Yet another dinner party discussion which led us into dissecting our current worldwide situation..
Now.. as has been written here before.. figures which describe our National Debt.. are far and beyond comprehension.. Financial experts toss about sums which the man on the street cannot possibly imagine, and thus, in incomprehension, a certain comfort is associated with 'trillions' of Pounds Sterling.. of American dollars..
The latest reports have the UK public sector net debt in July 2011 at £940.1 billion.. or 61.4% of GDP.. Now, if all financial sector intervention is included..such as the Royal Bank of Scotland.. Lloyds.. et al.. , the Net debt in July 2011 was £2266.3 billion.. or 148.0 per cent of GDP.. This is known as the unadjusted measure of public sector net debt..
Now lets break that down into something perhaps a bit more understandable..
If we say, that taking all those at work into account and the various incomes they earn.. we could strike a mean amount for 'work hours'.. Lets set that at say, £30 an hour.. we get something close to 75 billion work hours, and that is the true measure of our debt..
This is the depth of the hole our particular government is looking at climbing out of.. Finding some 75 billion hours of productive work.. and that which it pays to each individual worker.. to be applied to an intangible electronic debtor against an equally intangible debt..
And further.. the cost of National debt is the interest the government has to pay on the bonds and gilts it sells.. In the first six months of 2010, the debt interest payments were £21.6billion, suggesting an annual cost of around £43bn.. or 3% of GDP..
And perhaps more disturbing.. it is estimated National debt will could rise close to 100% of GDP by 2012.. It is far and away above the government’s sustainable investment rule of 40% maximum..
But tell the man on the street, that what's needed is 75 billion of his and her hourly wage.. and a light might begin to come on..
Food for thought..
And more on this as the concept is digested..