13 January 2009

How to be a pedant

You know that Tory baby who owes £17,000. I would suggest that the Tories are over-egging the pudding.

If you assume that the UK population amounts to 60 million souls, then the overall UK capital debt would amount to £1.020 trillion (£17,000 x 60 million).

But according to the National Statistics Office, the most recent figure for net overall UK debt amounts to only £563 billion (as at September 2008) or rather less than £10,000 per head. To be fair, this excludes the recent interventions in the financial services industry but these are likely to be repaid (possibly with a profit) before Tory baby gets much older.

Furthermore, as public debt is less than 50% of annual GDP, perhaps the position is not so disastrous. If your mortgage debt (plus what you're carrying on your credit card) was less than half your annual income, you wouldn't regard it as a problem, would you? Especially at today's rates of interest.


Anonymous said...
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Anonymous said...

You make some fair points, but your analogy between GDP and personal income is flawed. GDP is more like the turnover of a business than the net profit.