So your saying the only good thing about Ingland is DK and it's members!

Ok it's not going to happen, but here is ?9999999999,99999999999,9999
it's your job to go to the entire Ingland and hand it all out, on the condition they cannot send it 'home' out of Ingland.

Will this help or not?

[GastonJ]

What I'm saying is:

The banks got us into this
The banks are being awarded contracts by the government, paying them even more money to give us back the sum we lent them. So they're getting the money twice and paying us back once.
The government is more interested in making investors more money

Manufacturing was the traditional way out of this. The UK only makes money if we actually *sell* something to other countries. We have no bloody manufacturing industry left. We have no oil, no coal, no gas, nothing to sell. So the government is looking at the finance industry to get us out of an effing mess that they got us into with their own effing greed.

Will the last one out please pay the bill to have the electricity reconnected so they can switch the light out as they leave.....

[Meat-Head]

What I'm saying is:

The banks got us into this
The banks are being awarded contracts by the government, paying them even more money to give us back the sum we lent them. So they're getting the money twice and paying us back once.
The government is more interested in making investors more money

fine but that ?9999999999999 would it working handing it out?

[GastonJ]

As above, we need to make money from other countries. As it stands we have no means to at all. Having ?10 trillion in your pocket would not help, you need to get foreign currency by selling them goods, taking their hard currency in exchange, that way they owe you - which is the whole point of capitalism really. Now having $10 trillion dollars, or 100000 trillion yen might help, at least then they'd owe us.