The real cost of servicing the UK’s National Debt


When David Cameron and others talk about paying down the deficit, do they really understand the scale of the fraud that is being perpetrated on the people of Britain, or the people of the world?

That is a rhetorical question. Hyde Housing Association is one of the UK’s leading social housing providers. It is fair to say that without it, tens of thousands of people would at best be living in third rate or worse accommodation, and others would be paying through their noses for rents. In an extract from its latest annual review published in Hyde Life, it gives a breakdown of its income: 10% was spent on housing management; 12% on housing maintenance; and a staggering 27% on interest charges.

Hyde is a big organisation, but nowhere near as big as the British Government. There is website devoted purely to the British national debt; according to UK Debt Bombshell:

“We owe £16,792 for every man, woman and child

...more than £36,880 for every person in employment

Every household will pay £1,927 this year, just to cover the interest”.

This website has some interesting facts (like the above) coupled with some flawed logic. While correctly identifying the major holders of this debt as insurance companies, pension funds, and financial institutions (domestic and foreign), it claims that we have to service this debt. But do we?

In 2010-11, the interest alone came to over £42 billion; Debt Bombshell says the government has to stop borrowing, spend less, and balance the budget. These are sensible suggestions for a housewife or businessman to follow, but not for a government.

In the first place, it is not true that governments have to borrow money they can’t raise by taxation. They can print money and coin it. All governments do this anyway, but of course simply printing money can’t be the solution because it would lose all its value. Printing it responsibly though is a different matter. The British Government and other European governments don’t do this because the European Central Bank won’t permit them.

There have been proposals in the past as well as present to solve the problem of the national debt, and to eliminate it altogether, but the governments of Britain, Europe and the world continue to stumble blindly on down the same path. What would happen if the government simply refused to pay the usurious interest on its debt? The banksters and their political frontmen would have us believe the sky would fall. But would it? Following the devastating earthquake in Haiti two and a half years ago, the International Monetary Fund cancelled the island nation’s external debt, just like that. The man behind this was Dominique Strauss-Kahn; this proves that even not all banksters are total scumbags (even those who can’t control their wandering hands). So who would actually lose if the British Government refused to pay any further interest on its gilts, and scrapped this system altogether?

The propaganda churned out by the vested interests is that pensioners would lose. But would they? Refusing to pay interest to pension funds would be a case of roundabouts and swings; pensioners would gain far more than they lost. The reason for this is that the interest on the national debt and the debt itself is serviced by taxation, and without this debt, taxation would all but disappear. This would have enormous consequences for prices.

Look at this table. * Imagine what would happen to fuel prices if all or even half of this ludicrous taxation were abolished overmight. Imagine what impact that would have on other prices. How is food transported to supermarkets? Precisely!

[The above op-ed was first published October 18, 2012. The table alluded to was archived through WebCite, which at the time of writing – January 2022 – isn’t available. At this distance I cannot remember the source I used but this desideratum doesn’t detract from the substance of the article.]

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