Beyond the Election
With the General Election only days away, Philip Wren writes concerning the issue of Britain's national debt and the scale of the problem that the new government – in whatever form it takes – will be faced with.
by Philip Wren
THROUGHOUT the election campaign I have the feeling that the whole thing is being conducted like a phoney war. The spokesmen of the three main parties spend their time dodging the issues.
With the current levels of government borrowing, interest payments on Government debt are projected to rise to £58 billion per year by 2014. In context this is more than the entire schools budget.
In April 2009 the Institute of Fiscal Studies predicted that it would take 25 years to bring government debt under control and require an additional tax contribution of £2,800.00 per year from every household. None of the parties are prepared to face the electorate with the tax rises and cuts that must take place whoever is in power.
Behind the government debt crisis there is a much bigger debt problem. The levels of private debt in Britain are staggering.
The following figures are for the national debt when both public and private debt is added together. According to the CIA World Fact Book, in June 2009 the USA had accumulated $13,450 billion in external debt. That is debt owed to non residents.
The UK was number two on the list of debtor nations with external debts of $9,088 billion. However the US has a GDP (gross domestic product which is the value of goods and services produced) of $14,260 billion. The UK GDP is only $2,149 billion.
Our national debt problem, at 400% of GDP, is four times greater than that of the US and stands at $150,673 per person.
Our nation’s debt is due to living beyond our means for far too long. The banking crisis, its self sparked by excessive debt, has only exasperated an existing problem.
The incoming government, of whatever party, faces a no win situation. If it raises taxes or cuts spending, either way it will snuff out the artificial recovery based on continued public spending. But the financial markets will not tolerate for long, continued borrowing at the present levels. The more gloomy pundits consider that this election is only about who presides over the UK’s pending insolvency.
For many years a few voices have been raised to warn that our continuing rejection of God will inevitably bring judgement. There has been no repentance, no revival and most churches have not taken the warnings seriously. Judgement is fast approaching. As it becomes more difficult to borrow, our government will desperately try to shore up the national finances.
In hock to Middle-Eastern monies
It will turn to the Middle East, one of the few cash rich areas of the world and one which has already been a major source of loans. The loans will come because Islam has long seen the strategic importance of winning this nation. With the loans there will be conditions.
The last decade has seen a dramatic erosion of Christian values and influence in this country. I believe the next 5 years will see a rapid increase in Islamic influence. We are already dependant on the Middle East for our oil we now face the prospect of increasing dependence for our finance. In January 2009 Barclays Bank teetered on the brink of a full Middle East take over. Possibly just a foretaste of what is to come.
Philip Wren writes for Sword Magazine and produces a Trumpet Sounds newsletter which is available on his web site.
A billion is a difficult number to comprehend, but (or so it is suggested) one advertising agency did a good job of putting that figure into some perspective in one of it's releases.
- A billion seconds ago it was 1959
- A billion minutes ago Jesus was alive
- A billion hours ago was before the Stone Age
- A billion Pounds ago was only 13 hours and 12 minutes, at the rate our government is spending it
Philip Wren, 04/05/2010