Could the U.K ever experience a total economic breakdown?

Question

If so,what factors could realistically lead to this?

Answer 1

yes -blair doing its best

Answer 2

Of course, all countries can experience economic breakdown, all it takes is the confluence of a certain chain of events to make an economy so finely balanced, yet so vulnerable to free-fall. In the UK, there are a number of factors which, if aligned in the right way at the right time, could precipitate a total failure in the British economy.

Firstly, the housing market. For years prices for property have in almost all cases soared and soared and soared, this has cooled off substantially over the past 18 months, but with enough monetary stimulus from a relaxed and doveish Bank of England, they could easily pick up like a rocket. This would leave a lot of people stretched to the limit in terms of mortgage payments, as many are now, therefore, any removal of monetary accommodation by the same Bank of England could destroy their purchasing power. This would lead to a scale back in consumer spending and a crash in the general economy.

Secondly, the stock exchange. Subject to global trends and global investment sentiment, the LSE and the FTSE 100 companies are subject to the often harsh judgement of bankers from Tulsa to Tokyo. Such a broad church of people to please inevitably puts a strain on company boards in deciding optimum levels of dividend payments. It is entirely possible that the worldwide investment community may come to the consensus that the LSE is not a good place to put their money, witness the sudden crashes in Wall Street and Tokyo in the Twenties and Eighties respectively. A crash in a stock exchange depresses corporate fund-raising abilities and focuses management attention on cutting costs instead. This, inevitably leads to 'restructuring' or massive lay-offs in more honest terms. This leads to a surge in unemployment, a depression of purchasing power and confidence and a wider crash in the economy.

Thirdly, the public sector. Rapidly rising costs in the NHS etc. threaten the overall financial stability of the British Governmet. A particularly bad management of the NHS by an incompetent Health Secretary could lead to the Chancellr being forced to raise taxes in his next budget to make up for the huge shortfall in this area. Thsi would fall most likely on companies and individuals. Since corporate tax is a tax on investment and enterprise and income tax is a tx on job growth, the hike in each of these leads to a respective declin in enterprise, job growth and investment. If such an unholy trinity occurs, the whole economomy is imperilled.

A confluence of these above factors; a panic crash of the property market coupled with a terror atack on the City, denting investor sentiment and an incompetent Health Secretary hiking NHS costs by, say, £50 billion and the UK economy may very well collapse into the Stygian depths of recession.

Answer 3

There will probably be a global economic breakdown due to the way that economies work at the moment. Our economic system requires continuous growth. In a system of finite resources this is not possible in the long term.

This constant growth is driven by interest bearing loans which reqire not only the payment of the original debt but extra payment which must be provided by economic growth. If this economic growth does not occur, the economy will collapse.

Answer 4

If the US could experience it in 1929, why not the UK. If one could pinpoint the factors, one could definitely avoid it. In fact, the factors known to trigger economic breakdowns are already being monitored and under check. The factor will come out of the blue. Anyway, what about soaring oil prices?

Answer 5

Yes, we import more than we export as we do not have a good manufacturing industry. This is due in part to things like minimum wage as it is now cheaper to source goods elsewhere than manufacture them here. The current cost of houses is prohibitive for many people, esp new buyers, and although it is slowing, the interest rate is constantly rising. If it continues, many people will find themselves with negative equity and have their homes repossessed. The pound will then be devalued as other countries avoid us like the plague so people will be unable to survive.

Answer 6

Yes, we could be near to it now.

Expansion of the public sector beyond the ability of the private sector to pay for it. Particularly, future PFI obligations, unfunded pension obligations. The public sector is inherently inefficient because it has no competition, is unionised, too many committees, inertia, and it carries out a lot of PC type activities that are completely unecessary.

Left wing politics: we have it now, but these days it embraces a radical, if not a revolutionery attitude. PC, breadown of the family, immigration, feminism, with its anti male agenda, too much left wing bias in the television media, left wing indoctrination by university lecturers, anti capitalist attitudes and much more.

We are trying to compete with the far east, but are not successful, because we are relatively high cost.

We are now net importers of oil.

Like the Americans, we are grossly over-borrowed at both personal and governmental level. Our balance of payments is continually in deficit. Asset values ( particularly houses) are grossly overvalued: people continue to borrow against property to fund there routine consumables. This makes the economy appear strong in the short/medium term. But it can't go on.

Young people tend to have unrealistic expectations, often on the back of a poor quality education. We are turning into a society of government scroungers, one parent families etc.

The television media are encouraging a breakdown in society, not only by their left wing bias, but by constantly encouraging dissent against the government, and by constantly holding mini referenda with its viewers on every subject under the sun.

Patriotism, is positively discouraged by the government, we seem to hate ourselves, made to feel guilty about our past and we can't wait to give our country away to the EU.

One could write all night, but you get my general drift.

Answer 7

It already has!!!

Just take a look at the:-

National Health/Care System:

The Education System:

Armed Forces:

Policing:

Auto Industry & manufacturing:

but to name a few services that are all going to pot (to be most polite): due to lack of funding!!

The UK is well and truely up **** creak without a paddle!!!

Answer 8

I always wonder this. We don't manufacture anything, we are mainly a service industry, and fair amount of people work for government, NHS, miltary etc. All these department consume money and they are not efficient. Our house prices are going up and are very expensive. So where is our money and true wealth. We not really providing a service to rest of world.

Answer 9

yes by giving it all to the immigrants as housing benefit and dole money... tee hee

Answer 10

you would have to takeout the world bank and they have to loose emobilarty