Does a trillion pounds of debt really matter?

Interesting BBC News article countering the common press belief that such a massive debt is a really bad thing. Essentially debt is fine as long as it’s managed; debt growth is the sign of a healthy economy (debt will naturally grow anyway with inflation), and bad debt accounts for such an infinitesimally small proportion that it’s hardly worthly of the stark headlines currently plastered on the front pages.

One small thing though, I wish they would at least acknowledge that 1,000,000,000,000 is a US trillion (it’s a UK billion – a UK trillion has twice as many 0s again).

4 thoughts on “Does a trillion pounds of debt really matter?”

  1. The UK definition of a billion (as far as I know) has always previously been 1 and 12 zeroes; the number you have there (in the UK) would be a thousand million.

    Alas, it seems this is being phased out in favour (or should I say favor :)) of the US definitions. The mainstream media seem to be using the Americanis(/z)ed version.

    It seems though that I made an error in the trillions: there are 18 zeroes in a UK trillion, not 24. The basis there, I guess, is that the number of zeroes is in multiples of six, not doubling each time – whoops!

  2. The whole concept of modern debt is misunderstood. On a broader level it’s not a problem.

    For example, consider the phenonmenon of ‘student debt’, where the debt is the money the student owes for his education. If his education had been financed out of taxes instead, the debt would simply have been owed by central government – and thus the taxpayer instead.

    The issue isn’t debt per se, but debt write-offs. If the debt remains, we’ll simply be chasing each other for the money for ever, which isn’t a problem.

    The problem arises when we lose track of the debt or are foolish enough to write it off – that’s when the money goes missing.

  3. Okay – it may be worth noting that if there is such a concept as “UK billion” it is probably more “Imperial billion” and is very very archaic. I’ve never seen any such use of billion or trillion in my entire life, ever!! 🙂

    The only use I’ve seen is the standard SI units, as per everything else.

    Btw, your input box for leaving comments doesn’t work properly. In FireFox at least, it stretches across the entire page but the second half of it is blank.

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