Debt - time to sober up

Earlier this week I heard three of our politicians ( Yvette Cooper, Philip Hammond and Vince Cable) being interviewed by Jeremy Paxman.

Paxo asked if there was any limit on our borrowing. All three evaded in their answer ( there motives I imagine as Yvette Cooper - to avoid admitting the potential disaster we are heading to, Philip Hammond - to avoid the what will you cut follow on question, and Vince Cable - to stay on that fence Lib Dems love so much ).

Well part of the answer is beginning to form up. The UK, along with Italy, is already having trouble selling its new debt - see article in the Financial Times here ( it was only available for one day -so you'll have to take my word for it if you lack a subscription).

Of course the UK will stop being able to borrow money when people stop lending it to us. In Iceland the government is having to offer 18% + to foreign investors. In the UK Gordon Brown is preening himself on the idea of interest rates heading even lower - but then maybe nobody will lend ( ok its a bit more complex than that - but its the gist ).

One day, maybe soon - very soon, we won't be able to borrow enough to pay the interest ( or rather other people will think this will happen ).

At that time the IMF will be invited back to lend us money and dictate our fiscal and monetary policies. It could happen very soon. ( And remeber the IMF is starting to get its money from the Saudi's and Chinese, don't expect a sympathetic or no strings attached helping hand ).

BBC2 had the film IOUSA last week ( available via the BBC iplayer for a short while here ) , I recommend watching it. Catch the bit about 2/3 of the way through when they talk about the US's trade deficit being the worse in the world ! Guess who's second worse ?

Personally I don't think Gordon Brown and Labour have the mandate to run up massive debts that will take generations to pay of based on their need to get reelected. They should go to the country on their plan and then we could have a proper debate.

---

Update: Just found this estimate of world trade balances on the CIA World Fact book ( good news Spain is 2nd worse - we're third worse, scrowl down to see ). And this is before this years trouble really start getting into the figures.

Rank	Country	Current account balance	Date of Information
1	China	$ 371,800,000,000	2007 est.
2	Germany	$ 254,500,000,000	2007 est.
3	Japan	$ 210,500,000,000	2007 est.
4	Saudi Arabia	$ 86,620,000,000	2007 est.
5	Russia	$ 78,310,000,000	2007 est.
6	Switzerland	$ 72,350,000,000	2007 est.
7	Norway	$ 64,070,000,000	2007 est.
8	Kuwait	$ 47,500,000,000	2007 est.
9	Netherlands	$ 47,310,000,000	2007 est.
10	Singapore	$ 46,390,000,000	2007 est.
11	Sweden	$ 37,970,000,000	2007 est.
12	United Arab Emirates	$ 34,530,000,000	2007 est.
13	Taiwan	$ 32,880,000,000	2007 est.
14	Algeria	$ 32,050,000,000	2007 est.
15	Iran	$ 28,950,000,000	2007 est.
16	Malaysia	$ 28,930,000,000	2007 est.
17	Hong Kong	$ 28,040,000,000	2007 est.
18	Libya	$ 26,380,000,000	2007 est.
19	Venezuela	$ 20,000,000,000	2007 est.
20	Thailand	$ 14,920,000,000	2007 est.
21	Angola	$ 13,580,000,000	2007 est.
22	Canada	$ 12,670,000,000	2007 est.
23	Austria	$ 12,030,000,000	2007 est.
24	Finland	$ 11,400,000,000	2007 est.
25	Indonesia	$ 11,010,000,000	2007 est.
26	Qatar	$ 10,410,000,000	2007 est.
27	Azerbaijan	$ 9,019,000,000	2007 est.
28	Argentina	$ 7,438,000,000	2007 est.
29	Chile	$ 7,200,000,000	2007 est.
30	Brunei	$ 7,101,000,000	2007 est.
31	Philippines	$ 6,351,000,000	2007 est.
32	Iraq	$ 6,025,000,000	2007 est.
33	Korea, South	$ 5,954,000,000	2007 est.
34	Trinidad and Tobago	$ 5,378,000,000	2007 est.
35	Israel	$ 5,197,000,000	2007 est.
36	Luxembourg	$ 4,921,000,000	2007 est.
37	Oman	$ 4,866,000,000	2007 est.
38	Uzbekistan	$ 4,615,000,000	2007 est.
39	Denmark	$ 4,279,000,000	2007 est.
40	Belgium	$ 3,282,000,000	2007 est.
41	Bahrain	$ 2,907,000,000	2007 est.
42	Nigeria	$ 2,514,000,000	2007 est.
43	Botswana	$ 1,973,000,000	2007 est.
44	Bolivia	$ 1,796,000,000	2007 est.
45	Brazil	$ 1,712,000,000	2007 est.
46	Turkmenistan	$ 1,705,000,000	2007 est.
47	Gabon	$ 1,552,000,000	2007 est.
48	Peru	$ 1,516,000,000	2007 est.
49	Burma	$ 1,427,000,000	2007 est.
50	Timor-Leste	$ 1,161,000,000	2007 est.
51	Ecuador	$ 1,064,000,000	2007 est.
52	Syria	$ 908,000,000	2007 est.
53	Namibia	$ 805,200,000	2007 est.
54	Bangladesh	$ 804,700,000	2007 est.
55	Egypt	$ 500,900,000	2007 est.
56	Equatorial Guinea	$ 415,000,000	2007 est.
57	Cuba	$ 240,000,000	2007 est.
58	British Virgin Islands	$ 134,300,000	1999
59	Papua New Guinea	$ 125,800,000	2007 est.
60	Paraguay	$ 119,000,000	2007 est.
61	Bhutan	$ 116,000,000	2007 est.
62	Nepal	$ 58,000,000	2007
63	Lesotho	$ 49,000,000	2007 est.
64	Cook Islands	$ 26,670,000	2005
65	Suriname	$ 24,000,000	2007 est.
66	Palau	$ 15,090,000	FY03/04
67	Comoros	$ 8,000,000	2007 est.
68	Guinea-Bissau	$ -6,000,000	2007 est.
69	Tuvalu	$ -11,680,000	2003
70	Kiribati	$ -21,000,000	2007 est.
71	Mongolia	$ -23,000,000	2007 est.
72	Tonga	$ -23,000,000	2007 est.
73	Samoa	$ -24,000,000	2007 est.
74	Swaziland	$ -24,000,000	2007 est.
75	Micronesia, Federated States of	$ -34,300,000	FY05 est.
76	Anguilla	$ -42,870,000	2003 est.
77	Belize	$ -43,000,000	2007 est.
78	Sao Tome and Principe	$ -55,000,000	2007 est.
79	Kosovo	$ -58,300,000	2007
80	Vanuatu	$ -60,000,000	2007 est.
81	Sierra Leone	$ -63,000,000	2007 est.
82	Gambia, The	$ -71,000,000	2007 est.
83	Dominica	$ -72,000,000	2007 est.
84	Central African Republic	$ -77,000,000	2007 est.
85	Burundi	$ -101,000,000	2007 est.
86	Cape Verde	$ -132,600,000	2007 est.
87	Grenada	$ -138,000,000	2007 est.
88	Solomon Islands	$ -143,000,000	2007 est.
89	Cote d'Ivoire	$ -146,000,000	2007 est.
90	Rwanda	$ -147,000,000	2007 est.
91	Saint Vincent and the Grenadines	$ -149,000,000	2007 est.
92	Guyana	$ -157,000,000	2007 est.
93	Togo	$ -159,000,000	2007 est.
94	Saint Kitts and Nevis	$ -163,000,000	2007 est.
95	Chad	$ -171,000,000	2007 est.
96	Mauritania	$ -184,000,000	2007 est.
97	Uruguay	$ -185,600,000	2007 est.
98	Saint Lucia	$ -199,000,000	2007 est.
99	Eritrea	$ -205,000,000	2007 est.
100	Antigua and Barbuda	$ -211,000,000	2007 est.
101	Djibouti	$ -212,000,000	2007 est.
102	Liberia	$ -224,000,000	2007
103	Zambia	$ -228,000,000	2007 est.
104	Macedonia	$ -249,000,000	2007 est.
105	Barbados	$ -254,000,000	2007 est.
106	Kyrgyzstan	$ -267,900,000	2007 est.
107	Seychelles	$ -272,000,000	2007 est.
108	Laos	$ -285,000,000	2007 est.
109	Malawi	$ -318,000,000	2007 est.
110	Niger	$ -321,000,000	2007 est.
111	Cameroon	$ -325,000,000	2007 est.
112	Tajikistan	$ -351,000,000	2007 est.
113	Yemen	$ -362,000,000	2007 est.
114	Congo, Democratic Republic of the	$ -402,000,000	2007 est.
115	Mauritius	$ -408,300,000	2007 est.
116	Guinea	$ -424,000,000	2007 est.
117	Malta	$ -424,500,000	2007 est.
118	Benin	$ -441,000,000	2007 est.
119	Mali	$ -446,000,000	2007 est.
120	Haiti	$ -467,000,000	2007 est.
121	Maldives	$ -472,000,000	2007
122	Cambodia	$ -506,300,000	2007 est.
123	Fiji	$ -507,000,000	2007 est.
124	Armenia	$ -571,400,000	2007 est.
125	Zimbabwe	$ -649,000,000	2007 est.
126	Moldova	$ -694,700,000	2007 est.
127	Burkina Faso	$ -706,000,000	2007 est.
128	Uganda	$ -744,700,000	2007 est.
129	Mozambique	$ -795,100,000	2007 est.
130	Ethiopia	$ -826,800,000	2007 est.
131	Madagascar	$ -890,000,000	2007 est.
132	Tunisia	$ -905,000,000	2007 est.
133	Nicaragua	$ -1,001,000,000	2007 est.
134	Sri Lanka	$ -1,019,000,000	2007 est.
135	El Salvador	$ -1,119,000,000	2007 est.
136	Kenya	$ -1,147,000,000	2007 est.
137	Albania	$ -1,202,000,000	2007 est.
138	Honduras	$ -1,225,000,000	2007 est.
139	Bahamas, The	$ -1,442,000,000	2007 est.
140	Senegal	$ -1,458,000,000	2007 est.
141	Congo, Republic of the	$ -1,491,000,000	2007 est.
142	Costa Rica	$ -1,499,000,000	2007 est.
143	Ghana	$ -1,549,000,000	2007 est.
144	Panama	$ -1,577,000,000	2007 est.
145	Guatemala	$ -1,663,000,000	2007 est.
146	Jamaica	$ -1,830,000,000	2007 est.
147	Morocco	$ -1,834,000,000	2007 est.
148	Tanzania	$ -1,856,000,000	2007 est.
149	Bosnia and Herzegovina	$ -1,939,000,000	2007 est.
150	Georgia	$ -2,044,000,000	2007 est.
151	Lebanon	$ -2,046,000,000	2007 est.
152	Cyprus	$ -2,144,000,000	2007 est.
153	Slovenia	$ -2,181,000,000	2007 est.
154	Dominican Republic	$ -2,231,000,000	2007 est.
155	Jordan	$ -2,767,000,000	2007 est.
156	Belarus	$ -2,876,000,000	2007 est.
157	Iceland	$ -3,189,000,000	2007 est.
158	Sudan	$ -3,447,000,000	2007 est.
159	Estonia	$ -3,771,000,000	2007 est.
160	Slovakia	$ -3,998,000,000	2007 est.
161	Czech Republic	$ -4,534,000,000	2007 est.
162	Croatia	$ -4,850,000,000	2007 est.
163	Lithuania	$ -5,260,000,000	2007 est.
164	Mexico	$ -5,525,000,000	2007 est.
165	Colombia	$ -5,862,000,000	2007 est.
166	Ukraine	$ -5,918,000,000	2007 est.
167	Latvia	$ -6,231,000,000	2007 est.
168	Serbia	$ -6,889,000,000	2007 est.
169	Vietnam	$ -6,993,000,000	2007 est.
170	Kazakhstan	$ -7,184,000,000	2007 est.
171	Hungary	$ -8,018,000,000	2007 est.
172	Pakistan	$ -8,255,000,000	2007 est.
173	Bulgaria	$ -8,530,000,000	2007 est.
174	New Zealand	$ -10,230,000,000	2007 est.
175	India	$ -12,110,000,000	2007 est.
176	Ireland	$ -14,120,000,000	2007 est.
177	Poland	$ -15,910,000,000	2007 est.
178	South Africa	$ -20,630,000,000	2007 est.
179	Portugal	$ -21,750,000,000	2007 est.
180	Romania	$ -23,020,000,000	2007 est.
181	France	$ -31,250,000,000	2007 est.
182	Turkey	$ -37,580,000,000	2007 est.
183	Greece	$ -44,400,000,000	2007 est.
184	Italy	$ -51,030,000,000	2007 est.
185	Australia	$ -56,780,000,000	2007 est.
186	United Kingdom	$ -119,200,000,000	2007 est.
187	Spain	$ -145,300,000,000	2007 est.
188	United States	$ -731,200,000,000	2007 est.