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Old 28th Dec 2009, 11:18
  #72 (permalink)  
Biggus
 
Join Date: Dec 2001
Location: The Roman Empire
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Scuffer,

This is a thread about military pensions - hence my comments about them, but no sane politician will claim that reductions in public sector pensions are the "primary" means of reducing public sector borrowing!

LOOK AT THE SIZE OF THE PROBLEM!

The government is borrowing about £180Bn (billion) more than it earns this year. Under Labour plans that ANNUAL deficit will be reduced by half in 5 YEARS!! That means in 5 years time they will only be borrowing about £90Bn more than they earn!!!! Assuming a roughly even decrease this means borrowing £160Bn, then £140Bn, £120Bn, then £100Bn then £90Bn. So, in 5 years we have halved our annual borrowing, but built up a debt of £610Bn (160+140+120+100+90) IN ADDITION TO THE £800Bn ish we already owe. So we will then owe £1,400Bn, and are still not even running an even budget!!! We will potentially be in a worse financial position than we were at the end of WWII, when we were flat broke. We will need to get a budget back into balance, then credit, and pay off about £800Bn of accrued debt to be back in the position we were in before the credit crunch started in 2008.

In 2008-09 the government made about £155Bn through income tax, at rates of say 20 and 40%. Your idea of increasing income tax by 10% would raise, being generous, about £50Bn a year extra for 2 years under your scheme. This would be painful for many, and while it obviuosly would help, will be nowhere near enough on its own, or applied for long enough.

You can expect widespread cuts across the whole of government once the general election is over, and the politicians start to come clean. As some examples, perhaps say £3Bn off the defence budget, less money for councils, capital projects (e.g. motorways, etc), 10% reductions everywhere except the NHS, etc, for the next 10 to 20 years to get out of this mess. That is the true scale of the situation.

Just remember, when the politicians talk about reducing government debt, they are referring to the ANNUAL figure, not the OVERALL figure. It's no real secret, and not hard to confirm all this, at least the basic numbers, just do some searching using google!
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