The Thick of It


Tuesday, March 06, 2012

UK government debt in context

A couple of charts on an A-level tutorial site, Economics Help shows in context the level of UK government debt over time:

This shows that despite the recent increase in government debt after the bailout of the banks, we're at historically low levels.


tommy5d said...

Is a graph that shows less than 90 years really "historical"?

Also, let's remember past debt crises have been to fight wars. Come the end of the war all that war expense disappears and you run a large surplus.

If we were talking about shutting down the NHS or the schools perhaps we'd be in a similar position but we're not; public sector spending will continue to grow until 2017.

Anonymous said...

It's a global economic problem. We have very little control over that. We fared well in the mid 80s, mid 90s, mid 2000s but we were only riding a wave. A monkey could've been Chancellor and your graph would still look the same. The curve is relative and really proves nothing. Would it have been better if we had a Labour government these past few years? God knows. Could it have been worse. Of course
! But all that's irrelevant anyhow.

As the world continues to print money for fun the problem will only get worse...these are fundamental issues with the international financial system. Bailing out the banks in the UK was/is desperate and hopeless but it's inevitable and essential. We have no alternative.

On the positive side, my Mayan friend says it'll all be sorted by the end of the year. :)

Eamonn O'Tierney said...

Your comment is slightly disingenuous; from the graph, the current debt as a proportion of GDP is at its highest level since the mid sixties when the combination of post war economic growth and the reduction of the debt incurred during the Second World War had brought that proportion down.

Britain is currently experiencing very low levels of growth and the recent rise in debt as a proportion of GDP is at its steepest since the 1940s but Britain is not at war. Of course the rapid increase in debt is explained by the global financial collapse in 2008 and the need to protect the economy from the consequences of that collapse, but the British population are unlikely to accept austerity levels similar to the post war period nor is the economy likely to grow at rates equal to those during the post war boom in the foreseeable future.

The countries of the Eurozone are having severe difficulties re-financing their debt even though some of them have a proportion of debt to GDP that is similar to that of Britain and, in a global financial market Britain is not seen as such a safe country to which to lend by internal investors or foreign sovereign funds as it was during and after the Second World War.