New Paper: British Government Liabilities Now Total Estimated £1.8 trillion, On Top of National Debt - Polidicks

Press Release: [url]http://www.adamsmith.org/news/uk-plc-britains-debt-time-bomb[/url] Paper: [url]http://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/5714b7a9ab48dea645aadd7c/1460975541581/Nigel+Hawkins+-+UK+PLC+final.pdf[/url] Secondary Source: [url]http://www.cityam.com/239110/successive-governments-accused-of-being-wildly-reckless-as-report-finds-public-sector-pensions-and-unpaid-student-loans-add-up-to-create-185-trillion-liabilities-timebomb[/url] [QUOTE]The government’s total liabilities, better understood as debts waiting to happen, are even larger than its mammoth public debt at £1.85 trillion, according to a new investigative paper from the Adam Smith Institute. The report exposes the true state of affairs which consecutive Chancellors, including George Osborne, have struggled to keep out of the public eye for years. By exploiting jargon and downplaying its own reports to the public, the government has consistently disguised the true size of the monolithic debt the UK’s young must pay, [B]with the total cost standing at a staggering £3.45 trillion, more than double the national debt figure that George Osborne usually cites. The total cost of these liabilities, on top of the national debt, to every man, woman and child in the UK is a massive £53,822 each. [/B] The paper, which critically analyses the Whole of Government Accounts published by the government, applies best practice auditing standards to the government’s own assets and liabilities, concluding that [B]the majority of UK national liability is made up of £1.3 trillion in public sector pensions[/B]. These public pensions will severely impair the financial prospects of future generations and are yet to be addressed in any meaningful way by the current government despite their proclamations of being in a time of austerity. An eye-wateringly high [B]93% of public sector pensions are currently unfunded, meaning that the government is yet to put any money aside to pay for them[/B], choosing instead to bury their head in the sand safe in the knowledge that they’ll not be in office when it’s time to cough up the cash. In order to deliver on its public sector pensions promises the government will have to raise £1.3 trillion through increased taxation and further cuts to public spending, on top of the cuts already being made to tackle the more widely publicised £1.6 trillion public debt. [B]Student loans also come under fire in the report as recent figures from the Department of Business Innovation and Skills indicate an expected write-off ratio of up to 45%[/B]. In effect it would mean that almost half of those in higher education to whom loans were extended actually received large grants irrespective of their means. The taxpayer is ostensibly fully funding increasing numbers of meaningless degrees for financially capable students whilst having their own welfare cut.[/QUOTE]

Just leave it a problem for the next government, then blame them when shit goes down.

Okay sooo... you guys cannot leave the EU. If what I'm reading is true, economically your country will collapse without outside help. Everyone has National Debt; it's the Government Liabilities I'm worried about. That means more fuel to the Fire in a Global recession.

Huh, is this a lesson about not underfunding everything

[QUOTE=mdeceiver79;50154997]Just leave it a problem for the next government, then blame them when shit goes down.[/QUOTE] [IMG]https://upload.wikimedia.org/wikipedia/commons/8/8b/UK_GDP.png[/IMG] The problem isn't that we have the highest debt ever, or something. The problem is that we got lucky the last few times by being able to grow out of the high debt due to two of the longest booms in history (the industrial revolution and the long boom) whilst not having to cut back. I don't see an obvious boom in sight. No government in the UK is actually prepared to deal with the issues of liabilities in particular. Labour aren't equipped because they are ideologically opposed to cutting welfare (or, in this case, future welfare). The Conservatives aren't equipped because their own voter base are the people who benefit from over generous pensions. And, of course, everyone under forty or so will be the people paying for it.

[QUOTE=mdeceiver79;50154997]Just leave it a problem for the next government, then blame them when shit goes down.[/QUOTE] It worked for Abbott after Howard left a trainwreck for Rudd/Gillard/Rudd and then to top it off we got hit by the financial crisis in that interim.

[QUOTE=OmniConsUme;50155012]Okay sooo... you guys cannot leave the EU. If what I'm reading is true, economically your country will collapse without outside help. Everyone has National Debt; it's the Government Liabilities I'm worried about. That means more fuel to the Fire in a Global recession.[/QUOTE] Depends whether you mean short term or long term. The truth is that nobody really knows the true long term effects of leaving the EU. My view is that they will be close to nil if we stay in the [URL="https://en.wikipedia.org/wiki/European_Economic_Area"]EEA[/URL], as this will mean there is effectively little to no change in how trade is conducted (or negotiate some kind of associate membership, as has been suggested, though this is much more speculative), but the short term effects will be large due to market panic. Though I'm going to be about a month too young to vote in the referendum.

there's only so long you can blame labour for [editline]18th April 2016[/editline] [QUOTE=FlashMarsh;50155032]Depends whether you mean short term or long term. The truth is that nobody really knows the true long term effects of leaving the EU. My view is that they will be close to nil if we stay in the [URL="https://en.wikipedia.org/wiki/European_Economic_Area"]EEA[/URL], as this will mean there is effectively little to no change in how trade is conducted (or negotiate some kind of associate membership, as has been suggested, though this is much more speculative), but the short term effects will be large due to market panic. Though I'm going to be about a month too young to vote in the referendum.[/QUOTE] i'd think europe will give us the vicky and say "if you're so fucking big and clever, you don't need our trade" and watch us crumble until we beg to get back in

[QUOTE=codenamecueball;50155033]there's only so long you can blame labour for[/QUOTE] Yes, this has been a long term issue. We have only run a small budget surplus, despite years of boom, for four years under Labour and one(?) year under the Conservatives in the years since Thatcher. The idea is that surpluses and deficits add up over time. Neither party has had the discipline to do so despite extremely good economic times from around 1993 to 2008. [editline]18th April 2016[/editline] [QUOTE=codenamecueball;50155033]there's only so long you can blame labour for [editline]18th April 2016[/editline] i'd think europe will give us the vicky and say "if you're so fucking big and clever, you don't need our trade" and watch us crumble until we beg to get back in[/QUOTE] Europe needs the trade as much as we do. Of course, countries have a remarkable ability to inflict self-harm, but I doubt that Germany would be happy seeing its exports to us decline by being tricky.

I'm definitely on the left side of politics, but I'm only conservative for the financial policy. David Cameron may be a twat, but spending needs to go down. This is coming from somebody who's livelihood comes from parents who both hold jobs in public sectors which are being cut.

[QUOTE=KillerLUA;50155423]I'm definitely on the left side of politics, but I'm only conservative for the financial policy. David Cameron may be a twat, but spending needs to go down. This is coming from somebody who's livelihood comes from parents who both hold jobs in public sectors which are being cut.[/QUOTE] I think most people on the left also believe in some degree of sound finance, though in a less orthodox way than those on the right, looking to balance deficits with surpluses rather than constant balanced budgets. However, both sides have far too much tolerance for accepting politicians who run constant deficits, even in booms, especially when they personally benefit from this. This means that politicians are never punished for this kind of behaviour.

[QUOTE=FlashMarsh;50155560]I think most people on the left also believe in some degree of sound finance, though in a less orthodox way than those on the right, looking to balance deficits with surpluses rather than constant balanced budgets. However, both sides have far too much tolerance for accepting politicians who run constant deficits, even in booms, especially when they personally benefit from this. This means that politicians are never punished for this kind of behaviour.[/QUOTE] McDonnell's argument for a day to day budget surplus makes sense: use borrowing to cover infrastructure projects which pay for themselves in the long run while paying for every day things using the governments tax income. If the government collected it's taxes properly [url=http://www.theguardian.com/money/2011/dec/06/hmrc-tax-deal-vodafone](rather than letting companies negotiate their taxes with hmrc)[/url], and hadn't ring fenced so much spending that it is impossible to not utterly screw over what is left, we could be sound.

[QUOTE=NeonpieDFTBA;50155617]McDonnell's argument for a day to day budget surplus makes sense: use borrowing to cover infrastructure projects which pay for themselves in the long run while paying for every day things using the governments tax income. If the government collected it's taxes properly [url=http://www.theguardian.com/money/2011/dec/06/hmrc-tax-deal-vodafone](rather than letting companies negotiate their taxes with hmrc)[/url], and hadn't ring fenced so much spending that it is impossible to not utterly screw over what is left, we could be sound.[/QUOTE] That's never what happens though. For decades governments have postponed spending cuts and kicked the debt bomb along the road. I think you would have to be profoundly naive to actually believe that a left-wing Labour government would ever save in a boom instead of buying up more votes with over generous spending. Of course, the Conservative Party does so too, but at least it seems a little more serious about achieving balanced budgets. Their problem is that they have cut almost everything that they haven't ringfenced, leaving either very efficient forms of welfare (like tax credits) or essential safety-nets (like disability benefit) to be hit instead of wastes of money like non-means tested pensioner benefits (like winter fuel allowance) and extremely ineffective foreign aid spending. Additionally, corporation tax is almost the worst tax there is. It is almost entirely passed on to consumers in the form of extra costs, has very high incentives to dodge, faces extreme competition from low tax countries (and no, not just tax havens), doesn't raise very much money and costs a lot to monitor and prevent dodging. Anyone serious about balancing budgets with taxation would look at income tax or VAT to make up the difference, however bashing corporations is popular at the moment (often justifiably), so it is easy to promise and be popular from raising that ineffective tax over others.

[QUOTE=FlashMarsh;50155686]That's never what happens though. For decades governments have postponed spending cuts and kicked the debt bomb along the road. I think you would have to be profoundly naive to actually believe that a left-wing Labour government would ever save in a boom instead of buying up more votes with over generous spending. Of course, the Conservative Party does so too, but at least it seems a little more serious about achieving balanced budgets. Their problem is that they have cut almost everything that they haven't ringfenced, leaving either very efficient forms of welfare (like tax credits) or essential safety-nets (like disability benefit) to be hit instead of wastes of money like non-means tested pensioner benefits (like winter fuel allowance) and extremely ineffective foreign aid spending. Additionally, corporation tax is almost the worst tax there is. It is almost entirely passed on to consumers in the form of extra costs, has very high incentives to dodge, faces extreme competition from low tax countries (and no, not just tax havens), doesn't raise very much money and costs a lot to monitor and prevent dodging. Anyone serious about balancing budgets with taxation would look at income tax or VAT to make up the difference, however bashing corporations is popular at the moment (often justifiably), so it is easy to promise and be popular from raising that ineffective tax over others.[/QUOTE] If there are more efficient ways to tax people and companies, I'm all ears, but as the rules say that Vodafone should pay x amount then they shouldn't be able to cut a deal with hmrc to pay a fraction of it. I also agree that labour wouldn't fix the deficit but the conservatives tend to use cuts to cut taxes and have failed to meet every target they have promised to meet.

Your guy's conservative government is so shitty. It constantly cuts welfare and other social policies such as the NHS while simultaneously reducing taxes. It's no wonder that there's a good size amount of debt in the UK.

[QUOTE=FlashMarsh;50155045]Yes, this has been a long term issue. We have only run a small budget surplus, despite years of boom, for four years under Labour and one(?) year under the Conservatives in the years since Thatcher. The idea is that surpluses and deficits add up over time. Neither party has had the discipline to do so despite extremely good economic times from around 1993 to 2008. [editline]18th April 2016[/editline] Europe needs the trade as much as we do. Of course, countries have a remarkable ability to inflict self-harm, but I doubt that Germany would be happy seeing its exports to us decline by being tricky.[/QUOTE] Europe would need free trade with the UK as much as the UK does with Europe if the UK was as big as Europe.

The governments are forgetting to save in the good times and spend in the bad. All this constant balance stuff that doesn't actually make a lot of sense. Cutting back in the bad, just makes it worse.

[QUOTE=Boilrig;50159049]The governments are forgetting to save in the good times and spend in the bad. All this constant balance stuff that doesn't actually make a lot of sense. Cutting back in the bad, just makes it worse.[/QUOTE] Pretty much any modern country operates on deficit. As flashmarsh said before debt isn't bad but too much debt compared to your GDP is a bad thing. The problem is that spending money makes you look good (woo government investing in stuff and well funded police/schools/hospitals) and saving money doesn't make you look good (who benefits from austerity? aside from private companies buying public assets at a discount, nobody).

[QUOTE=Bradyns;50155029]It worked for Abbott after Howard left a trainwreck for Rudd/Gillard/Rudd and then to top it off we got hit by the financial crisis in that interim.[/QUOTE] Look, I hate bushy eyebrows man as much as the next bloke, but no one can deny he crushed Australian debt. It was Rudd that fucked it up. Labor has a habit of spending exorbitant amounts of money. [img]http://i.imgur.com/0iEDADV.png[/img]

[QUOTE=download;50159575]Look, I hate bushy eyebrows man as much as the next bloke, but no one can deny he crushed Australian debt. It was Rudd that fucked it up. Labor has a habit of spending exorbitant amounts of money. [img]http://i.imgur.com/0iEDADV.png[/img][/QUOTE] Howard might have been disliked but he was very effective. Especially with the government's budgets and stopping gun violence. I wouldn't be too harsh on Rudd and Swanny though. That spending meant we never had a period of recession, while the rest of the developed world (except Poland iirc) did enter recession.