The Hidden Debt BOMBSHELL - Why Government Debt is set to Soar

Why higher interest rates, slower economic growth and an ageing population is causing a sharp rise in government debt. Also, should we worry about debt?

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[mattjackson]

A huge problem the UK urgently needs to address is significantly overvalued property prices on the back of decades of ultra cheap debt. Prices are so high they now need to fall by around 60% to get back to the long term earnings to house price average. The problem is the government have done everything possible to keep prices significantly overvalued through immigration policy, help to buy, stamp duty holidays, restricting house building, not putting restrictions on the amounts banks can lend etc. but all this has done is keep the bubble going for longer with even more disastrous long term consequences were now starting to see unfold. Cheap debt has effectively resulted in 50 years of house price inflation to occur in 20 years and now young people are taking on huge amounts of debt to buy a basic home which is unsustainable over the long term when taxes are also likely to increase to pay for the aging population, government debt and switching to renewable energy.
Also I think the publics increased tolerance to high debt will also make reducing inflation very tricky. When times get tough people tend to just take out loans, use credit card debt or extend mortgages and not resort to cutting back. People will continue to spend and core inflation will remain high.

[cobbler]

The UK’s problem is low GDP and low investment and Osborne’s austerity.

[BayouRepairGuy]

Glad to see you making videos brother I’m a big fan

[paultravers]

Debt to GDP is a completely BS measure of a country's economic health. Not least because government spending is included in the GDP figure, and we know a huge proportion of that government spending itself is debt based. What really matters is a nation's assets and liabilities i.e. its balance sheet. In that regard the UK is in a mess.

[kevinu.k.]

That was a remarkably good vlog.
Definitely a 'watch twice' one.
I'll go and read that resolution Foundation Report. It looked interesting.
It would appear to me that the government would to well to do more to stimulate those areas of industry which look likely to be growth areas in the future.
As always - Thanks.

[gingerssmelllikecabbageand]

It all starts with thatcher, 80’s move away from heavy manufacturing sector and remodelling the economy on services sector. Thing is you can have both in an economy, but thatcher smashed the north into the ground. Never offered a replacement or eduction for the thousands of men that lost their jobs. But by 97 Blair had London firing on all cylinders 3.5% productivity, this managed to keep the rest of the country happy. Problem is we banked on London to support the rest of the country and by 2019 London productivity had fallen to 0.04%. The country has had an 8% deficit running for some time, deficit is fine so long as you get the rolling again or for someone else to pay for it, which had been happening until brexit. External investment was helping the deficit, alas since brexit, investors are less now in the U.K.. And now we have a life given not earned, public services are going to take beating. We will look in 5-10yrs time what can we do to save the country. Rejoining the EU will play a big part in that, boomers will be pushing up flowers, but it won’t be a quick fix and a lot small politics and economics will have to play out. It takes 2 hours to knock a house with a digger, can take 9-12 months to build a home. And that’s the analysis of brexit and our economic path for the last 35yrs has lead us to this. Government has almost know led the house down, the next government are not going to have much success either. Damage control really that’s all, rebuild slowly.

[piccalillipit]

*IM MORE WORRIED* about the staggering levels of corporate debt - taken on to do share buy backs to make CEO's rich - all at nishto % - now at 6% and unaffordable for many companies

[davidcarr]

Another great video sir !! So it seems you're saying that what really scared the markets during Liz's short reign was a combination of post-Covid debt and inflation. I suppose the big question which no-one can really answer was: Was Osborne right or wrong to cut Gov. spending ? If extra spending had genuinely contributed to productivity and growth increases then maybe, but if it hadn't, then the UK would be in an even worse post-Covid/post-Brexit situation. Government spending, does however, frequently go in the wrong place to make much difference to productivity and growth, as others below have said. Tax asset holders and make people contribute to their health care - saving rates are way too low in the U.K. Technology has contributed greatly to productivity in the past but those days are probably over. Property prices are very damaging to the UK economy also. Why few people seem to recognoze this, I don't know. Probably because it's such a gravy train.

[willb]

Who is the government (read: we) indebted to? Qui Bono?

[aturan-foqt]

Good point, governments should not cut the public investments even if there is economical problems. 👍

[equin]

In simple terms, in the present; housing & bringing up children is very expensive. That's why the Fertility rate is dropping like a stone, which means for the future a smaller workforce which means low growth = shrinking economy. This and an ever growing ageing population will continue to put pressure on the countries finances.
Interestingly this is almost the exact opposite of the 1960's so we could draw ideas from the past but this government does not want a fall in house prices.

[Anasteroiddestroyer]

It's crazy how fixing over inflated house prices can solve almost all of these issues.

[talhahussain]

I like your channel man, I hope it grows with you )

[uweinhamburg]

It is very simple - the UK is living FAR over it's capacity.
Net import plus budget deficit add up to something like 10-15% of GDP. Ok, if this happens one year if immediately after that the direction of the country is changed 180°.

[Mrgolf]

Thank you very much for this insightful guide

[jamescat]

increading private sector involvement in the NHS has also led to more spending in health care, got to get that divi from somewhere

[tropics]

Seems to me that constantly increasing taxes to pay for constantly increasing government spending will slowly strangle the economy to death ? Private capital and investment is already leaving. What is the government doing to keep this at home ?

[convinth]

I wish one could download your charts. They're worth a longer look. By the way, did not the inflation of the 70s play a part in reducing the ratio of debt to GDP?

[stevesecret]

How many unexpected economic shocks will there many as they have already planned to profit from!!

[leighrobinson]

Road pricing for EVs seems like another shortsighted policy. Surely the economic multiplier of cheap and mostly green (when the grid gets there - another missed opportunity from the 2010s) transport would outweigh any attempts to claw back of current levels of VED? The sky high duty on fuel was squandered and not invested in the de-carbonisation of the UK transport sector; it was not envisioned to shaw up the general public finances. I wonder what the true cost of those levies have been over the years given we have little to show for it...