Posted: July 2nd, 2015

Brief discussion on national debt, why is it such an important topic? Why has the level of debt increased over the years since the 80’s

Executive Summary

Introduction

• Brief discussion on national debt, why is it such an important topic? Why has the level of debt increased over the years since the 80’s
• Discussion on what needs to be addressed:
• Banks create new money when people go into debt
• For every pound of money, there’s a pound of debt
• If we want more money in the economy, we have to go further into debt
• If we try to pay off debt, then money supply reduces
• Brief discussion mentioning how this report will look into the sustainability of UK National Debt in relation to UK GDP

Key Terms

• Provide definitions of key terms (National Debt and Fiscal Sustainability, Aggregate Demand and its components, GDP, Fiscal Policy etc.)

Background Information

• Overview of UK National Debt (what is it used on? what is the current level?)
• The need to borrow (How and why firms are funded by debt? – In order to repay debt, you issue more debt. What are the consequences of this? How and why countries are mostly funded by debt? For individuals too)
• How is sustainability measured? Eg. Debt/GDP ratio
• Time horizon (Data used from 2010 to 2015)

Aims and Objectives

• To investigate the sustainability of the UK National Debt
• To evaluate the impact of the key factors which contribute to UK National Debt

• These aims will be achieved through secondary research – looking at past and present data; as well as looking at future predictions
• Key factors include the UK government spending (G), business investment (I) consumption (C), Imports (M) and Exports (X)

Note: This research project is measuring sustainability by looking into the components of Aggregate Demand and their influence on National Debt

Literature Review

• Arguments for and against increases in National Debt
• Theories in favour and not in favour of National Debt
• Theories related to fiscal sustainability
• Look at the strengths and weaknesses of each and give our own perspective

Limitations, access and ethical issues

• The influence of the EU was not considered; anything else which is necessary should be included
• Any other access issues encountered

Research/Results

• Secondary research should be presented in graphs, tables and diagrams along with explanations
• Time frame from 2010 and forecasts should be included up to 2025; including forecasts for GDP
• Research should be done for each factor; then collated and analysed for aggregate demand and each
• This will help summarise in the conclusion
• Results for Debt/GDP ratio should be calculated or found through research for forecasts up to 2025 if possible
• For investment – relate to gearing levels and economic cycle
• Governments – Fiscal policy, show trend analysis, identify research of surpluses and needs, look at the key drivers of growth
• Individuals – levels of individual debt and abilities to repay
• Please highlight the impact of debt repayments at different levels of the economic cycle

Conclusion

• Review aims and objectives and answer the question based on results and literature review
• This should result into an overall rounded argument

Recommendations

• Example – Increase privatisation in order to reduce expenditure and gain capital from sale; therefore reduce National Debt
• Any suitable recommendations from conclusion for sustainable debt

References

• 50 references
• Harvard
• Alphabetical order

Bibliography

Appendix