Sunday, February 1, 2009

UK Government Debt Statistics

There is a rather confusing array of statistics for measuring Government debt. For the brave, I have written a lengthy post here: Understanding different debt statistics. The problem is that there are many different statistics which offer similar results.

Annual Government borrowing. is measured through:
  • PSNCR (used to be called PSBR),
  • Cumulative public sector current account, and
  • government deficit.
Total Government Debt is measured through:
  • Public sector net Debt
  • Public sector net Borrowing (similar to net debt, but with different accounting rules)
  • National debt. People often refer to public sector net debt as the National debt. However, the national debt is a statistic that is no longer produced. It used to focus on the gross liabilities of the National Loans Fund (whatever that was).
  • Government gross general borrowing (ignores net assets and government corporations) and is used on an EU wide scale.
  • Then on top of that the issue with public sector debt is the extent to which we include imputed debt like PFI and Bank liabilities from privatised banks
  • We have public sector debt with bank capitalisations included and we have public sector debt without banking liabilities.
  • We also have the issue of how much liabilities we should include from bank nationalisations and loan guarantees.
  • Then we have some people who think we should include future pension contributions in public sector liabilities.
  • Looking through the government statistics pages, I really found it quite confusing. Everywhere I looked they seemed to be using different terminology for government borrowing. I've spent 2-3 hours reading through this.
  • When I teach A Level economics my main concern is trying to prevent students get confused between government borrowing and the current account deficit.

Of course, US statistics are different as well.

O well, I'm sure this will make for a nice relaxing Sunday morning read!

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