The problem is that while the debt grows and interest rates remain high, the average tax payer is funding interest payments to people who can afford to invest in private pension schemes and GILTs. It is redistributing wealth away from public services and into the estates of the well off: the cost of servicing the debt will soon be greater than the amount spent on education.
6:50 UK Debt is not going up because people "want" to save with the UK. I can bet overseas investors will own less and less of the debt percentage with time. Central Banks and Pension Funds ownership is merely a function of perpetuating a flawed system.
Very good presentation, small point re the U.K. national debt from 1694. At that time Scotland had no share of the debt until 1707 and part of the compensation for taking on the English National debt was called “the equivalent “ .
The major banks and public traded companies all have massive debts; to their depositors / savers in the case of banks and to their shareholders in the case of publicly traded companies. It is notable that banks 'like' to be indebted to 'you' because you deposit your money with them and similarly large companies 'like' being indebted to shareholders because it means people want to buy (and are buying) their shares / stock and the company's valuation and share price increases. The government talks about debt as if it were teaching 3 year olds to run a toy sweet / candy shop.
If the Government own the Bank of England and we own the Government, do we then pay interest on our interest that we charge ourselves. Do we own the bank of England, if so where does its profits go? Do the pensioners the get an increase for pay offing the National debt interest bonds? What are the monthly interest rate repayments.
The taxpayer is paying the interest on the debt but only the holders of government bonds and private pension owners will receive any of this money. Its a shameful redistribution of tax to the wealthy.
I'm confused how on earth is 2 trillion debt a good thing for us all! With the banking crisis in 2008, Brexit, Covid, and now the war in Ukraine to add to it all the cost of living is soring the rail union and Barristers going on strike over paying more police, doctors/nurses needed meaning we need to spend even more money which we don't have! This can only take generations to pay off if at all.
"They are not going to be selling it off in a panic sometime soon..." Famous last words! Liz Truss is in complete agreement with you. Thats why she now has the nickname... Brains... and is the shortest serving PM to leave office walking out of No10... Doh!
Saying the government can't go bankrupt is not true, unless one look at it in purely theoretical terms (a tendency towards zero and no credit). Currency games can be played to make it so in practical terms as Soros showed as a single trader only a few years ago, and as the UK did to Germany's financial structure in WW2 by printing false notes etc. Monarchs throughout history have used borrowing and speculation to conquer lands with the hope of reaping a high-risk return after forcing them in to financial or physical submission - one is seldom far from the other and arguably one cannot even exist without the other. At present, sadly, the barking mad, hysterical 'bread and circus' US 'democracy' has total control of Ukraine as it is paying the salaries and energy of every man Jack of them (obey or starve/freeze!), but many in the West seem too stupid to work that one out, and the media are too cowardly and/or controlled and/or corrupt to state the truth openly.
I know almost nothing about this subject. But isn't it an issue that the gov spends money it can never repay, thus increasing the national debt with no plans to ever pay if off? I think something drastic needs to happen, like a market reset (crash), this would help make levels like stock market, housing prices reset to what they should be, because atm they are overpriced. But this little issue could turn the financial world upside down. I know im going off topic, but national debt is just one of the things that can lead to a crash because it is devaluing money (inflation).
... I don't know who this guy with the glasses is... but I hope to God he doesn't hold a position of financial responsibility affecting me... Ever increasing National debt, requiring ever increasing gdp, to manage (debt/gdp)... is a Ponzi scheme... Believe it... or weep... if you live long enough...
I wrote this comment 2 years ago. I was concerned about the potential inflation issues, then it happens and every blames Russia war. The world is in a really bad financial situation and is only going to get worse.
Then why does Japan have the largest national "debt" as a percentage of GDP in the world and some of the lowest inflation? Inflation is a supply issue, not a monetary issue. Inflation has fallen dramatically since you made your post. Look at the oil price chart by month for 2023 and the inflation rate by month. Oil price leads inflation rate exactly. @@PhillipPilkingtonPhotographer
@@finchbevdale2069 hey. It may not look like it. Because CZcams round up the nearest year. But I posted this before the inflation issues. But I will look more into what you have mentioned here. Thanks.
So, why do government not just build everything they want to, say bridges, railways or fund the NHS etc.? If this kind of expenditure could be fiat currency? 'Created' from thin air? Why does gov raise the liquidity through bonds, gilts & pay interest when it could just 'create' the money instead? Why do the government not just 'create' the money for these projects and pay it directly to the companies that are doing the building, creating the jobs etc?
*Simple because corporations want to privatize everything. They buy politicians to act like government can't do anything. As Ronald Reagan said "government is not the solution, it is the problem", and his buddy Margaret Thatcher said "there is no public money, just tax payer money". So everything is done to privatize everything. They underfund to weaken it to the point of privatization. Protect your NHS with your life, Americans want that but corporations are now attacking it to prove there point that socialism and government doesn't work. My home state of California has private prisons, security forces, fire fighters, charter schools, on and on and it has become a collapsing society.*
*As for bridges they privatize it to collect the toll fees everytime you cross, when government can do it once and make it free for everyone. As for railways it's a different animal because if it invested in railways it gives people public transportation and also allow for goods to be transported by railway. Which would kill a couple industries car, 18 wheelers, and most important of all oil industry.*
*As for the bonds this is my thought. If you're a big corporation and you own basically everything, and you can't grow no more because of it, what do you do? Simple you "lend" the government money because it creates the money, that's the only place you can grow. So the rich created a UBI for themselves. That's why MMT economist say bonds are a choice not a necessity to fund government. That's why you posted a great question, why does government sell bonds for liquidity.*
Jesus Thank you for the reply, I'm trying to learn all about this stuff and this is useful. Who is responsible for the privatisation in California, is it central government or local?
Is the national debt not an immoral institution as government borrowing is often done instead of raising taxes for things with which the public would not vote for an increase in taxes for? The people pay for this instead with the inflation tax, and of course a guarantee of higher future taxes to now pay off the interest plus principle of the new debt. The only reason this debt is now remotely sustainable is due to interest rates held low by the BOE. Do you see the debt to GDP ratio falling through ‘financial repression’ over the coming years and decades? Or is the debt to gdp ratio not a concern for you either?
@@kevinrudeforth when the Bank of England has to buy most of the debt issuance. Or any for that matter, It’s monetisation of the debt, or to put another way, Money Printing... brrrrrrrr
We've been working from home due to lockdown and illnesses. Some new equipment arriving over the weekend that should end the hiss from Richards voice. He currently only has access to an android phone for filming
Just imagine how the national account would look if Parliament voted for France to repay its war loans that they asked to suspend payments on in 1931. Something like £800.0Bn is owed now.
we repaid Lend-Lease so I'm not sure why our neighbours should not do the same. Indeed, we ceded bases worth billions for US help, France didn't (as far as I know, do correct me if I'm wrong).
@@gurglejug627 Yep. But I’m talking about WWI, which Britain did repay its loans to America (and screwed a profit out of Australia for more than half its GDP too) but declined to make France pay. For whatever reason, successive British governments would rather raise taxes than have France repay its loans. BTW, those bases the Americans have are due to be returned in 2039; bit like Hong Kong really.
3 years down the road and the holders of this debt have taken a massive haircut!! Hilarious. Bet those pension funds wished they got the hell out. Anyone who tries to tell you national debt is not a problem is economically illiterate. Interest rates up at 5% now, this causes a slight problem for payment of the coupon on new debt doesn’t it Mr Murphy?
*It's part of the government. How else could the government create and inject pounds into the economy? The same way you put pounds into your checking account at the bank to then pay an expense.*
@@selfreli7325 The BOE is a seperate entity, if it wants it can refuse to lend to the government. It loans debts to the Treasury, it determines how much can be printed. Its a bank that the Government use but they have no say in what it does. Its not nationalised it makes its own profit which goes to its actual owners.
What a load of crap. You don't mention once the amount of interest we have to pay on this debt. About £80 billion a year currently. (And going up very fast) If we didn't have debt we could be spending that money on schools and NHS. Debt is not good. Pay it off as soon as possible.
How to pay it off is the question. By raising revenue via taxation? Or, by just printing currency (or posting its digital equivalent to the government's own bank account).
b, thats a very concerning statement . Paying it off quickly will require fast money, money we cannot afford without even higher taxation, money that with an average wage of 35 to 27,000 a year before tax is frankly impossible to deal with taxation increase without ruining the lives of many who barely float above the bread line. If you've got an issue with how things are being run, reincarnate into a rich family, study in Oxford, never get a part time job or work during the period and then graduate knowing with 100% confidence you can lead this nation to greener pastures after all those years reading textbooks. Definitely more likely than God suddenly caring for his creations down on Earth.
@@awonderingoneil206 The Treasury could simply create new money in digital form, then use this new debt-free money to purchase all outstanding government securities. New money gets into circulation and the interest payments are gone along with the debt.
The problem is that while the debt grows and interest rates remain high, the average tax payer is funding interest payments to people who can afford to invest in private pension schemes and GILTs. It is redistributing wealth away from public services and into the estates of the well off: the cost of servicing the debt will soon be greater than the amount spent on education.
6:50 UK Debt is not going up because people "want" to save with the UK. I can bet overseas investors will own less and less of the debt percentage with time. Central Banks and Pension Funds ownership is merely a function of perpetuating a flawed system.
Very good presentation, small point re the U.K. national debt from 1694. At that time Scotland had no share of the debt until 1707 and part of the compensation for taking on the English National debt was called “the equivalent “ .
Yes, it couldn’t have been UK national debt in 1694 as the UK didn’t exist. Might have been “Crown" debt as Scotland and England shared a monarch.
The major banks and public traded companies all have massive debts; to their depositors / savers in the case of banks and to their shareholders in the case of publicly traded companies. It is notable that banks 'like' to be indebted to 'you' because you deposit your money with them and similarly large companies 'like' being indebted to shareholders because it means people want to buy (and are buying) their shares / stock and the company's valuation and share price increases. The government talks about debt as if it were teaching 3 year olds to run a toy sweet / candy shop.
Love your channel! Learning loads! 💪
If the Government own the Bank of England and we own the Government, do we then pay interest on our interest that we charge ourselves.
Do we own the bank of England, if so where does its profits go?
Do the pensioners the get an increase for pay offing the National debt interest bonds?
What are the monthly interest rate repayments.
It's rude to ask questions like that, dontchaknow...
The taxpayer is paying the interest on the debt but only the holders of government bonds and private pension owners will receive any of this money. Its a shameful redistribution of tax to the wealthy.
I'm confused how on earth is 2 trillion debt a good thing for us all! With the banking crisis in 2008, Brexit, Covid, and now the war in Ukraine to add to it all the cost of living is soring the rail union and Barristers going on strike over paying more police, doctors/nurses needed meaning we need to spend even more money which we don't have! This can only take generations to pay off if at all.
Why don't people save their own money in a savings account over 30 years instead of give it to a hedge fund? Help me understand.
"They are not going to be selling it off in a panic sometime soon..."
Famous last words!
Liz Truss is in complete agreement with you.
Thats why she now has the nickname... Brains... and is the shortest serving PM to leave office walking out of No10...
Doh!
I own about £100 of it. In a "gilt fund". My pension is public sector so unfunded but I have an ISA.
What are euro swaps and are 300 trillion moving to the EU?
Saying the government can't go bankrupt is not true, unless one look at it in purely theoretical terms (a tendency towards zero and no credit). Currency games can be played to make it so in practical terms as Soros showed as a single trader only a few years ago, and as the UK did to Germany's financial structure in WW2 by printing false notes etc. Monarchs throughout history have used borrowing and speculation to conquer lands with the hope of reaping a high-risk return after forcing them in to financial or physical submission - one is seldom far from the other and arguably one cannot even exist without the other.
At present, sadly, the barking mad, hysterical 'bread and circus' US 'democracy' has total control of Ukraine as it is paying the salaries and energy of every man Jack of them (obey or starve/freeze!), but many in the West seem too stupid to work that one out, and the media are too cowardly and/or controlled and/or corrupt to state the truth openly.
I know almost nothing about this subject. But isn't it an issue that the gov spends money it can never repay, thus increasing the national debt with no plans to ever pay if off? I think something drastic needs to happen, like a market reset (crash), this would help make levels like stock market, housing prices reset to what they should be, because atm they are overpriced. But this little issue could turn the financial world upside down. I know im going off topic, but national debt is just one of the things that can lead to a crash because it is devaluing money (inflation).
repay to whom, itself?
... I don't know who this guy with the glasses is... but I hope to God he doesn't hold a position of financial responsibility affecting me...
Ever increasing National debt, requiring ever increasing gdp, to manage (debt/gdp)... is a Ponzi scheme...
Believe it... or weep... if you live long enough...
I wrote this comment 2 years ago. I was concerned about the potential inflation issues, then it happens and every blames Russia war. The world is in a really bad financial situation and is only going to get worse.
Then why does Japan have the largest national "debt" as a percentage of GDP in the world and some of the lowest inflation? Inflation is a supply issue, not a monetary issue. Inflation has fallen dramatically since you made your post. Look at the oil price chart by month for 2023 and the inflation rate by month. Oil price leads inflation rate exactly. @@PhillipPilkingtonPhotographer
@@finchbevdale2069 hey. It may not look like it. Because CZcams round up the nearest year. But I posted this before the inflation issues. But I will look more into what you have mentioned here. Thanks.
Are you saying a country can’t go bust? Sounds a bit iffy
Western Roman Empire in 476: hold my vinas...
So, why do government not just build everything they want to, say bridges, railways or fund the NHS etc.? If this kind of expenditure could be fiat currency? 'Created' from thin air? Why does gov raise the liquidity through bonds, gilts & pay interest when it could just 'create' the money instead? Why do the government not just 'create' the money for these projects and pay it directly to the companies that are doing the building, creating the jobs etc?
*Simple because corporations want to privatize everything. They buy politicians to act like government can't do anything. As Ronald Reagan said "government is not the solution, it is the problem", and his buddy Margaret Thatcher said "there is no public money, just tax payer money". So everything is done to privatize everything. They underfund to weaken it to the point of privatization. Protect your NHS with your life, Americans want that but corporations are now attacking it to prove there point that socialism and government doesn't work. My home state of California has private prisons, security forces, fire fighters, charter schools, on and on and it has become a collapsing society.*
*As for bridges they privatize it to collect the toll fees everytime you cross, when government can do it once and make it free for everyone. As for railways it's a different animal because if it invested in railways it gives people public transportation and also allow for goods to be transported by railway. Which would kill a couple industries car, 18 wheelers, and most important of all oil industry.*
*As for the bonds this is my thought. If you're a big corporation and you own basically everything, and you can't grow no more because of it, what do you do? Simple you "lend" the government money because it creates the money, that's the only place you can grow. So the rich created a UBI for themselves. That's why MMT economist say bonds are a choice not a necessity to fund government. That's why you posted a great question, why does government sell bonds for liquidity.*
*Sorry for the rant and if it's incoherent, it's really late and I'm tired. But I hope that helps.*
Jesus Thank you for the reply, I'm trying to learn all about this stuff and this is useful. Who is responsible for the privatisation in California, is it central government or local?
Brilliant Richard 👏👏👏
Is the national debt not an immoral institution as government borrowing is often done instead of raising taxes for things with which the public would not vote for an increase in taxes for? The people pay for this instead with the inflation tax, and of course a guarantee of higher future taxes to now pay off the interest plus principle of the new debt. The only reason this debt is now remotely sustainable is due to interest rates held low by the BOE. Do you see the debt to GDP ratio falling through ‘financial repression’ over the coming years and decades? Or is the debt to gdp ratio not a concern for you either?
the government isnt borrowing the money from anyone.. it either creates the money itself or produces bonds which organistations/countries etc buy
@@kevinrudeforth when the Bank of England has to buy most of the debt issuance. Or any for that matter, It’s monetisation of the debt, or to put another way, Money Printing... brrrrrrrr
OMG... he's a Chartered Accountant!
... and he thinks that national debt can continue rising... forever..😱
Excellent video. Rubbish production standards. Please get rid of the hiss!
We've been working from home due to lockdown and illnesses. Some new equipment arriving over the weekend that should end the hiss from Richards voice. He currently only has access to an android phone for filming
You just destroyed your other video on Scottish independence Richard
Just imagine how the national account would look if Parliament voted for France to repay its war loans that they asked to suspend payments on in 1931. Something like £800.0Bn is owed now.
we repaid Lend-Lease so I'm not sure why our neighbours should not do the same. Indeed, we ceded bases worth billions for US help, France didn't (as far as I know, do correct me if I'm wrong).
@@gurglejug627 Yep. But I’m talking about WWI, which Britain did repay its loans to America (and screwed a profit out of Australia for more than half its GDP too) but declined to make France pay. For whatever reason, successive British governments would rather raise taxes than have France repay its loans.
BTW, those bases the Americans have are due to be returned in 2039; bit like Hong Kong really.
@@seanlander9321 how many of the US overseas bases are to be returned in 2039? And to whom?
@@gurglejug627 The Caribbean bases. 99 year leases to America with handover commencing at 98 years. The clock is ticking.
@@seanlander9321 so just Caribbean bases, then? And to whom? The island nation governments?
3 years down the road and the holders of this debt have taken a massive haircut!! Hilarious. Bet those pension funds wished they got the hell out. Anyone who tries to tell you national debt is not a problem is economically illiterate. Interest rates up at 5% now, this causes a slight problem for payment of the coupon on new debt doesn’t it Mr Murphy?
Does the government really own the bank of England????
*It's part of the government. How else could the government create and inject pounds into the economy? The same way you put pounds into your checking account at the bank to then pay an expense.*
@@selfreli7325 The BOE is a seperate entity, if it wants it can refuse to lend to the government. It loans debts to the Treasury, it determines how much can be printed. Its a bank that the Government use but they have no say in what it does. Its not nationalised it makes its own profit which goes to its actual owners.
No
What a load of crap. You don't mention once the amount of interest we have to pay on this debt. About £80 billion a year currently. (And going up very fast) If we didn't have debt we could be spending that money on schools and NHS. Debt is not good. Pay it off as soon as possible.
How to pay it off is the question. By raising revenue via taxation? Or, by just printing currency (or posting its digital equivalent to the government's own bank account).
*Wrong. You obviously don't understand the difference between an user and issuer of currency.*
b, thats a very concerning statement .
Paying it off quickly will require fast money, money we cannot afford without even higher taxation, money that with an average wage of 35 to 27,000 a year before tax is frankly impossible to deal with taxation increase without ruining the lives of many who barely float above the bread line.
If you've got an issue with how things are being run, reincarnate into a rich family, study in Oxford, never get a part time job or work during the period and then graduate knowing with 100% confidence you can lead this nation to greener pastures after all those years reading textbooks.
Definitely more likely than God suddenly caring for his creations down on Earth.
@@awonderingoneil206 The Treasury could simply create new money in digital form, then use this new debt-free money to purchase all outstanding government securities. New money gets into circulation and the interest payments are gone along with the debt.
@@nthperson Is that what the Bank of Japan is doing?
"We need debt" says the man getting paid to say it.
Tory propaganda.. mannn