An historical perspective on Debt for UK and US governments

There has been a historical link between the British debt and the country’s GDP. By analyzing historical charts, experts establish that the key to keep the debt under control lies in the GDP growth.

Many people would recall the Napoleonic war in 1815 at Waterloo where UK succeeded over France but no one could comprehend that this war was a mark of debt in Britain which demanded for high income tax from the nation’s people.

The same situation was faced by US when they entered in war in 1917 and eventually came under heavy debts.

It has been put forward by the analysts that during the Second World War, the British debt reached to around 270% of GDP, which is even higher than the present debt of Japan.

Well in the 1970, the British debt was found to be stagnant, because the UK managed to deal with the deficit, as they were able to generate revenue from the North Sea oil.

Britain was in a long series of war with France which insisted them to borrow financial help from the international creditors, whereas France couldn’t because of its poor financial credibility.

The art of taking lots of debt and paying them back helped Britain to maintain its financial status and kept them away from any worries for long. But unfortunately, the current scenario seems to be worrisome for both the nations  and besides taking favors from the international creditors, they need to look for other practical means.

Post a comment