A rather sobering reminder of how much debt we owe

sensibleken

http://www.bbc.co.uk/news/business-15748696

Good news: Government debt is only 109% of GDP
Bad news: Foreign debt is 1093% of GDP

Bad news: We owe Britain 103 billion
Good news: They owe us 113 billion

Bad news: Per head we owe €390,969 each
Good news: they cant get it if I drink myself to death.

whatstherush

sensibleken wrote: »

http://www.bbc.co.uk/news/business-15748696

Good news: Government debt is only 109% of GDP
Bad news: Foreign debt is 1093% of GDP

Bad news: We owe Britain 103 billion
Good news: They owe us 113 billion

Bad news: Per head we owe €390,969 each
Good news: they cant get it if I drink myself to death.

Do those figures paint a correct picture though. Scoflaw always mentions that foreign banks in the IFSC add to our total foreign debt figure and IIRC Ireland has no liability for these debts. Also if you look at the 390k we owe per head it's nearly 4 times the nearest country (UK) in that graph and nearly 10 times avg so something doesn't add up IMO.

sensibleken

whatstherush wrote: »

Do those figures paint a correct picture though. Scoflaw always mentions that foreign banks in the IFSC add to our total foreign debt figure and IIRC Ireland has no liability for these debts. Also if you look at the 390k we owe per head it's nearly 4 times the nearest country (UK) in that graph and nearly 10 times avg so something doesn't add up IMO.

I only hope your right and someone proves it before the offey closes

_Kaiser_

whatstherush wrote: »

Do those figures paint a correct picture though. Scoflaw always mentions that foreign banks in the IFSC add to our total foreign debt figure and IIRC Ireland has no liability for these debts

"Ireland" isn't technically/legal liable for a lot of this stuff (recent unsecured bondholder payments for example?) yet we're still picking up the tab anyway thanks to our glorious leaders and their/our new German overlords

Sudsy86

Wish I was living in Japan...

Wonder if they would accept me moving over there, handing them my 15k and saying "any chance thats us setled and I won be taxed anymore"

Those figures for Ireland have to be wrong, according to that we owe more per person than portugal and SHOCK SHOCK Greece...

NIMAN

I was looking at those figures too, and if they are true, they are scary. Surely we cannot be that badly off? Or perhaps this is why all the experts are saying that its not a matter if we will default, but when.

Also, I cannot understand this logic at times. UK owes France money and France owes UK money. This is visible in a lot of country combinations. Why not just cancel them out?

andrew

Here's the data: Our external debt is 1,676,770 million. Of that, 95,078 million is general government debt (for which we're liable). 392,593 million of that belongs to monetary and financial institutions, and 795,788 million of that belongs to 'other institutions' like companies; the public is not liable for this debt. The monetary authority figure is for short term loans and deposits. These obligations are to the European System of Central Banks. I'm not really sure exactly what this is; central bank accounting conventions are weird (for example, banknotes in circulation are counted as a liability) but I don't think it's a figure for which the public are responsible.

eire4

Also, I cannot understand this logic at times. UK owes France money and France owes UK money. This is visible in a lot of country combinations. Why not just cancel them out?[/QUOTE]


I was wondering that too. So for example if Britain actually owes us more money then we owe them. Why not swap out the 103 billion and be done with that debt. Then instead of us both having big debts to each other now we owe them nothing and they only owe us 10 billion.

timothybryce

How much assets do we have in relation to our dept?

Godge

Sudsy86 wrote: »

Wish I was living in Japan...

Wonder if they would accept me moving over there, handing them my 15k and saying "any chance thats us setled and I won be taxed anymore"

Those figures for Ireland have to be wrong, according to that we owe more per person than portugal and SHOCK SHOCK Greece...

but let us say our income per head is twice the income per head in Greece.

If our debt per head was 10% greater than the debt per head in Greece, we would be much better off.

Sand

andrew wrote: »

Here's the data: Our external debt is 1,676,770 million. Of that, 95,078 million is general government debt (for which we're liable). 392,593 million of that belongs to monetary and financial institutions, and 795,788 million of that belongs to 'other institutions' like companies; the public is not liable for this debt.

There is debt the public isnt responsible for? You might want to run it past the ECB before making a bold statement like that.

Turner

It could be worse.... we could owe as much as greece.

https://www.youtube.com/watch?v=0-PdWxPvCHU

funnyname

That's gross debt, net figure is -€154.9bn. (as at end Q1 2011)

http://www.cso.ie/releasespublications/documents/economy/current/qiipexd.pdf

Interesting figures when you compare IFSC vs non-ISFC

Sand

Its commonly accepted that debt should be measured in gross terms. Valuations of "assets" tend to be subjective - bust and boom valuations etc.

Debt is permament.

andrew

funnyname wrote: »

That's gross debt, net figure is -€154.9bn. (as at end Q1 2011)

http://www.cso.ie/releasespublications/documents/economy/current/qiipexd.pdf

Interesting figures when you compare IFSC vs non-ISFC

The NIIP in that publication is assets held abroad versus assets held by foreigners here, AFAIK; I'd be pretty sure that it's not debt.

andrew

Sand wrote: »

Its commonly accepted that debt should be measured in gross terms. Valuations of "assets" tend to be subjective - bust and boom valuations etc.

Debt is permament.

Apart from the effects of inflation and deflation that is.

Tayla

NIMAN wrote: »

Also, I cannot understand this logic at times. UK owes France money and France owes UK money. This is visible in a lot of country combinations. Why not just cancel them out?

Does anyone know the answer to this?

ILikeBananas

Tayla wrote: »

Does anyone know the answer to this?

Those figures are a composite of public and private borrowings and are probably made up of hundreds of thousands of different individual debts between as many entities. It's not just government to government transfers.

D1stant

sensibleken wrote: »

http://www.bbc.co.uk/news/business-15748696

Bad news: Per head we owe €390,969 each
Good news: they cant get it if I drink myself to death.

Must be wrong. That would give something like 1.6 trillion in debt??

www.debtclock.ie reckons itrs more like 25k per person which is about 115Billion

skafish

Only 115 billion?

Peanuts:D

Scofflaw

Tayla wrote: »

Does anyone know the answer to this?

I'm afraid that the short answer is that you're looking at it the wrong way. In general countries do not owe each other money any more than Ireland as a country owes all the massive debt figures people are unhappily throwing around.

If a bank in Ireland owns €1bn of UK government debt, and a bank in the UK owns €1bn of Irish government debt, those will be recorded in the figures you're all referring to as "Ireland" and "the UK" owing "each other" €1bn. But you cannot simply set them off against each other as the little pictures suggest, because, to put it another way, the picture is that €2bn in government debt is owned by 2 private institutions.

And despite some rather stupid assertions made n this thread, the Irish public is very definitely not responsible for the full sum of Ireland's external debt. That external debt figure includes, for example, goods ordered from another country and not yet paid for. And the suggestion that one should ignore assets when looking at debt is, frankly, equally stupid.

cordially,
Scofflaw

Tayla

Thanks for that answer.

At the moment are there certain situations where debt could be cancelled out but they choose not to?

Scofflaw

Tayla wrote: »

Thanks for that answer.

At the moment are there certain situations where debt could be cancelled out but they choose not to?

There might be a few, but, again, while it looks simple, a "debt of €1bn" isn't just that - it has a maturity, a yield, possibly other conditions. So finding debts that could usefully be set off against each other would be a long slow process and require a level of disclosure not normally associated with banks at the best of times.

cordially,
Scofflaw

Sand

Scofflaw wrote: »

And despite some rather stupid assertions made n this thread, the Irish public is very definitely not responsible for the full sum of Ireland's external debt. That external debt figure includes, for example, goods ordered from another country and not yet paid for. And the suggestion that one should ignore assets when looking at debt is, frankly, equally stupid.

cordially,
Scofflaw

You should ring up the IMF (and Eurostat for that matter) and let them know then. Measuring debt excluding assets is the default position.

The definition of external debt remains based on the notion that if a resident has a current liability to a nonresident that requires payments of principal and/or interest in the future, this liability represents a future claim on the resources of the economy of the resident, and so is external debt of that economy. Such an approach provides a comprehensive measure of external debt that is consistent across the range of debt instruments regardless of how they may be structured. The focus of the definition remains on gross liabilities—that is, excluding any assets.

That view is neccessary, amongst other reasons, to stop desperate debtors/governments fixing a valuation of their assets that nets off neatly with their liabilities - such as the government has done with NAMA...

the groutch

eire4 wrote: »

Why not swap out the 103 billion and be done with that debt. Then instead of us both having big debts to each other now we owe them nothing and they only owe us 10 billion.

and then they can repay us the 10bn they owe us, so that we don't have to make any cuts in the budget :rolleyes:

Scofflaw

Sand wrote: »

You should ring up the IMF (and Eurostat for that matter) and let them know then. Measuring debt excluding assets is the default position.



That view is neccessary, amongst other reasons, to stop desperate debtors/governments fixing a valuation of their assets that nets off neatly with their liabilities - such as the government has done with NAMA...

And measuring sugar is done with a spoon, but that doesn't mean that a spoon is an appropriate measure for everything. Let me clarify a little for you - the suggestion that people in general should look at (and worry about) Ireland's external debts without considering that there's external assets as well remains a fatuous one.

regards,
Scofflaw

geuro

Turner wrote: »

It could be worse.... we could owe as much as greece.

https://www.youtube.com/watch?v=0-PdWxPvCHU

Here's one for the US!

http://usdebt.kleptocracy.us/

Godge

Scofflaw wrote: »

And measuring sugar is done with a spoon, but that doesn't mean that a spoon is an appropriate measure for everything. Let me clarify a little for you - the suggestion that people in general should look at (and worry about) Ireland's external debts without considering that there's external assets as well remains a fatuous one.

regards,
Scofflaw

Exactly, and the same with your own personal debts. If you have a debt of €10,000 and no income or assets, you are in trouble. But if you have a debt of €10,000, an income of €1,000 per year and assets worth €7,500, it becomes a matter of how you organise your assets and income stream to ensure that your debt is paid down in a reasonable time with as little interest as possible.

Sand

Scofflaw wrote: »

And measuring sugar is done with a spoon, but that doesn't mean that a spoon is an appropriate measure for everything. Let me clarify a little for you - the suggestion that people in general should look at (and worry about) Ireland's external debts without considering that there's external assets as well remains a fatuous one.

regards,
Scofflaw

Measuring debt is one thing.

Measuring the ability to repay debt is another.

They are not one and the same. Debt is commonly measured without reference to assets. You might have a different opinion, and thats a valid opinion. The IMF and Eurostat have an opinion too. Their opinion will tend to have more weight with investors.

And usually measuring the ability to repay debt is done against income: GDP and GNP - due to the difficulty with valuing and realising government assets. Very motivated interest groups tend to be intensely hostile to attempts to sell government assets. Look at Greece. Theoretically they have enough assets to meet their debt payments by just selling them...but they have to realise the theoretical value of those assets and the reality is they cant.

Do you think the Greeks can just net off the theoretical value of their assets against the debts? Probably not. Neither does the IMF, or anyone else when it comes to measuring debt.