Debt Management – Shouldn’t the Government Lead by Example?
As consumers, we are frequently reminded of the importance of exercising sensibility with our money. The average personal debt in the UK is over £30000 and so employing some conservative spending tactics is sound advice.
But if you think that the average personal debt is high, then you’ll probably be somewhat stunned by the public sector net debt of Britain. Yes, that figure is a staggering £829.7 billion. Yes, billion. And it’s rising rather rapidly. To be specific our national debt increased by £4268 every single second. Concerning? You bet.
The people with the power have come under fierce scrutiny, both for the rate at which it is wracking up debt and for the fact that the public aren’t being informed of some of the more concerning forecasts.
There’s a budget deficit of £178bn in the UK right now. Put simply, that means that public spending is £178 billion more each year than the Government income (for example, from taxes) is. And the Government has been criticised for failing to deal with it.
While Government debt is nothing new, our excessive debts are even leading to our “credit worthiness” falling in eyes of other countries. Call this the Government equivalent of credit rating damage. For the first time, recently, lending to the British was considered more risky than lending to Spain. This could indicate some real problems going forwards.
Of course, Government debt in an economic downturn is almost impossible to avoid. But seeing how the Government handles its debt management going forwards will be interesting….