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[aaronjb]

You best call me a cynic, then

All right then, ya wee cynic ye.

  There's nothing wee about me, I'll have you know! 

[bigegg]

Can someone answer me these questions - who do we owe the deficit to and why do we need to pay it?

We owe the deficit, in a large part, because we buy more stuff from abroad than we sell.
In order to pay for that, the government sell "bonds" (gilts technically), which are a promise to pay a set rate of interest per year + all the money back at a certain date in the future.
These bonds are sold to foreign investors, mainly, in their currency so we get actual chinese yuan, or japanese yen, or US$ in return for them.
These are then used to pay for our imports.

Our deficit is thus how much the government owes, in bonds, to these individual investors.

The problem comes when .gov decides to issue more bonds to pay the interest, because we don't sell enough stuff abroad, or the economy doesn;t increase enough to cover the payments

DC is very fond of comparing it to household budgets where you're spending more than you're bringing in or the easy credit card comparison....except....hang on, can't we literally just print money? what household can do that? and the banks do it every single day literally create money (or, debt as it should be called) so how come the value of the pound doesn't drastically collapse?

Technically, .gov and the BofE don't print money, they print currency.
And the reason it hasn't collapsed (yet), is because people believe in it - tinkerbell economics.
As soon as people start thinking "hold on - this fiver's worth bugger all, cos the government keep printing more and more", then we'll end up with a situation such as 1930's germany where the german bank (reichBank?) printed so much money it became worthless.
There is a story that a woman took a wheelbarrow full of reischmarks(?) to the shop to buy a loaf of bread.
Someone stole her wheelbarrow, and left the money behind.
And that was a 1st world country - and in living memory!

and if thats the case why are we even bothering to make horrendous cuts, tighten our belts "we're all in this together" bs when its all a big illusion? 

Because if we don't make the cuts, and .gov decides to carry on trying to print it's way out of trouble, people will stop buying our treasury bonds, and then we WILL be in the doo-doo, cos then all the foreign-owned companies will pull out of the UK, and the economy will collapse back to third-world agricultural.
It nearly happened in the 1930s USA during the great depression. Again, a 1st world country, again within living memory.

i think we're in danger of swallowing a big fat lie here 

Yep. But it's a lie we've been swallowing since the major currencies of the world were taken off the gold standard in 1971 and allowed to create as much as they liked, unchecked.

[o-meg-a]

any way, I'm sure the government are doing the best they can for us, given the circumstances.

  :-/

Thats optimistic!  :-/
I'm not sure that there are many high ranking politicians out there with the people's interests truly at heart.
And it doesnt help when there is a world between an Eton school boy and a working-class man. How can he really have perspective on the daily life of the underprivileged and down-trodden?

[bigegg]

any way, I'm sure the government are doing the best they can for us, given the circumstances.

  :-/

Thats optimistic!  :-/
I'm not sure that there are many high ranking politicians out there with the people's interests truly at heart.
And it doesnt help when there is a world between an Eton school boy and a working-class man. How can he really have perspective on the daily life of the underprivileged and down-trodden?

You mis-spelt "sarcastic"   
 

And frankly, the "underpriveleged and down-trodden" are half the problem.
bluddy spongeing skivers

I think this economic problem might be better solved by someone who doesn't actually care about the downtrodden masses.
Because make no bones about it - unless it *is* solved, we'll ALL be underpriveleged and downtrodden.
And even the uber-riche aren't going to like that

[Dishevelled Den]

I think this economic problem might be better solved by someone who doesn't actually care about the downtrodden masses.

Because make no bones about it - unless it *is* solved, we'll ALL be underpriveleged and downtrodden.
And even the uber-riche aren't going to like that

That's an important point Egg.

Leaving aside the looming energy crisis/unravelling security - political situation in the near-mid East and the international consequences should the dollar cease being the world's reserve currency, we here in this neck of the woods have our own serious financial problems to deal with.

The sooner the better in my view as to try and engineer a stabilisation over the longer term is simply putting off the inevitable without any guarantee of success in a world where the status quo will, quite possibly, no longer exist.

[TheBoy]

Can someone answer me these questions - who do we owe the deficit to and why do we need to pay it?

DC is very fond of comparing it to household budgets where you're spending more than you're bringing in or the easy credit card comparison....except....hang on, can't we literally just print money? what household can do that? and the banks do it every single day literally create money (or, debt as it should be called) so how come the value of the pound doesn't drastically collapse? and if thats the case why are we even bothering to make horrendous cuts, tighten our belts "we're all in this together" bs when its all a big illusion? 

i think we're in danger of swallowing a big fat lie here 

'Printing more money', as suggested, or Quantative Easing in the new wankword bingo speak effectively just weakens out currency.

The country has a (perceived) value, just like any other listed business. You can print as many tenners as you like, the value of all those will remain the same, in effect, the tenner is no longer worth a tenner.


Like a listed business, profit from output (GDP) ratio'd to the input (profit) is what affects the value.


New Labour's really stupid, short sighted, daft, moronic, pathetic, useless idea of trying to drive growth purely through increasing costs is clearly a non-starter - it helps get us into the mess we are now in.

Partial Communism will never work in a global market. Total Communism could, potentially, work in a closed market, though I can't think of any true Communistic country in modern history - and I suspect Orwell would be right anyway.