The recent looting in the UK’s major cities is a result of parts of UK society (to which I belong) having lost its grip on the real world. Not only the looters, but parts of a society which has a responsibility to provide leadership, guidance, wisdom, hope and a sense of right and wrong to the young : parents, teachers, religious leaders, police, judiciary, sociologists, local authority leaders, politicians, the government, the media, entertainers, artists, the literati and the intelligentsia.
The time honoured rules for a stable, prosperous society have been at least partly abandoned or ridiculed or adherred to only for fear of being caught out: honesty, loyalty, prudence, humility and restraint from extremes of greed or sensuality. It has happened countless times to societies throughout human history, and learning to adhere to them seems to be a painfully slow process, not helped in recent years, I maintain, by a denial of their divine origin.
But some bankers, financial service workers, economists and ordinary citizens have also been looting – plundering the economy in the belief they can get something for nothing.
A recent posting concerned the US debt mountain; but the UK is in even greater debt which does not seem to have registered with the media, possibly because it is small compared to the USA and the eurozone.
Although the UK government’s annual deficit is ‘only’ 10% of GDP (gross domestic product, the total money a nation spends on goods and services, serving as a measure of economic activty), compared with the US’s 12%, the British people have amassed a staggering amount of private debt per person by taking on excessively high mortgages from financial institutions which have in turn borrowed the money from foreign institutions.
Private UK citizens and the UK government together owe $144.3 k per person
to foreign creditors. UK citizens have been spending money on foreign goods and property with abandon and appear to be living in a fantasy world. Only Ireland has a higher foreign debt per capita: $505 k.
The corresponding total debt per person values for other countries are
USA $45.1 k, Germany $57.8 k , China $0.3 k, Greece $47.6 k Japan $19.1 k .
The average for the European Union is $27.9 k.
Greece’s total debt per capita is similar to the USA’s. Its anuual budget deficit (12% of GDP) and accumulated government deficit (100% of GDP) are also similar. But Greece is in trouble now because its economy is small, it has a low productivity, its GDP is falling fast, its currency is not a reserve currency (like the dollar) and it investors fear it will exit the eurozone, voluntarily or otherwise.
The UK is in trouble, and in the long term it could be in worse trouble, because its banks are unable to finance business expansion even with government rescue at tax payers’ expense and because the Bank of England is having to buy bonds with money it does not have (quantitative easing) to keep banks solvent, thereby risking inflation. With UK house owners in debt to banks which are in debt to foreign banks there is a huge burden of debt making it difficult to invest in new technology, new skills and a rejuvenated infrastrucuture.
Other countries are having economic problems, including China, and we are all interconnected, but when you lose contact with the real world it has a habit of catching up with you.
Peace cannot be founded on illusions. So let’s get real.
Author, 2077 AD