24 May 2012

The ultimate solution to the UK's National Debt Crisis

Following on from my post about fixing the Greek debt crisis, here are the numbers for the UK.

UK national debt currently stands at around £1,172 billion, that's £18,896 per citizen.

To generate that sum using fractional reserve banking, a bank would need to have 8.6967% of that sum, namely £100.1 billion.

So, suppose we set up a bank with a special "UK National Debt Cancellation" account. People could pay money into the account, and when the sum of £100.1 billion is reached, the account is frozen, the bank creates £1,172 billion out of thin air, lends the money to the UK government, and the entire national debt is paid off. The loan would have very favorable terms under which the government would have to pay the money back after 1000 years with 0.000% interest.

On average, each UK citizen would have to pay £1,643 into the account to activate the mechanism.

In 2011, UK taxpayers paid £48 billion in interest charges to the banking sector. It follows that the £100.1 billion needed to finance the scheme would be paid off in a little over 2 years.

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