On 16/02/15 17:31, Adrian wrote:
On Mon, 16 Feb 2015 16:46:29 +0000, Capitol wrote:

Until spending reduces below income all that happens is that you become
bankrupt as you can't pay your debts.

The UK is a VERY long way from being insolvent, let alone bankrupt. Our
debt-to-GDP ratio isn't even THAT high. Japan's is nearly three times
ours, and the US is over 100%. Germany isn't that far behind us, either.

http://en.wikipedia.org/wiki/United_..._national_debt

"The United Kingdom National Debt is the total quantity of money
borrowed by the Government of the United Kingdom at any one time through
the issue of securities by the British Treasury and other government
agencies.

As of Q1 2013 UK government debt amounted to £1.377 trillion, or 88.1%
of total GDP, at which time the annual cost of servicing (paying the
interest) the public debt amounted to around £43bn, or roughly 3% of GDP."

So we're OK as long as no one calls us on the debt...

Whilst not technically bankrupt, I liken it to a spendaholic jugging a
load of credit cards. Fine as long as nothing upsets the delicate balance...

As a measure of how useful it is as a metric of financial health, Russia
sits at 10%, close to such shiningly healthy economies as Uzbekistan and
Paraguay, with Haiti at 15%.

In my example, we're the "spendaholic", they'd be the "heroin addled
drug users". Fine, we're better than that - but not a hugely useful
comparison.

If the UK really were near-bankrupt, we wouldn't be one of just twelve
countries to have S&P's highest possible credit rating - AAA - nor one of
twelve to have top tier by DBRS, nor one of thirteen top-tier by JCR.

Ah - S&P the reliable and unbiased credit assessment agency...

Of those credit ratings who don't put the UK in the top tier, if we were
that deep in the ****, the UK wouldn't be one of four countries to be
just one notch off top (held by twelve countries) in Fitch's ratings - AA
+ below AAA - nor would we be one of three countries to be one notch off
the top tier fifteen in Moody's - AA1 instead of AAA.

Unless, of course, you know something that none of them do? No, thought
not.