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Friday, 22 August 2008

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The only problem with the analysis (genuinely - aside from that it's really rather good) is that the debt point is nonsense. Having public sector debt of 40% of GDP is low by international and historical standards, and the real interest rate the UK government is facing on new borrowing is less than 1%. If Gordon wanted to take the national debt up to 60% of GDP, he'd have no problems borrowing the money to do so - nor any problems paying the interest (that isn't to say it's a good idea to do so, of course).

I also have no idea why he thinks the IMF would be involved in any way. They lend money to bail out economies which can't get loans in the market, whereas that's the least of our problems...

John, nice to see you over here for a change.

However, I'm surprised at a gimlet-eyed, young sceptic like you swallowing 'Broon's' figures whole, especially given his record. The figure of 40% debt to GNP *ignores* pension and PFI liabilities which 'oor wee Gordie' saw fit to place off the balance sheet, a habit, were he ever to run a public company, that would see him inside in no time, for a long time!

"The Centre for Policy Studies argues that the real national debt is actually £1,340 billion, which is 103.5 per cent of GDP. This figure includes all the public sector pension liabilities such as pensions, Private Finance Initiative contracts e.t.c (Northern Rock liabilities)"

http://www.economicshelp.org/blog/uk-economy/uk-national-debt/

You are right, I am sure, that he can borrow the money, although the price will be raised by the lenders as our economy declines, and especially as just about every non-oil government is seeking to borrow as well as us. However my point remains, it will not be, as you suggest (in a figure of speech), Mr. Brown who will be repaying it plus interest, but us.

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