Good news or bad news? Britain is just as screwed as we are.
On the one hand, the problem of runaway debt is becoming more and more widespread, and where does one put his assets when debt-burdened governments the world over are looking to steal them? On the other hand, hey, at least the United States seems to suck less when you realize that most everyone else sucks too.
Via today’s Daily Telegraph, the British Institute of Economic Affairs has calculated that Britain’s real debt (including unfunded liabilities) is actually £4.8 trillion.
The IEA raised its concerns after the latest public finances data from the Office for National Statistics (ONS) this week, which showed that the total debt, excluding bank bail-outs, is £816bn – itself a record high. However, the figures strip out the state’s pension liabilities in a contravention of standard accounting practices.
Mark Littlewood, the IEA’s director-general, said: “The latest official national debt figure is seriously misleading. Looming in the background are pension liabilities. These should be moved to the forefront.
The ONS should include these liabilities in their calculations. It is shocking enough to see official figures revealing a jump in national debt over the last year from the equivalent of 48pc of GDP to 56pc, but the grave reality is that our real national debt stands at 333pc of GDP.”
Very sensible indeed, old chap. (Or some such British platitude.)
Another interesting question: Britain or Japan? Which of the storied island empires will be first to crumble under its debt? Japan’s debt stands at $10.55 trillion. (N.B., this sounds much more menacing when you note that this is nearly one quadrillion yen.)
I think the ultimate answer will be found when we know which country will debase its currency faster. And going back to the original question of whether this is good news or bad news, will it mean that the dollar will be in more demand if these respective countries debase quickly?
Perhaps not, since, as bad as £78,000 per capita is, it pales in comparison to the roughly $500,000 in per capita debt we have here in the United States (that’s using a relatively conservative estimate of total debt, which may be quite a bit more). Here’s my prediction. The last economy standing will belong to the only country that is not printing stove kindling or shinplasters and calling it “money.”
But which country will that be?