Wednesday, July 14, 2010

The true cost of socialism revealed

The Office for National Statistics (ONS) today released a study revealing that the public purse after Labour's disastrous rule will be faced with £4.84 trillion of liabilities compared with the current public sector net debt figure of £903bn. This effectively means that labours 13 year regime will end up costing the taxpayers (and by this I mean the real tax payers, not the public sector which I already fund and who simply give some back) into the next generation and beyond. They may just have crippled any hope of an economic recovery for a very long time.

The Office for National Statistics (ONS) released a study revealing that the public purse could be faced with £4.84 trillion of liabilities compared with the current public sector net debt figure of £903bn.
David Hobbs of the ONS described the public sector balance sheet as an “open-ended concept” as he outlined liabilities that are considered to be “off-balance sheet” or not covered in official debt measures. 
The Government’s stakes in RBS and Lloyds Banking Group could add another £1 trillion to £1.5 trillion, the ONS said, the largest potential liability.
Meanwhile, unfunded public service pension obligations could account for a further £770bn to £1.2 trillion, while unfunded state pension schemes amounted to between £1.17 trillion and £1.35 trillion.
“For transparency, it is important for a broad range of information on public sector liabilities, obligations and contingencies to be made readily available, whether or not included within balance sheets,” Mr Hobbs said.
The report also highlighted a potential £200bn of off-balance sheet obligations from private finance initiative schemes, and £40bn in nuclear decommissioning liabilities.
Hr Hobbs also set out a further £500bn miscellaneous grouping of guarantees and contingent obligations, some of which “are more likely to materialise than others”.
The total in liabilities and obligations came to £3.68 trillion to £4.84 trillion. 
Standard & Poor’s, the ratings agency, earlier this week kept Britain’s debt rating on negative watch, saying it had concerns about the forecasts laid out by George Osborne, the Chancellor. 
There are still people out there who are now blaming the Tories for cancelling school rebuilds, public service unions planning strike action over possible job losses.The man behind the fiasco meanwhile is missing in action, currently writing his memoirs and going to the zoo for a party. He's only turned up at Parliament for 2 days, yet got paid for the 68 days it's been running, no doubt his constituents are pleased about that, though they'd be daft enough to vote for a donkey with a red rosette given the opportunity.
I'm no economic expert, so I don't know how we'll get out of this one, but I suspect if we do it will be horrendous and will be painful and destructive to lives and incomes, particularly the public sector as it's one of the few areas the government can go wholesale on, though I expect taxes will rise in certain areas too. A few good tax cuts on business might work, particularly if we can attract them here to employ people. After all, what they don't pay in rates, the employees pay in income tax as well as spending power. Still if the socialists thought the last budget was bad, watch this space, it's going to get a lot worse before it might get better. Hopefully the coalition will keep rubbing Labours faces in the mess they made, the last thing this country needs is socialism or a Labour government.

1 annotations:

Hexe Froschbein said...

"I'm no economic expert, so I don't know how we'll get out of this one"

We can't and we won't.

Mathematically it's an impossibility, we're broke and up in the air over a cliff, just like
Wiley Coyote. What keeps us going as we're trading whilst insolvent is the printing press and the financial illiteracy of the population, and there is a few more years in this scam yet, but in the end there is no escape.

It isn't possible to pay it off (not with our demographics anyway), we're well past the threshold for bankruptcy, even without that debt already anyway.

In the end that'll mean very low pensions, no matter how much people have paid in or were promised (also compare Russia after the Soviet collapse and their 'Babushka' problem, which a couple of hard winters and pennies for pensions solved) If you have a private pension, no matter, because before this is all over, you too will have been raided a number of times to the point of oblivion.

As for the socialists, of course Labour will eventually get another run, there are always lots of people who want something for nothing and that is what Labour sells them for their votes.

It's the 1920's reloaded!