UK PUBLIC DEBT

UK Public Debt

Public and Private Finance in Property

Introduction

Public debt or sovereign debt refers to all debts which is maintained by the state against individuals or other country. It is a way to get financial resources by the state or any public authority usually materialized by issuing securities. It is also an instrument used by the States to solve the problem regarding the lack f money, for example:

When you need a cash (cash on hand) to meet immediate payments.

When you need finance for medium and long term, primarily investments.

As years are passing UK budget deficit has been increasing. UK government is spending more money than taxing on the citizens. In this paper we will see what factors account for the current level of public indebtedness in the UK and What economic and fiscal measures can the UK Government use to reduce that level of debt in the next 5 years.

Discussion

Public dent in UK has been increasing to 15,200 million pounds (18,185,000 Euros), well above the 8,000 million pounds (9,572,000 Euros) estimated National Statistics Office (ONS). The figure of net public debt, which ignores the interventions in the financial sector was also well above that achieved in February 2011, of 8,900 million pounds ($ 10.648 million Euros). When one month left to finish the fiscal year, the British government is still well positioned to meet its goal of borrowing for the year 2011-12, which has been set at 127,000 million pounds (151,863,000 Euros). So far this year, the British government debt stood at 110,000 million pounds ($ 131,000 million), with room to achieve that goal, said the ONS. This figure is lower than the 118,900 million pounds (142,234,000 Euros) of the total public debt recorded during the first 11 months of 2010-2011. In total, net debt in the UK currently stands at 995.0000 million pounds (1.2 billion Euros). Data unveiled today by the ONS are a setback for the British Minister of Economy, George Osborne, who will defend his deficit reduction program in the presentation today of the general budget. It is also expected that the Minister of Finance anticipates a drop in public debt below the 100,000 million pounds (119,566,000 Euros) for fiscal year 2012-2013 for the first time since 2008-2009 (www.economicshelp.org).

Factors responsible for debt increase in UK

Political market

Cause of the rising public debt in UK is due to the policies implemented by the State. To be quite honest, we must mention last parliamentary majorities that are followed for thirty years because if the public debt has increased, it is because of poor state that they have voted, that is i.e. expenditure booked by the State that have been passed exceeded revenues recorded.

Errors of macroeconomic theory cherished by the political market

Underlying these policies, positions and other votes, there are two cause of public debt, or the dream, if you prefer, the application of economic theory is absurd to live in Wonderland Alice. This is certainly not the theory of Marx and Marxist theories though but ...