The private sector often demands rates of return far greater than
public sector borrowing costs, especially in the current low interest rate environment.
The fall in the total
public sector borrowing requirement over the same period has been somewhat larger, reflecting significant consolidation by State governments, partly offset by smaller surpluses of public trading enterprises.
However, throughout the second half of the 20th Century, national debt and
public sector borrowing emerged as a structural problem in most developed economies, with large deficits being run year after year, as the role and «size» of the state has grown.
The Office for National Statistics said this morning that
public sector borrowing was down by over # 16 billion on last year, with tax receipts partly boosted by the increase in VAT to 20 %.
We need to reform
the public sector borrowing requirement to free councils to borrow money against their assets to build council houses (i.e use the EU definition of Public Sector Net Debt).
It also looks at balancing budgets and
the public sector borrowing requirement and public debt.