The UK isn’t Greece, it’s Iceland

Really. Why is it 80%?

Ah yes. The government isn’t going to pay any of those pesky civil service pensions. That’s spending, so its optional. No contract is there.

Omitted from the Books. Current cost, 1.3 tn on top of the 1.05 tn ‘official debt’.

Then there is that little thing called PFI. Again, thanks to Bernie Maddoff’s accountant, that’s off the books too.

State pension? All those low paid civil servants, say 5 million, only manage to run up 1.3 tn of debts. There are lots of people with state pension entitlements. Ok, its small at 5K pa, but what shall we say, a tad under double the cost of the civil service pension? 2.4 tn (an accurate figure by the way). All thanks to those nice folks who used to work at Enron, we don’t have those on the books.

State second pension?

Guarantees for ex state enterprise pensions schemes such as BT. Current deficits 100 bn

Nuclear decommissioning. Money taken up front – its a debt. 100 bn

…

Yep, all the debts have been hidden off the books bar Gilts.

Now for that AAA rating. That is just the rating for the holders of Gilts getting their money back. It says nothing about the government’s ability to pay its other debts. Those debts are to the likes of you and me, and the ratings agencies view is that we get cut first, because governments will want to carry on spending, and they will need to borrow. Citizens are expendable.

Now for your figures.

1. Banks hold assets against liabilities, and they have to have an excess of assets. Otherwise they are bust.

2. Most individuals again have more assets than liabilities – property against mortgages. Some have negative equity, but the vast majority are in positive territory.

3. Corporates – again have assets greater than liabilities, or they are operating fraudulently.

That leaves government. Governments have vast debts, mostly off the books. 7 tn present value (ie rising with inflation), against an “income” of 0.55 tn. Of that most of the money is earmarked not for paying debt, but for providing services. The government doesn’t have assets it can sell to raise cash. e.g Sell off a hospital. Ah but people need hospitals. So they rent it back. It’s either debt payments, or rent. Same effect on cashflow.

They could try and say, look if we book people as slaves/serfs, we can give them a book value, their future tax income. However, people have this little pesky problem that they don’t like being treated as cash cows. They want something for their taxes – services.

So the UK government is bust. Pure and simple.

Good article.

Lord blagger – maybe you should read why 2012 coudl be an interesting year for european banks, according to Reagan’s ex-adviser…
http://www.financialsense.com/contributors/lee-adler/2011/12/14/david-stockman-on-the-coming-euro-train-wreck

I think cable does want the other areas to grow, but lets be honest any form of economic change will cause some pain.

Now the city will not like it if other areas are favoured over themselves even though it would be more beneficial for the overall economy so yes it is right to curtail the power of the city, if we do not do it now it will be harder to do during any economic boom as the city would just say the boom is engineered by us, which would not be necessarily true.