Bailing out banks can be very costly. Suddenly Britain has a public debt ratio comparable to Japan's, but without the trade surpluses and high savings rate.
The government's rescue of some of Britain's biggest banks will more than double the national debt at a stroke after government statisticians decided to classify Lloyds and Royal Bank of Scotland as public corporations. Their liabilities – up to £1.5tn – will be added to the taxpayer's balance sheet.That could push the country's debt levels up to 150% of national income, from a three-decade high of 48% now. The public sector net debt has already been swollen by £90bn of Northern Rock liabilities and, as of yesterday, £50bn of Bradford & Bingley's liabilities. But the two latest additions, which the ONS estimates could total between £1tn and £1.5tn, would dwarf those.
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Shadow chief secretary to the Treasury, Philip Hammond, said: "This is just the beginning of Gordon Brown's debt crisis. Even on his own figures our national debt is set to double to more than one trillion pounds. This is the true legacy of the government's economic failures, and our children will be paying it off for a generation.""Once the liabilities of the bailed out banks are included, our true national debt is now significantly larger than our national income, adding to the risks facing the economy and the burden on future generations."
What is the U.S. debt ratio?
I think it's at 85% but I haven't looked at the latest.
This is incredible and shows the incredible destruction corporations can have when they run governments and get their special interest agendas into law.
Think about it. These banks running amok with their Ponzi scheme based on fictional wealth in real estate, creating of a $65 trillion dollar fictional money trading floor (derivatives, CDOs, CDSes) looks to be collapsing the global economy. Unreal and so is the complete lack of analysis on systemic risk as well as contagion.
In engineering, if someone designed a system where one part failed it brought the entire system down...well, they would at minimum be out of a job.
Can you imagine even a car for example, where the transmission goes so the engine blows up and catches on fire?
Had a car like that once
Though it was the clutch plate and the fuel line more than the transmission and engine. One heck of a lot of smoke and flame one day when I drove it too hard- and suddenly NO power to the wheels.
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Maximum jobs, not maximum profits.
According to CIA factbook
It sounds like an understatement to me, but then can you believe any official numbers anymore?
On an unrelated note, your comparison to a car reminded me of something:
If the car industry was run like the computer software industry was run, cars would get 500 miles to the gallon, cost $50 to buy new, and once a year would blow up and kill everyone inside it.
The CBO has released some new reports
most worthy of a blog post on the U.S. deficit, projected debt. There are now a lot of financial analysts asking about the U.S. debt and just this morning on CNBC I caught some sort of story about the Forex wiping out foreign profits by US Multinationals due to the currency exchange rate.
(which is another major post, let's talk about how MNCs play games with exchange rates, tax cuts and labor costs around the globe)
If a U.S. car was made like software it would breakdown every Tuesday and require an 8 hour upload. Periodically a major epidemic would happen with cars and hundreds of thousands would get sick. Zombie cars would also come about, trying to run over anything it their path as well as each other. If Microsoft designed cars we would have the United States Demolition Derby....
of course Microsoft would advertise the next newest model for just a few thousands more would not have these problems...but only after service pack 14.