Thursday, 28 July 2011

Our Debt

I'm wondering if anyone can help me answer a question?

So the United Kingdom is in debt.

The government is raising taxes and will be cutting public spending to reel in the debt and pay it off.

Apparently 'we' owe about £1 trillion or something like that.

So all of us...many of us are paying this money back through tax raises etc.

The banks were in trouble so we bailed them out.

So my question is...

Who do we owe this money to?

Who exactly are we paying this money back to?

It can't be a human free organisation or company because there has to be someone at the end of the line. There is always a person somewhere down the line.

So who is this person or people that we owe all this money to?

If it is the banks then why did we bail them out?

If it is a person then who are they and how do they have so much money to lend?

As you can see I am no economist, but I am seriously troubled by this question.

Anyone care to help?

3 comments:

Karl Relton considering 21st Century Mission said...

Joe

The short answer is the Chinese.

Countries have mechanisms for lending to each other, and China is no exception. Basically they lend us money so we can buy their goods ...

The Chinese could hold the UK, the US and many other western countries to ransom if they suddenly demanded instant repayment. But of course if they did that, we wouldn't be able to buy their goods, so their own economy would then be in trouble ...

Joe Haward said...

But that still doesn't answer 'who', as in a real human being, not a government, or an institution or an organisation, but a flesh and blood person who is the one who actually is getting all this money...

Karl Relton considering 21st Century Mission said...

In theory, every Chinese resident or citizen.

Of course in practice it goes into the Government coffers ... to be spent on new high speed railways and the like.