Sometimes, a picture really is worth a thousand words:
Whether you look at international comparisons such as this one, or historical comparisons, it is clear that our government debt, though large, is not unsustainably so. Greece’s government debt is 145 per cent of its GDP; ours is 80 per cent (Eurostat).
Our financial sector, however, holds over 600 per cent of Britain’s GDP in debt, and as we reported earlier today, the Vickers report is doing nothing to stop that proportion growing. Icelandic financial debt hit 1000 per cent of its GDP before reality caught up with them.
We do have a debt crisis, but it’s not government debt, it’s banking.
(Chart from Business Insider via The Automatic Earth)
• Implementing Vickers won’t stop the next crisis – Josh Ryan Collins, December 20th 2011
• Cameron’s excuses don’t add up – Cormac Hollingsworth, December 13th 2011
• Trouble ahead for Cameron: Majority of Euro rebels were from class of 2010 – Shamik Das, October 25th 2011
• A damp squib or quiet radicalism from the Vickers Commission? – Ben Fox, September 13th 2011
• The Vickers report lacked ambition and lacks bite – Joe Cox, September 12th 2011