Never was so much owed by so many for so little

July 14, 2011 10 Comments
By
Click for linky

The Treasury will publish full accounts for all Whitehall departments to give taxpayers an idea of what the public finances would look like if it was a company.
The move will for the first time bring into one place the future liabilities of accrued pension liabilities for public sector workers and the future costs of schools and hospitals built using the private finance initiative.

Not before time. All this off book stuff has been hiding the true cost of the profligacy of recent British governments (including the current one) for way too long.

Experts suggest that this will add an estimated £1,200billion from debt in the accounts of 1,500 public bodies to the Government’s books.
Adding in the official national debt figure of £909billion, it takes the overall total debt bill to more than £2,000 billion, as at the end of 2009/10.

And that’s not the highest estimate I’ve ever heard. I’m sure the old Burning Our Money blog gave higher estimates of the real debt now and then, but let’s assume that £2,000 billion, or two trillion if you prefer, covers it all. How much is that in meaningful terms?

Well, this sort of thing has been done before of course, but since that picture has a bit of cash in it I thought it’d be interesting in a random kind of way to start from there. In it I can see a couple of tenners, a couple of twenties and 22 £1 coins. If you were to throw away that £82 and follow it up by throwing away another £82 a minute later and so on and so on then in 24 hours you’d have thrown away just over a hundred grand – £118,080 to be precise – and if you kept it up for a year you’d have chucked just over £43 million. But if you started a little while ago, actually just over two thousand years ago at midnight on New Year’s Day, year Zero AD, then by now you’d have thrown away only – hah, only – £86 billion and some change. Change in this case meaning £730,232,238. Clearly a long way to go to equal the UK’s debt by chucking away money at that same rate of £82 per minute – and let’s be honest if we saw someone chucking away eighty quid every sixty seconds we’d think he was an idiot. Starting from 0AD again, from today you’d have to keep going for another 44,373 years. Worse still, you wouldn’t finish until halfway through October.

Now that’s a very simple calculation and doesn’t allow for such things as meal breaks, sleep, days off, sick leave, holiday time and dropping dead with well over 460 centuries to go, so you might be thinking of sharing the workload a bit. If you enlisted the help of ninety nine other people and covered for each other to allow for breaks and a bit of sex – probably quite good sex if you’ve ever fancied doing it on a huge pile of money – to breed replacement money wasters you could get it done in just a few generations. But of course there’s an even faster way to do it which involves almost no effort at all.

Give the job to a government.

Tags: , , , ,

10 Responses to Never was so much owed by so many for so little

  1. July 14, 2011 at 3:11 pm

    So so easy to throw away someone else’s money, so so easy to see yourself as the custodian and distributor of it, particularly with this mindset:

    link to jessescrossroadscafe.blogspot.com

  2. July 14, 2011 at 5:46 pm

    Staying with the Churchill theme all I can say is “We will fight them bitches!”

  3. ivan
    July 14, 2011 at 8:24 pm

    Strange figures used by accountants. For me the headline figure is two billion (2 x 10^12) yet they say they are adding one thousand two hundred billion to just take it over two billion. Or is this some strange american accounting numbers used to try and make things sound larger than they are because it is not scientific numbering.

    • July 15, 2011 at 2:18 am

      Semantics, I guess. Depends whether you want a new -illion word for each multiple of either a thousand or a million. You run out of names much later with the long format but the numbers are still so mind bogglingly huge it’s hard to get a grip on them anyway, hence the need for the kind of thing I’ve done here. As for the advantages of short form over long, personally I find it easier to think of, say, my monthly internet allowance as being 50GB drives than 50,000 megabytes. The kilo, mega, giga, tera etc. series is in wide enough use, especially when living in a metric using nation (though I’d have used it naturally in the UK too), that I’m comfortable with it. Another advantage might be in matters of national debt – when we get to talking of quadrillions the word alone may (I hope) cause real alarm and demand for some sanity in public spending, perhaps more so than saying 1,000 billion.

      • ArtCo
        July 15, 2011 at 3:22 pm

        How about ‘brownillion’ not an actual figure but one when reached means you are f*cked

  4. July 14, 2011 at 8:58 pm

    With that level of public debt now out in the open, what does that do to our %age of GDP figures, and will it mean that we now face the possibility of being downgraded to junk status..

    • July 15, 2011 at 2:24 am

      I suppose it would mean not being leant on to borrow money in order to give it to the EU to be loaned to countries whose ratings are already junk. It might also mean that iDave is actually planning to make some actual cuts and feels the only way to achieve it is to be brutally honest about the true level of debt, though why he didn’t take that approach a year ago is anyone’s guess.

    • July 15, 2011 at 5:30 am

      We already are at junk status, it’s just that no-ones made it official yet…

  5. Rossa
    July 15, 2011 at 1:48 pm

    The national debt does include all mortgages i.e. total outstanding and DOES NOT include future earnings (taxes and private income)to pay off these liabilities.

    If I sat down and calculated how much I had to pay for my mortgage and bills for the next 20 years or more without having any corresponding figure for income then I too would have a big black hole in my accounts.

    Makes for a good headline though.

    • July 15, 2011 at 9:33 pm

      This is being reported elsewhere, The Indy for example, as being the “total public debt”. I’m not an economist and stand to be corrected on this but I understood that term to mean what the government owes, which would not include private debts such as mortgages. That seems reasonable since I’ve seen estimates of all the debt, public sector and private, which come to far more than £2 trillion.

      Of course if you’re talking about mortgages the government has effectively picked up when bailing various banks out of the crapper then you’ve got a point. The government is probably not on the hook for all of that and potentially all those mortgages could be paid in full over time, though since a large part of what got those banks into trouble in the first place was people having mortgages they really couldn’t repay it seems likely that a fair chunk is still heading its way.

United Kingdom Time

Subscribe

Email us at contact orphans of liberty [all one word] at gmail dot com

Authors

For more about these renegades, click on the name to go to a short profile:

AK Haart
Churchmouse
James Higham
JuliaM
The Quiet Man

Orphans logo


Feel free to take this for your sidebar.