The problem with borrowing ...

Hat tip to Chris Pearson (@CJpearson82) from Calderdale in Yorkshire, for posting the graphic below on Twitter this morning

 
 
He rightly described this as indicating Labour's economic policy: it also describes the end result of the policies of almost all those parties who describe themselves as being anti-austerity but are really running against fiscal responsibility.

Comments

Jim said…
"The problem with borrowing"

made even more simple

You have to pay it back, but not only do you have to pay back what you borrowed, you have to pay back more. This is called Interest.

this is not good. This means if you borrow a tenner, then you have to pay back £11, or you could pay back a quid a week if you want, but then you will have to pay a quid a week for 50 weeks - or payback a total of £50 which is not good for a tenner loan is it.

I'm not saying you should never go into debt, sometimes you have to. But for goodness sake, use it as a last resort, when you absolutely have to, and don't expect to profit from doing it.
6:35 pm
Chris Whiteside said…
Exactly the problem.
6:43 pm
Jim said…
at the minute if there is a "balanced budget" of which we are a long way short, but thats another story, but lets look at the so called "balanced budget"

so we have £100 coming in each week. we spend £60 on welfare and the NHS. we spend £15 on the milatary and the education of kiddies. we spend £5 on other bits and bobs, and we pay £20 on that £1000 jim lent us a while ago.

we keep doing this week on week and thats a balanced budget, but the question is asked "how much do we owe jim so we can clear this quarter of our income?" the answer of course is still, £1000.

I know says someone "lets borrow another £500" from jim so we can build a rail track, great. oh dear. now jim wants £30 each week and even if we do pay it we still owe him £1500...................

i know lets borrow another £5 from jim each year so we can keep paying for other bits and bobs!. Oh but the amount we pay jim each year seems to go up and we cant balance the budget anymore.
7:03 pm
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