When will we know if the country is bankrupt?

[somersetchris]

I keep on hearing people say that the country is bankrupt or the economy is bankrupt. But when does it officially become bankrupt? Is it when teachers, nurses, etc cannot be paid or is there some other sign? How far away are we from being bankrupt? Is there any exact (not speculation) figures please?

[Zim Flyer]

From a Zimbabwe experience it's when you have to go to the IMF and they say we will lend you money but these are our terms and you will have to cut public spending.. Personally the day we start cutting back on benefits for people who aren't interested in looking for a job and believe it's acceptable to never work is probably a good thing.

[Cherguevara]

When it can't pay its creditors.

It was surprisingly common for countries to default on their debts in the early modern period (I think Spain was the first doing it it four times in the reign of Phillip II [whilst they were receiving vast shiploads of gold and silver from Spain in addition to tax revenues]). Of course that was during a period of intense inflation which the ease of access to precious metals exacerbated.

I'm not an expert on economic history but it seems representative government with the ability to tax by consent has made it less common.

[eXSBass]

When we go into Hyperinflation.

[Republica]

We wont know. Cos it wont happen.

[wjfox]

UK deficit 'more than predicted' -

http://news.bbc.co.uk/1/hi/business/7984889.stm

[hoody]

Originally Posted by wjfox

UK deficit 'more than predicted' -

http://news.bbc.co.uk/1/hi/business/7984889.stm

How can government stats be so different from the IFS?

[Noostairz]

Originally Posted by wjfox

UK deficit 'more than predicted' -

http://news.bbc.co.uk/1/hi/business/7984889.stm

cor. luckily we have gordon brown though. he's well clever at money.



me? a hot pink tie with feather print? why not.

[hoody]

After walking down Erdington High Street I am proud to report that the UK is already morally bankrupt.

[Republica]

The Government figures dont include the recent banking nationalisations. Just as the IFS figures wont include any possible sale of banking assets. I think.

[TakeMeHigher]

When Zim Flyer's savings run out.

[Zim Flyer]

Originally Posted by TakeMeHigher

When Zim Flyer's savings run out.

or when all they can afford is a loaf of bread

[ill tonkso]

When I give up on the UK and send a turn in the post to Alistair Darling.

[Octoman]

When the dole runs dry and scroungers are forced to get a job.

[ill tonkso]

Originally Posted by Octoman

When the dole runs dry and scroungers are forced to get a job.

More chances of Pigs flying than that happening.
Brings me to a point actually, at the moment particularly, the dole is a drain on our economy, I know the actual percentage of government spending isn't that high but we could get these people into work schemes like the construction of our High Speed rail or some Manufacturing to lower our reliance on imports and give us something to export.
This would not only allow them to give something back to the country and it's tax payers but would also give them new skills and real employment.
Think of it as an economic stimulas, giving people jobs and getting the Primary and Secondary industrial sectors moving again.

[larven]

Originally Posted by ill tonkso

Brings me to a point actually, at the moment particularly, the dole is a drain on our economy, I know the actual percentage of government spending isn't that high but we could get these people into work schemes like the construction of our High Speed rail or some Manufacturing to lower our reliance on imports and give us something to export.

Yeah and in line with that we could get the super rich to cough up their fair share of tax. Lets go after the scroungers and the tax avoiders at the same time. But lets face it none of the two main political parties are going to do this. The Lib Dems would but they won't be forming our next government.

[gothicform]

the IFS figures assume that taxes will never go up to pay off the debts or that spending will go down to pay off the debts. they are bullshit, we know the tories at least WILL do this. its absurd to believe the govt will pay off so much debt we have less than 20% though, both parties seem quite happy with debt knocking around between the 35 and 45 mark.

[gothicform]

the sad thing is the scroungers on benefits are a fraction of the super rich in terms of what they cost the country. benefit fraud, if you take the most extravagant figures around costs the country only £3 billion quid a year. thats a lot, but it's less than a tenth of the tax avoidance by the very rich. the idea of benefit scroungers conning the country is nothing compared to the amount of money the likes of the duke of westminster or richard branson don't pay in tax.

[Octoman]

Thats true. And probably harder to deal with too.

Also, failure to recover the proceeds of crime are a big cost. Did you see Panorama the other week? I can remember the figures but something like 97% of the proceeds of crime are not revovered. This dispite the much trumpeted proceeds of crime act.

One guy on the show admitted to defrauding the taxpayer by £3mln though VAT fraud. He had done a couple of years in jail but they were unable to get the money back. His defense was that he had spent it. He was living in a £2 million house (that was in his mother in laws name) and driving a £70k car that was 'a gift'. We are completely unable to do anthing about this and it is costing us billions every year.

[Smarty]

Originally Posted by somersetchris

I keep on hearing people say that the country is bankrupt or the economy is bankrupt. But when does it officially become bankrupt? Is it when teachers, nurses, etc cannot be paid or is there some other sign? How far away are we from being bankrupt? Is there any exact (not speculation) figures please?

The major country that's come closest to real bankruptcy (defaulting on its sovereign debt) recently is Argentina at the beginning of the Millenium - defaulted on its debts, froze bank accounts so people couldn't withdraw their money, economic collapse. It's only just recovered in the past few years:

http://en.wikipedia.org/wiki/Argentine_economic_crisis

Russia also defaulted on its debt in the late 90's.

http://en.wikipedia.org/wiki/1998_Ru...nancial_crisis