I live in us and we are constantly reminded about our soaring debt and deficit and we owe china a bunch of money. how it got this way i dont know.
does u.k. have any of this?
2007-01-16 02:58:15 · 10 answers · asked by Anonymous in Social Science ➔ Economics
Don't know what is is compared to USA but yeah it's massive.
2007-01-16 03:05:53 · answer #1 · answered by Sluugy 5 · 1⤊ 0⤋
We certainly do, but not quite on your scale yet. Governments are spending far more than they are generating in tax revenues. (fiscal deficit). We have a massive balance of trade deficit (importing and consuming far more than we are exporting). Individuals are spending far more than they are earning. (borrowings against inflated house prices, and over spending on credit cards ie. carrying balances forward). This has been going on for years, particularly in the United States, where the problem now seems insurmountable, and entraps the saver nations, Japan and China for example.
If I owe you a pound, I have a problem. If I owe you a million pounds, you have a problem. I don't think that the USA has any intention of repaying the creditor nations, because the sums are too big, and any attempt to demand it would collapse the financial system. Buy some gold.
The USA has had a spending mindset for years and it doesn't know how to stop. Britain, is trying to catch up. You have to remember that government have been running with a low interest rate policy for years. This has created a house price bubble, created spending against borrowed money, and has encouraged its citizens to be unafraid of debt. We are heading for the rocks, but so are the creditor nations. At times like these, Governments usually create a diversions. Wars, global warming etc.
2007-01-16 12:32:33 · answer #2 · answered by Veritas 7 · 1⤊ 0⤋
most first world countries have trade deficits, none as large as the US. the US is an incredibly wealthy nation, so it can tolerate huge debt and deficits, which aren't necessarily bad. a major part of the US debt is in the form of loans and payments via the world bank to third world countries that are squandered by the host nations and/or never repaid (e.g.: brazil, nigeria, russia). much of the time this is written off as the inherent cost of global economization.
the US, nor any country for that matter, doesn't "owe" china money, it's simply a reflection of trade discrepancies and the cost of producing goods. the main problem re: trade with china is that china has devalued its currency for years, a problem that will be corrected in 2007 or 2008.
2007-01-16 11:13:18 · answer #3 · answered by Super G 5 · 0⤊ 1⤋
Yea, we have a deficit, but not as huge as the USA. It should be a bit less now we have finally payed off our war debts to the US
2007-01-16 11:02:41 · answer #4 · answered by footynutguy 4 · 0⤊ 0⤋
Well our NHS is humungously in debt so I wouldn't be surprised if we are in debt in other areas too! It is not something that is highly publicised though!! How the hell can China afford to loan money to America?? Weird!! I know they are a fast growing country but didn't think they had enough to loan to the US!!
2007-01-16 11:03:16 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Put it this way, if the Uk was a person, the bailiffs would have taken the VCR, television and sofa away by now.
2007-01-16 11:04:13 · answer #6 · answered by Anonymous · 1⤊ 0⤋
Sterling is not widely held outside of the UK, so we don't have the USA's "China Problem".
2007-01-16 11:07:22 · answer #7 · answered by Anonymous · 0⤊ 1⤋
It has debt , most countries do! hwoever we have just payed off our debt to usa for the war , so it not to bad
2007-01-16 11:06:19 · answer #8 · answered by Paul M 2 · 0⤊ 2⤋
Yes, we have the the largest amount of debt in Europe!
HTH : )
2007-01-16 11:07:52 · answer #9 · answered by Anonymous · 1⤊ 0⤋
HOW CAN WE THE UK, HAVE A DEFICIT LIKE THE USA? WE ARE A FRACTION OF THE SIZE AND POPULATION.
2007-01-16 11:07:37 · answer #10 · answered by ann w 2 · 0⤊ 1⤋