Government borrowing is nothing compared to public sector pension liability!Posted on: 27 April 2010 by Gareth Hargreaves
As Greece appeals to the IMF for help with crippling debt, don't for one moment think that the UK is out of the woods. Concern over government borrowing becomes a side issue when compared to our public sector pensions liability.
I find it all very amusing that the UK media are concentrating on the massive government borrowing that we have to repay over the next few years – the £178 billion. It’s a bit like seeing the sapling and missing the forest.
If you produced a proper balance sheet of the United Kingdom the £178 billion would pale into insignificance when you compare it to the liability the government has for all those pensions, of the civil service, armed forces, police, firemen, council workers and of course the NHS.
This figure if properly represented would be around a monumental £600 billion! This figure has doubled in the past 10 years and is likely to keep on doubling in the future. Somehow, or other, our children and grandchildren are going to have to pay this out of their taxes. At today’s value this accounts as £30,000 for every worker in the UK.
Let your children know that as well as their student loans they have another £30,000 to pay out of their future earnings. If you do I'm sure it will influence who they vote for next Thursday!
It’s not over yet!
Greece is going down the pan – and who is going to follow! The Greek government has started to draw down the EU bailout package of some €45 billion. Spain has protested that they will not need help – didn’t Shakespeare write: ‘Ye protest too much your innocence!’
If Spain ends up needing help then Portugal will quickly follow. Who then – the UK? As each country asks for support the economic price they pay on their internal economy is very high. Wage freezes; job losses; reductions in public spending and weak currency – all of which is pain for the voter whichever country they are in.
The knock on effect to the world economy is just as bad. So don’t go out celebrating the election result next Friday. Remember President Reagan’s little quip, ‘You ain’t seen nothing yet!’
I have a confession to make!
Rather than trek out to vote I registered for a postal vote years ago. My papers came in at the weekend. I opened the envelope just as I started to watch the interview with Nick Clegg on The Andrew Marr Show.
Impressed as I was I got straight on to Google to see the last election results for West Norwood. Current incumbent MP, Tessa Jowell, second after Labour was the Liberal Democrats. The Tories hardly show!
You know what comes next – I voted Liberal! The first time in forty years – I’m putting it down to the ‘Clegg Effect’!
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