Government Debt Interest Payments Now Equivalent to over £4,000 per Household
In the News
www.thisismoney.co.uk/money/markets/article-12229671/UK-debt-bill-hit-500bn.html
Staggering level of debt interest caused by government policies, EU membership and consumer spending. So imagine of the tax you pay in your household over £4k is being spent just on interest. We left the EU with about £1.8 trillion of debt but in the last seven years have added another 50% of that on top through the Covid pandemic, cost of leaving the EU and Ukraine war and economic damage this has caused to the world economy. Of the original debt about 1/3rd can be placed on EU membership payments which averaged a net £7 billion a year over 40 years and with compound interest over 40 years takes us to about £600 billion, one third of the that £1.8 trillion debt which is before you factor in the huge trade deficit with the EU and many other factors. The huge increase in population has meant we have become a much larger importer of food and a large increase in international workers in the UK who export a portion of their wages.
I personally feel if the government had simply refused to borrow money and sell assets decades ago the economy would have hit a huge recession and at that point we would have had to face our issues far sooner and many of these issues wouldn't have been allowed to build up over time hidden by borrowing.
What this means in reality is more poverty, less NHS services, more crime with less policing, less benefits and generally a lower quality of living for most people.
Yet still the government and media don't look at the big issues of our economy but focus on trivia or personalities most of the time.
Even if we face facts and turn the economy around to start paying this debt burden there is probably 50 years of austerity. If we doubled our payments from £4k to 8k per household per year so we actually started paying off the debt itself that would be about £200 billion a year paying off £2.6 trillion of debt, even if you don't factor in interest that is 13 years of payments but in reality at that level would still take 20 years to pay off but I think the UK economy would struggle to pay £150 billion a year and that's why I would predict a timeline of more like 50 years plus global warming is also going to add a huge amount of costs.
I am not particularly astute when it comes to politics but someone I had a conversation with seemed to think that because we are heading toward universal basic income it is part of the plan to borrow because it will be eventually written off. The way it was explained to me for the future seemed highly plausable, but hey, what do I know lol
Lynibis Countries that default are given an extremely rough time by the international community and there is no way we are getting a universal basic income unless its extremely low in value. Just look at the history of countries that have defaulted on their debts long term. Often their international assets are seized, their supply of credit is removed. It can become a nightmare. The burden of debt on everyone is like a ball and chain financially but you can't just remove that ball and chain and walk away from that debt. So much easier to tackle the problems. It's likely defaulting will lead to even worse levels of poverty. Often you get hyper inflation as sterling would have no guarantees of being honoured.
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