Big Scary Numbers #2: Everyone in the UK owes £34,281.54

This figure comes from a comment made on John Redwoods blog:

And is obtained by dividing the National debt by the UK Population. I haven’t checked the arithemetic. We’ll assume it is right. Again that’s not really at issue.

No-one in the UK owes anything to anyone unless they are overdue on their credit card, have a bank loan,  haven’t paid their rent or whatever. There is no personal responsibility for any part of the so-called “National Debt”.

A large part of the National Debt is due to the long standing UK trade imbalance with countries like Japan and China. Everyone is probably responsible for part of that £34,281.54.  If , say, they’ve ever bought a Japanese car, that alone could be £10,000 or so.

But that person would have had their car and the Japanese car company would have been paid in full. There’s no debt there. So what’s the problem? Everyone’s happy. Someday the Japanese holders of £10k worth of treasury bonds will decide to cash them in and spend the proceeds.

They may well decide to spend them with a company the car buyer works for and the car buyer will end up getting back £10k as salary. The UK ‘debt’ will be smaller, and everyone will be even happier than they are now.

7 responses to “Big Scary Numbers #2: Everyone in the UK owes £34,281.54

  1. But but but, that very simple story doesn’t compute with my pre-programmed “DEBT…..AAAHHHH!!!!!” narrative. Thats OK though, you’re just another pinko commie liberal and so you must be lying, phew cognitive dissonance averted.

  2. Ah I see I’ve been rumbled! Mind you, the Socialist Workers Party are late with their cheque for last month and if it doesn’t arrive soon, I’ll be writing to let you all know how bad the debt really is!

  3. Ah ha, see a good a moral capitalist party would never be late with a check because of the words of the lord and savior Saint Greenspan:

    “business will regulate itself because they care about their reputations.”

    Jesus sanctioned capitalism – 1
    Atheist devil socialist workers – 0

  4. Pingback: Big Scary Numbers #2: Everyone in the UK owes &...

  5. so the UK govt spends tax credits (pounds)
    some get used to pay taxes
    the rest remain outstanding until used to pay taxes
    they take the form of boe/govt liabilities- cash or balances in various boe accounts,
    and are called ‘the debt’.

    and the gov has decided to pay interest in more tax credits on the balances in securities accounts at the boe.


    • Hi Warren,

      Thanks for dropping by. You offer an interesting take, as always!

      I’ll try to expand on it as the subject of my next posting and if you have time, I’d be interested to know if I’ve got it right.

      Its probably a big ask but if you’ve time to write something with reference to the UK economy…. 🙂

      The UK has had no growth since 2008, about 1% down I think, whereas the US has managed 8%. A common objection is that US can only reflate because they have the world’s reserve currency.

      All the best


  6. the rest remain outstanding until used to pay taxes

    Eventually, right down to the last penny. 100%.

    If that small detail was more widely understood I think it would make clearer the “flow” nature of government spending, or “water under the bridge” as Bill Mitchell has described it.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s