National debt: who do we owe?

What is it about the ‘national debt’ that I am not getting?

Please forgive me for not being an economist but, when you owe loads of money, you can’t keep up with the repayments and you plunge deeper and deeper into the doo-doo, there comes a time when you go to your creditors and say:

‘Hey guys, however hard I try, I can’t pay you this money and, if we go on like this, I ain’t never going to repay it so lets work it out.’

Please forgive me for not being an economist but, back in the day, I was pleased to learn that some Third World countries did this and the banks who held the debt recognised the reality of the situation and wrote the money off. It was called ‘unpayable debt‘.

So who owns our national debt today? And at what point is it ‘unpayable’?

The UK national debt is £1.1trillion (Dec. 2012). It is ‘owned’, it says here, by banks and building societies (9.3%), insurance (23.1%), Bank of England (25.7%) and ‘overseas’ (30.7%).

Sorry, did I read that right? The Bank of England? You what? Our Bank of England? The Bank of England that we, the people, ‘own’? And what about the banks, building societies and insurance companies? Don’t we own them too?

Please forgive me for not being an economist, but are you really telling me that we are being punished because we can’t pay ourselves back money we already own? Huh?

Get this:

The American national debt, it says here, is $11trillion, of which the ‘overseas’ portion is ‘owned’ by China ($727bn), Japan ($629bn) UK ($157bn) Brazil $129bn) Russia ($116bn).

Did I read that right? America owes Britain $157billion. Great! Can we have it back please?

The only thing that seems clear about this whole situation is that it is confused, illogical and absurd – and, frankly, people who know better could do better.

It seems to be that the size of the global debt mountain is such that the human suffering of people around the world, from Cyprus to America, is so out of proportion to the size of the problem that a more innovative and creative solution is required.

So, for the last time, please forgive me for not being an economist, but can someone please stop and think about the lack of humanity in all this and, ideally, wipe the slate clean and start again with a zero balance?

At the very least, surely a worldwide financial readjustment could be achieved?

And, if nothing else, surely we are owed an explanation of who we owe all this money to and why whoever it is will not take a more humane approach to this problem?

More transparency, more creative thinking and more leadership please.

About Hugh Salmon

Business leader. Adman. Writer.
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