At £4.8 Trillion In Total Debt Including Unfunded Liabilities, UK Debt Is Six Times More Than The Official Number

Tyler Durden's picture

Everyone knows that the total US debt is over $120 trillion when accounting for such underfunded liabilities as Medicare and Social Security. Well, it appears that the bankrupt US welfare state is not alone. According to the UK's Institute of Economic Affairs (IEA), the country's national debt is £4.8 trillion once state and public sector pension liabilities are included, or £78,000 for every person in the UK. This number translates to about 330% of UK's GDP. Which of course is nothing compared to the total US adjusted debt-to-GDP number which when accounting for all off balance sheet items is roughly 10x the US GDP of $13.6 trillion, a number which is Rosenberg and Bridgewater are correct, may decline quite soon.

The Telegraph has more:

The IEA raised its concerns after the latest public finances data from the Office for National Statistics (ONS) this week, which showed that the total debt, excluding bank bail-outs, is £816bn – itself a record high. However, the figures strip out the state's pension liabilities in a contravention of standard accounting practices.

Mark Littlewood, the IEA's director-general, said: "The latest official national debt figure is seriously misleading. Looming in the background are pension liabilities. These should be moved to the forefront.

"The ONS should include these liabilities in their calculations. It is shocking enough to see official figures revealing a jump in national debt over the last year from the equivalent of 48pc of GDP to 56pc, but the grave reality is that our real national debt stands at 333pc of GDP."

Nick Silver, an IEA research fellow, said the full figure, including the £1.2 trillion public sector pension liability and £2.7 trillion state pension liability, should be published either monthly or annually alongside the net debt data for reasons of transparency.

The ONS has already begun to assemble the data, publishing the full list of Britain's debts and liabilities for the first time in July, which came to a total of between £3.68 trillion and £4.84 trillion.

The ONS numbers included a £1 trillion to £1.5 trillion liability for the Government's stakes in the part-nationalised banks, equivalent to the relevant portion of their total liabilities, £1.35 trillion for state pension liabilities, and £1.2 trillion for public sector pensions.

At this point these statistics are just that- there is no hope any of these will ever be paid down. And with government spending soon to focus ever more on such things as paying down interest, instead of investing in what could truly push the economy to a new level such as R&D spending and incubating basic research at scholar centers, the world will continue to dig itself into an ever greater Ponzi hole until the massive debt load is no longer sustainable.