Why Does the UK Borrow SO MUCH Money?
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- Опубліковано 29 сер 2024
- Hey everyone! Ever wondered why your government borrows money and what it means for your wallet? In today's video, we dive into the fascinating world of government finance! 📊💸
Our government often finds itself in a tight spot, just like that friend who loves to buy everything but never has enough cash. When the tax money isn’t enough, they borrow-meaning they have to pay back with fancy interest! 💳💵
Here's the deal: The government collects most of its money from taxes, which we diligently pay from our hard-earned salaries. But sometimes, they spend more than they collect, leading to tough choices: increase taxes, cut spending, or borrow more!
When dealing with £1 trillion a year, smart money management is key. Raising taxes means we have less to spend, and businesses might earn less profit. Less profit means less tax money for the government. It's a never-ending money cycle! 🌀💸
But why does the government borrow? To impact our economy positively with projects like new railways, roads, and hospitals. These expenditures can grow the economy, even if it means taking loans.
Next time you hear about government spending and taxes, remember it's all a big financial dance! 💃🕺
✨ *Topics Covered:*
- Government borrowing explained
- Taxes and their role
- The never-ending money cycle
- Economic impact of government spending
🔔 Don’t forget to LIKE, SHARE, and SUBSCRIBE for more insights into the world of finance!
#Finance101 #GovernmentSpending #EconomyExplained #MoneyManagement #Taxes #PublicDebt #FinancialEducation**
Let’s get savvy with our money! 🚀
Make sure to watch till the end and leave your thoughts in the comments below. I’d love to hear what you think about the government’s financial dance! 😄👂
🌟 Thank you for supporting the channel! 🌟
Really appreciate the straightforward explanation without jargon.
Thanks for watching. Really appreciate your comment
This is just a simplistic explanation mate. The comment about chocolate, do you really want me to come back to you on that champ🖕
I'm still learning myself. If it's too simple then I totally understand you going to a more educated creator. Thanks for the feedback.
It's wasted on fin mums.
Hi Critithinks (catchy name), Where does the money come from? If the government can only get it via taxation or borrowing, who and where is the original source?
If we paid off all the debt, there would be no money and, therefore, no economy. Who lends the money, and where do they get it from?
If, as the Bank of England report Q1 2014 says, money is created out of nothing by banks via government decree and private loans (us), then indeed, what you are talking about is not debt; it's just money in the economy. The bond market is just a gold standard relic that banks make too much money out of to be challenged in law. After all, when the banks didn't want to lend in 2008, the government directly created £700 million as a reserve (QE); like all of the 'debt', the creator cannot be in debt to itself. (ref; BOE report Q1 2014)
I'm not having a troll-like dig here; life is too short, and the next generation is too important for silly games.
The economy differs from a household, as a household cannot legally create (print/keystroke) money. (ref; BOE report Q1 2014)
The issue is the balance of money in the economy. Too much money compared with products leads to product inflation, and too little expensive money means products become too expensive to make, leading to stagflation and eventual economic depression unless the government creates money as an intervention.
I've been studying this for years as part of my research into the unaffordability of housing to find long-term solutions for the under-40s and those in their latter years who do not have such an asset for their later years (i.e. Asset Welfarism).
Wrote an article, short and sweet, on my blog to answer some of your questions that have no doubt arisen from my comment.
A good subject to get your head around, as it answers the classic, 'How are you going to pay for it', gotcha.
housingresearch.solutions/2024/05/27/managing-finite-resources-unveiling-the-truth-about-money/
Thanks very much for your comment. I will Definitely be doing more research on the subject!