Tuesday, 21 July 2009

Government Spending meltdwon: IMF beckons

Just for the avoidance of any doubt, check out this short BBC article. The Government has borrowed £13 billion in June, up from £7.5 billion in June last year.

So borrowing is more or less doubling. At the same time tax revenues have fallen £32 billion.

So, bag of fag packet exercise:

Total tax take likely to fall about £40 billion after adjustments to end of this year.
total government borrowing to double to £150 billion (minus the £70 'expected').

Structural deficit (this is the money being spent for which there is no income, equivalent to the spend over your monthly salary payments) - c. £120 billion.

So whoever gets in Government are going to have to slash that much public spending, for the record that is nearer 20% than 10%. My bet is still that the IMF will have to do this when our politicians bottle it.

Surely after this, Labour can never win power again?

15 comments:

Blue Eyes said...

Perversely, I am quite looking to the wheels coming off. I wonder if the British hordes will take to the bashing of pots and pans, Argentina-style?

hovis said...

"Surely after this, Labour can never win power again?" They will and the election will be much closer than thought. There is a great cognitive dissonance over the fact that Labour have caused far more destruction than has been acknowledged or felt (as yet). The media are still not willing to admit its the welfare state that will need to shrink.. and when it does it will be the IMF or the Tories (who themselves are spineless) Cameron Osbourne are more Heath than Thatcher ...

Bill Quango MP said...

Maybe. If they are Le Creuset or Hahn

BenefitScroungingScum said...

Won't the cycle just happen again as it always does? BG

Sebastian Weetabix said...

clearly they're hoping the IMF meltdown will occur after the Tories get in. There are, sadly, more than enough stupid people in this country who will blame the Tories & continue to vote labour.

Roy said...

"Surely after this, Labour can never win power again?"

The worry I have is if house prices begin increasing (even just a few percent) around polling day - if that happens then NuLab would start using that to swing confidence in the public and end up winning the elections!

I just have this bad feeing that Gordon isn't going to go as easily as we all hope!

Demetrius said...

Also, I think the security alone for the 2012 Olympics could run to a real cost of £15 billion, and thats just one of the minor items on current spending plans.

Mick said...

there's too many people too dependant on state largesse to make it anything other than a close election.

And to be honest I hope Labour win - let them sort their own mess out!

Matthew said...

None of your figures seem to relate to each other. Can you clarify what you mean by structural deficit and how you arrive at it?

Anonymous said...

What Hovis said.

They've screwed things up before (every time they've got in, actually), and they always get re-elected in the end.

People just can't believe that you cannot have something for nothing.

Anonymous said...

Assuming Labour do win the next election, it'll be interesting to see who Mandelson appoints as Prime Minister.

sobers said...

I've said it before, and I'll repeat it: this country is wedded to living beyond its means, and will punish at the ballot box any politician who attempts to change that state of affairs. So the only way the problem will be resolved is in some catastrophic way - bond buyers strike/currency crisis/IMF intervention. When that occurs is open to question, but the maths says we cannot be that far away from it. So be prepared.

arizona bankruptcy attorney said...

The U.S feds are spending so much money and most without a game plan or follow up.

Anonymous said...

I think this will be the end for Labour, myself. The only reason they got in last time was by managing to convince everyone that the Labour party had changed its spots and given up on socialism. I think there is a new understanding amongst sufficient of the electorate that the Labour party will NEVER change its spots. Then, within the Labour party itself, I think there will be a split along NuLabour/Brownite, NuLabour/Blairite, OldLabour/moderate, OldLabour/radical left lines that will keep it out of power for the foreseeable future.

It will be interesting to see what takes its place.

electro-kevin said...

Wot Mick said.

Another loss for the Conservatives will mean the destruction of both main parties ...

... exactly what Britain needs right now.