Letter: Bad debt dream

Robert Veitch claims that as a result of a nightmare he understands national debt better than the British government (Letters, 26 October).

Unfortunately, he is still dreaming if he thinks what he wrote is true.

He does not seem to realise the UK government still has to pay interest on this debt and pay back the capital to whomsoever owns it at the redemption dates. To suggest that if a foreigner buys the debt this somehow transfers the problem away from the UK is economic nonsense.

He also believes that national debt buys assets and is our national capital. On the basis of that sort of thinking Greece must be the richest country in the world.

He should be well aware that while capital expenditure is funded by national debt it is the ongoing funding of interest on this debt and welfare payments etc, which is why we are in this crisis.

Indeed, the mere funding of the interest payments on the national debt stands at 44 billion per annum, which is more than is spent on law and order or housing and the environment.

He suggests the growth of national debt reflects the growth of the UK asset base. This sort of reasoning is equivalent to a homeowner thinking that, if he has borrowed 100,000 and his house is worth 100,000 then he is worth 100,000, when he has in fact he has no net worth at all.

He asks the question "Are they all mad? Or is it me?" I think he has the answer.

Alan Black

Camus Avenue

Edinburgh