Hi Guys,
I wish to respond to comments made on the first page of this thread.
I had hoped to comment earlier, using quotes from one of the financial newsletters I subscribe to, which I believed was still on my system. However, I have been unable to find the quote I wanted so I am going to have to quote, as best I can, from other sources and from memory. I’m not a finance professional, just a small-time, civvy, personal investor, but I’ll do my best.
Alber Ratman had commented: Cut , cut , cut... Got sod all to do with Beagles favourite subject, but a strong defence is only possible with a strong economy.. That Gentlemen is the truth and our economy is a lot weaker that many on here think it really is.
Melchett01 had commented: Sixth largest economy in the world and sixth/fifth (or there abouts on both counts) largest defence budget even accounting for a somewhat anaemic economy. Given that, why can we not afford to defend the country properly? Or would it be more accurate to ask why do politicians choose not to defend the country properly?
O.K. Here goes with my best attempt to explain. At the end of the financial year ending March 2017, UK government gross debt was £1.72 trillion, equivalent to 88.0% of GDP – and mounting! We're still borrowing year on year. Bear in mind that this is just the ‘on-balance sheet’ public indebtedness.
If you then include the ‘off-balance sheet’ items, such as: -
1. public sector pensions, (apparently the largest item) some of which have no investment fund and are paid directly out of revenue; (i.e. teachers, fire brigade, police, etc.), and black holes in the funds of the remainder resulting from low interest rates.
2. Nuclear decommissioning,
3. Hinkley Point,
4. PFI contracts; (hospitals etc.),
5. Government’s stakes in RBS and Lloyds Banking Group.
Then according to an article in the Daily Telegraph these could amount to a further £4.84 trillion. This would make the total government indebtedness amount to £6.56 trillion. (A trillion is a thousand billion).
According to ‘Full Fact’ each year the government pays £33 billion in interest on its debts.
If to the above is added total private household debt, which in 2017 was 1.63trillion, this makes the total £8.19 trillion Grand Total.
In short, the nation is in a similar position to Carillion just before it went bust. We are like a very big firm that is insolvent and teetering on the edge of bankruptcy. We are able to function on a day to day basis, but if all our creditors demanded their money back simultaneously, we would be BUST and into an Argentine style sovereign default.
That's why we can't afford proper defences but only something that looks like defences but in truth is only a sorry shadow of what it is supposed to be. Please don't ask me how this will end.
Best regards,
BP.