Is there a simple answer? Borrowed public pay

Jamesyrp007

I asked a guy who knew quite a lot about taxation this question and got no reply..
The government has a deficit, and so borrows money to pay the public service. The money borrowed from europe or wherever is a loan and has to be serviced in the form of interest. I'm sure the interest alone is quite substantial.

The government includes the full cost of public pay and thus pays interest on the full amount. Why not borrow the amount less all the income tax and it would be cheaper for the government..?

The public service would receive income with tax not included?
I don't know a lot about tax but this seems simple..
If they are dependent on the money could they not try borrow separately

srsly78

This is just a cashflow issue and probably already taken into account. The government is not supposed to just leave piles of money sitting around, the dept of finance would always try to earn interest when possible.

Riskymove

The State is not borrowing for all of what it spends, just the difference between income and expenditure

paycosts for PS are counted in the expenditure and the tax PS pay is counted in income

so what you save in expenditure would be offset by reduced income and the deficit would remain the same

same amount of money needs to be borrowed