Brooks Newmark drops a debt bombshell

October 19, 2009

Brooks NewmarkBritain’s national debt is far higher than Prime Minister Gordon Brown is willing to acknowledge, Conservative MP Brooks Newmark argues in a new paper published by the Centre for Policy Studies.

The true level of government debt is not 805 billion pounds as currently reported by the Office for National Statistics, Newmark says, calling for an independent audit of the government’s books.

“The lax control of public money over the last decade has created a catastrophic level of debt, now equivalent to 2.2 trillion pounds – or 157.2 percent of gross domestic product,” he writes. “This is an increase of 346 billion pounds since last year, when the true level of government debt was 1.85 trillion pounds (or 126.9 percent of GDP).

Newmark, a member of the Treasury Select Committee, discussed “The Hidden Debt Bombshell” with Reuters:

Comments

This must be true of the UK due to the non transparancy of accounting for Government liabilities in for example Private Funding Initiatives.

Smoke and mirrors…and we are not alone – what about the unfunded liabilities in the US?

The UK exhibits all the failures of the World’s largest economy but without the benefit of having the World’s Reserve Currency ATM.

Who knows where this will end? The IMF?

Posted by Jennifer Heaven | Report as abusive
 

This is a very intelligent and insightful analysis.

We are a nation living well beyond her means at every level. And yet the government and BoE is getting us deeper and deeper into the hole by increasing our indebtedness and devaluing our currency.

This will all end in a good old fashioned currency crisis as bond investors head for the exit, sterling falls of a cliff, inflation rockets and finally interest rates are forced up.

Why any bond investor would want to hold gilts is beyond my comprehension as we clearly have no honourable way out of our national liabilities. Government bonds are the last major bubble waiting to crash. When it does the consequences will truly be cataclysmic and will force a radical rethink of economic policy across the globe. What we have seen so far in terms of reform of the international monetary system is mere window dressing, sticky plaster on a gaping wound. The real pain is still to come.

Posted by Haroon Abbasi | Report as abusive
 
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