Running the UK is a sideline

I have been continuing my studies into how money works – inspired by the excellent folk at http://PositiveMoney.org.uk

This has led me to the High Wycombe MP – Steve Barker – who is a director of the Cobden Centre and a thinker of some depth.

In turn, he led me to the Institute of Economic Affairs and Nick Silver, who wrote a shocking and sobering report in 2008 – A Bankruptcy Foretold – about the real size of UK  debt – when you account for pension (and other) liabilities in the way you would for a company.

With the latest figures, UK government debt is not £772 billion (54% of GDP) but £4.8 trillion (333% of GDP).

The figures quantify the situation, but what moved me most was his succinct summing up when he had to update the figure to £6.5 trillion:

Looked at this way, the UK is effectively an enormous unfunded and effectively bankrupt pension scheme, with a large speculative holding in some banks and a sideline in running a small island state off the northern coast of France.

I wonder – is it better to continue with the perverse (but accepted for countries) accounting policy that ignores pension liabilities, or face the reality that the UK – if it were a company – would be bankrupt?

Would that acceptance change our responses to anything – in particular, the spending cuts?

Somehow, I doubt it.

The first post of a new blog

What do you say in the first post of a new blog?

As a minimum, I feel compelled to offer some sort of justification (to myself, at least) for setting it up in the first place: otherwise I may feel I’ve squandered the best part of the last day of 2011.

I have other blogs that cover my professional (= money-earning) interests, but as I’ve got older, I’ve become increasingly opinionated – or “grumpy” as some would have it. Also, more contemplative and questioning. Perhaps also more inquisitive about more topics.

And since thoughts generally remain incompletely formed until written down – I conclude that I created this blog partly to vent my grumpiness, but mostly to help me figure out what I think.

And I hadn’t figured that out, until I wrote that last paragraph – so it seems to be working already.

Good.