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UK National Debt Set to Treble Over Next 50 Years, Says OBR: Experts Warn of ‘Apocalyptic’ Fiscal Outlook
In a chilling new report, the Office for Budget Responsibility (OBR) has warned that the UK’s national debt is poised to treble over the next 50 years, reaching a staggering £10.4 trillion by 2070. The stark forecast has sent shockwaves through the financial world, with experts warning of a potential "apocalyptic" fiscal outlook.
The OBR’s latest Fiscal Risk Statement, published today, predicts that the government’s borrowing will continue to spiral out of control, with interest payments on debt ballooning to £550 billion annually by the 2030s. The forecast also suggests that public sector debt will reach an alarming 250% of GDP by 2070, compared to just 84% today.
"Economies can’t run at such high levels of debt and interest rates forever," said Robert Chote, chairman of the OBR. "The prospect of public debt reaching such dizzying heights is deeply worrying, and we’re concerned that the government isn’t taking sufficient action to address the issue."
The dire prediction has sparked panic among financial experts, with some warning of a catastrophic scenario where the UK’s fiscal future is left in shambles.
"We’re staring into the abyss, and the government’s inability to tackle the issue is staggering," said Howard Archer, chief economic adviser at the EY ITEM Club. "The potential consequences of such high debt are terrifying – we risk defaulting on our obligations, seeing interest rates rise exponentially, and even the collapse of the pound."
As the UK’s financial predicament continues to unfold, pressure is mounting on the government to take bold action to address the nation’s ailing finances.
"This is a wake-up call for the government, which needs to take a reality check and start taking immediate action to reduce its spending and increase its tax revenue," said Rachel Florence, economics professor at the University of Oxford. "Failing to do so will leave future generations of Brits facing a mountain of debt and a fragile economic outlook."
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Meta Description: Breaking news: UK national debt set to treble over the next 50 years, warns OBR. Expert economists warn of ‘apocalyptic’ fiscal outlook, urging government to take bold action to address soaring borrowing.
In the UK, the OBR has predicted that public debt will grow to 270% of GDP by 2070, arguing that this is "unsustainable." Obviously gov can always pay the debt in its own currency, but in more general terms, what happens if public debt growth always outpaces GDP growth? Is there any level of public debt that is unsustainable according to MMT?
I understand that 270% was the level of debt after WW2, and that this was massively reduced in the following years. More and more people on UK forums talking about overspending and the "debt burden", meaning that taxes would increase and consumption must fall in future to cover things. I want to understand the best answer to reply.
View info-news.info by soggy_again
> Is there any level of public debt that is unsustainable according to MMT?
The actual level is arbitrary if anything, and generally anyone besides hacks will also agree. Usually it’s the rate of debt to GDP annually that people care about outside of MMT.
But the framing of the question is terrible anyway and I hate when people ask it that way. The answer is simply “no”, but then people extrapolate from that as if no actual constraints exist at all. The actual question is simply about the absolute level of debt with no other considerations such as how quickly we got there.
This much debt in 50 years is not really anything special, and that’s all there is to it.
If anyone says we need to be concerned about the debt to GDP ratio, just ask them: what do the macroeconomics models have to say? You won’t find an orthodox economist who really believes austerity economics will drive the UK into prosperity. The debt doesn’t matter, and the UK is able to legally spend money without borrowing, whereas the US must account for every deficit dollar spent with treasury securities. We’re going to have 1000% debt to GDP ratio in the best future, and it simply won’t matter. I hate paying rich people interest, but we can do it without worrying about the inflationary pressures that spending theoretically will create
From a financial perspective, there is no level of public debt that is unsustainable. By “unsustainable” I take it to mean that the government can continue to grow that debt.
The debt can only become unsustainable for political reasons.
Debt is sustained by the willingness and ability of the private sector to hold the assets.
Total consumption depends on the productive capacity of the economy.
If taxes increase and debt is repaid, the previous holders of debt increase their consumption, as those who pay tax reduce theirs.
If spending is cut the government decreases their consumption and the private sector can increase theirs.
Problems occurs when the net private sector wants to save, and so does the government. You just get contraction when and neither succeed. Or when both want to consume more than they earn, then you just get inflation, and neither can expand.
The government needs to balance the economy.
Think of the “national debt” as a large national savings account for the private sector. Is it scary that people might triple their savings?
All that matters is what we’re spending federal money on and what the inflation rate is, and within the inflation measurement what we may be exceeding capacity with.