Thursday, 20 August 2009

Government debt

The latest PSBR (Public Sector Borrowing Requirement) figures are out and they are terrible. The figure for July, normally a bumper month for tax receipts from companies, is the first deficit for 13 years and the largest for 16 years. Last July the public sector finances posted a surplus of £5.2bn. Tax revenues are down 30% on last year, Income tax and VAT income for July were both down about 15% compared to July last year. Meanwhile public sector spending, including unemployment payments, was up 10.4% on last year. Do you see the problem?

The government's overall debt now stands at £801bn, that's around 56.8% of GDP. To put that in context, it's at its highest level since 1974. What is about Labour government's? They just can't help but screw up the economy and leave it to a Conservative government to take the unpopular decisions to try and start a recovery. More to the point, why do the British electorate keep falling for the lies of smart dressed or "economic geniuses" who stand as Labour?

The UK economy is on the verge of collapse, we stand on the edge of an economic precipice of national reduced credit worthiness and hyper-inflation. Not that you would know it from the words and actions of Gordon Brown, Peter Mandelson and Alistair Darling.

In April's budget, the Chancellor, Alistair Darling, forecast that borrowing this year would reach £175bn.

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