Alex Hern presents a picture which says everything needed about the sources and problems of British debt
Sometimes, a picture really is worth a thousand words:
Whether you look at international comparisons such as this one, or historical comparisons, it is clear that our government debt, though large, is not unsustainably so. Greece’s government debt is 145 per cent of its GDP; ours is 80 per cent (Eurostat).
Our financial sector, however, holds over 600 per cent of Britain’s GDP in debt, and as we reported earlier today, the Vickers report is doing nothing to stop that proportion growing. Icelandic financial debt hit 1000 per cent of its GDP before reality caught up with them.
We do have a debt crisis, but it’s not government debt, it’s banking.
(Chart from Business Insider via The Automatic Earth)
See also:
• Implementing Vickers won’t stop the next crisis – Josh Ryan Collins, December 20th 2011
• Cameron’s excuses don’t add up – Cormac Hollingsworth, December 13th 2011
• Trouble ahead for Cameron: Majority of Euro rebels were from class of 2010 – Shamik Das, October 25th 2011
• A damp squib or quiet radicalism from the Vickers Commission? – Ben Fox, September 13th 2011
• The Vickers report lacked ambition and lacks bite – Joe Cox, September 12th 2011
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42 Responses to “The UK isn’t Greece, it’s Iceland”
FreeEdPeeps
#UK : The UK isn ’t Greece, it ’s Iceland http://t.co/MdNLNVCW
D.
The UK isn't Greece, it's Iceland: http://t.co/2hmqVIjq Excellent graphic showing how tiny Govt #debt is next to that of financial sector.
Selohesra
We all know that the City represents a vitally important part of the economy and of course it makes sense to reduce its proportion of the economy but surely you don’t need to be a genius to see that evening things up is best done by growing the other areas rather than destroying the biggest contributor. Old man Cable and many articles on LFF seem to want war with the City & to destroy it.
Reminds me of a Sesame St scene where they wanted to know how many balloons they had – some muppet (geddit) procedeeded to burst them one by one counting as he went
Hedley Lamarr
'We do have a debt crisis, but it’s not government debt, it’s banking.' http://t.co/lHEyAM2o #frothers
Trevor Cheeeseman
Good article.
Lord blagger – maybe you should read why 2012 coudl be an interesting year for european banks, according to Reagan’s ex-adviser…
http://www.financialsense.com/contributors/lee-adler/2011/12/14/david-stockman-on-the-coming-euro-train-wreck