( A five to six-minute snapshot read of the Health of the UK)
Britain is teetering on bankruptcy with its national debt at 530% of GDP.
Leaving aside the question as to what sort of Britain will exist on leaving the European Union, the uncomfortable moral question naturally arises:
At what point does the debt become so large that unborn will be born into a new form of slavery, entering the world shackled by the debts of their forbears.
The official debt is merely the tip of a very large hidden iceberg. A slights hike in interest rates will see the UK unable to repay its government borrowings.
The Government’s true debt is the present value of all the commitments it has entered into, on the expectation that these commitments will be paid for by future taxpayers.
Here are some prominent examples are: The commitments implied by the public sector pension system, the state pension system, the health system and PFI. The costs of these commitments are staggering.
With an average income of about £22,000 per person the future tax bill will range between approximately £73,000 and almost £117,000 for each man, woman and child in the country.
One recent estimate suggested that a UK citizen born in 2011 will inherit, on birth, a debt of perhaps £200,000, and it could easily be much more.
It is simply inconceivable that debts on this scale will be paid off in full.
Not to mention; Deflecting the Reality of a Broken State.
The Bank of England pump £5bn into firms and £20bn into banks to keep interest rates down.
Replacing Trident – £31bn-£34bn (depending how you believe.)
Hinkley Point is a giant undertaking. Its two 1.65GW European pressurised reactors (EPR) would be among the biggest in the world. Estimated cost£16bn.
HS2 ‘abysmal value for money’ at 10 times the cost of high-speed rail in Europe : Current £42.6bn budget.
The cost of Imports with the weakness of the pound is set to go through the roof. As well as having a prolonged period of market chaos Britain’s political makeup is at a breaking point.
Petroleum products made up 27% of our fuel imports in 2015
Natural gas made up around 29% of the UK’s fuel imports in 2015
It looks as if Britain will be battling to keep itself together, let alone remove itself from the EU and the wave of political fallout could cause huge ramification across the union, the continent, and later the globe.
The political chaos does not stop with Britain.
The contagion the EU faces from the British vote for a Brexit could rip apart the 28-nation bloc,” the real political threat came from “referendum contagion” spreading further across Europe, handing more power to extreme-right, nationalist, and Eurosceptic parties.
So what follows?
Business as usual for UK economy – but where will it go in 2017?
No one knows.
The UK is still running a quarterly balance of payments deficit of 5% of gross domestic product. Still passing the buck from one generation to the next, until the whole rotten system inevitably collapses under its accumulated weight, seems inevitable.
On leaving the Eu it is not inconceivable that what ever government exists it will renege big-time on many commitments, breaking the health, pensions and other promises on a huge scale.
The social and economic consequences don’t bear thinking about.
And of course there is the very real danger that even draconian measures will not be enough: That the government will lose all control of its finances and end up printing money to pay off its debts, so leading to hyperinflation and economic collapse.
Resulting in an enormous transfers of wealth taking place from the sheep to the wolves. There will be more uncertainty, more political, economic, and legal upheaval, and therefore more financial devastation.
The National Health Service (NHS) already needs billions. The fact that it is tax funded—is also the source of a vulnerability: its exposure to periodic political shocks will result in creeping privatisation.
The British welfare state will be consigned to history.
The need for 250,000 new affordable homes each year to keep pace with present demand will not be achievable.
Shouldn’t the UK fear going the way of Greece – losing control of the public finances – and then, after a delay, being savagely punished by the markets?
Yes it should.
Of course unlike Greece if the UK were in a tight corner it could simply print the funds required to avoid outright default.
Britain, then, is not “broke” – in any historical terms, it is ludicrous to claim that.
As for Britain not being able to afford to invest, the truth is the exact opposite: with the cost of borrowing at historic lows, Britain cannot afford not to invest, but the question is in what, and where.
Aligning itself with the USA and Trumpism seems a poor choice.
Once it activate Articular 50 there will be no bail out from the EU.
All comments appreciated all like clicks chucked in the bin)