The silent watchdog

Yet another important post from that heroic toiler (an oxymoron for classical Greeks), "Tyler". He looks at the economic implications of our ageing population and demonstrates that public expenditure cannot continue as projected.

The long-serving Comptroller Generals, both in the USA and here the UK, have recently retired. The difference between them is that the American, David Walker, has spent two years on an increasingly well-publicised Cassandra mission to warn the public of future dire financial dislocation, because of unfunded liabilities such as medical care and pensions. I may be doing a disservice to Sir John Bourn, but I can't remember any media fuss about him going on such a tour here.

Looking at the website for the National Audit Office, I see that in the FAQs, the spelling of "comptroller" comes second, after a dry summary of the NAO's role. However, the "find" option on my Windows toolbar can find no occurrence of the following words in that web page:

disaster
bankruptcy
poverty
IMF
inflation

Some barking from its kennel would now be most welcome.

UK public debt twice as bad as America's

David Walker, the US Comptroller General, reckons the debts and unfunded liabilities of the USA amount to some $53 trillion, which assuming GDP of $13.75 trillion means a debt-to-GDP ratio of 3.85. Mr Walker, now retiring, has taken his "Fiscal Wake Up Tour" round America for two years, warning Cassandra-like of the woe to come if things don't change soon.

"Wat Tyler" of the redoubtable blog Burning Our Money reckons UK debts and unfunded liabilities to be some £9 trillion, which assuming GDP of $2.472 trillion (c. £1.26 trillion today) means a debt-to-GDP ratio of 7.16. Sir John Bourn (74) is the UK's equivalent of David Walker, and recently left office after a tenure of 20 years. A Google news search using the terms "Sir John Bourn", "debt" and "warning" yielded nothing today.

We worry about mortgages, but according to this site:

"Recent figures from the Council of Mortgage Lenders (CML) showed average first-time buyers borrowed 3.24 times their income - the highest level ever recorded...Many lenders will calculate a debt income ratio, which as a rule of thumb should not exceed 40%. " (i.e. 0.4; my highlights)