Another week slips by and other than the odd story about hose pipe bans, record temperatures or other such weather related stories the spectre of our impending doom as the markets implode and Europe considers closing some of it's smaller countries remains centre stage. As Prime ministers, Presidents and finance ministers scuttle from country to country cap in hand begging for a few sheckles to tide them over I thought I'd take a look at the size of the problem to see if Mr Average here could lend them a hand and offer some considered advice.
Being such a monumentally gargantuan behemoth of a problem as the combined debt problems of our continental cousins is, I hesitated. The size of their credit card bill is so eye wateringly large that I almost wet my pants. I had a rethink and decided on baby steps, looked closer to home and decided to take on the black hole in our countries finances first. If you are of a nervous disposition I suggest you read the next few paragraphs from behind the sofa ensuring protective eye wear is worn at all times. May I also suggest you ensure that your underwear is of a substantial nature as the ride is going to get choppy. To make it more fun let's do this game show stylee, keep the mood light, everyone likes a little competition.
Question 1, this is for the portable TV, how big is our debt? The answer is fucking massive (the swearing is in context trust me) by massive I mean larger than Jeremy Clarkson's ego. In fact it currently stands at around £950 Billion or just under £1 trillion in old money. Government debt is usually measured as a percentage of GDP. GDP (gross domestic product) is a measure of all the goods we make and all the services we sell for the whole country in the entire year. Currently we owe around 66% of GDP. Let's put that into context, if you were this much in debt and you earned £40k per annum that means you just got a Barclaycard bill for £26,400. That's definitely getting stuffed in the back of the sofa, can't let the wife see that one.
Question 2, this is for the John Lewis cutlery set, with all these cuts how much will the debt have gone down by in the next 6 years? The actual answer is this was a trick question. By 2016/17 the debt would have gone up to over 80% of GDP and stand at around £1.5 trillion pounds sterling. So Mr Context has somehow managed to get a new job and he is now on £50k a year, but unbeknown to him Mrs Context has been hammering the plastic and he now owes his flexible friend a whopping £40,000. We aren't cutting our debt we are just trying to stop it getting too much bigger, not quite what we get told is it. Neither side have a plan to cut the debt, one wants to make it a lot lot bigger.
Now questions get more difficult and this is for an Ipad 2. Question 3, How much of the current debt was caused by the bankers and the debt crisis? This is a toughie, the bloodsuckers are to blame aren't they, surely it's got to be most of it? I'm going to have to hurry you for an answer..... Times up, the answer is none of it, the numbers quoted above and supplied by her majesty's government in the budget statement doesn't actually contain any of that money. 'Why is that', you ask, well the bank bailout was initially costed out at around £500 billion, but most of this was in loan guarantees and underwriting so we actually have no idea how much it could cost us?
The only money actually spent was a mere £50 billion that we used to buy shares in our failing banks and this money could yet see a positive return, in fact we could make money on the whole deal, but that is highly unlikely. If it all went completely tits up tomorrow then me could be in hock to the tune of £2.2 trillion. Basically Mr Context has got home to find the wife has run off with a Spanish waiter and they are sailing the med in a posh new yacht kindly funded by Mr Context's red hot credit card. The Bailiff's have knocked on the door with a court summons for a mind blowing £127,000.
Okay contestant, you're two questions away from the star prize. Question four is for £2000 in cash. The question is as follows; The Chancellor of the Exchequer said that by 2016 the UK will have balanced the budget and we will then live within our means, is this true? You're going for true, are you sure? That's your final answer? And our survey said.... unlikely. Sorry contestant you went for true, but history says otherwise. Balancing the budget just means not borrowing any more and we will still have the massive debt hanging over us. It's highly unlikely that any government no matter what side of the political divide they are from will have the balls to take on the total debt, the pain would just be too great. To pay it off we would need to run massive surplus's for decades to come. If we reintroduced slavery and manual labour for the under 9's we might have a chance, but I don't see those as vote winning policies for the 21st century. In the last 33 years we have run a surplus just 5 times and these were tiny ones whos combined value is less than half of the debt we will run up in 2013 alone.
Now deep breaths, the final question is for Bully's star prize, a slightly crap speedboat. Take your time, we all wish you well, good luck. For this week's star prize Question 5 is (dramatic pause) is this the worst the debt has ever been? The clock is ticking , queue the countdown clock, I need an answer! You're going for yes, this is the worst it's ever been. I'm so sorry love the answer is no, this may be the most money in actual terms that we have owed, but in terms of GDP we have been a lot worse off. These were in times of war and we did spend the money on beating Napoleon, then resisting 2 German attempts in world domination in the world war series, but we have been up to around 250% of GDP on these 3 occasions so it's not all doom and gloom, well maybe a bit.
So you go away with nothing except a tacky piece of TV memorabilia, thanks for playing!! As you can see we are in really deep and we really need to reassess what we as a society think is really important and what we really need to survive. Do we really need all this stuff? Currently we spend more on our debt interest charges (£48 billion this year) than we do on most of our government departments. Only Social Security and Health and Education have bigger budgets than this. Does it matter which bunch is running the show? Not really because the red ones will just run the debt up quicker, but the blues will get there in the end as well. This debt has been used to buy your vote every 5 years or so. Did the bankers cause this, not really, they helped, but we took out the inexpensive loans to buy shit we really didn't need, no one was forcing us. Collectively we've been very greedy and now the shit has very much hit the fan. We need to learn to be happier with less and pay for it with our money not someone elses as they will want their cut some time soon
Now I'm off to watch Man v Food on my unfeasibly large TV.
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