Jump to content
Join the Unexplained Mysteries community today! It's free and setting up an account only takes a moment.
- Sign In or Create Account -

Buck stops here as Britain finally clears


__Kratos__

Recommended Posts

UNCLE Sam is satisfied, for Britain has finally paid its due.

About £45.5 million was yesterday transferred from the Bank of England into an account at the US Treasury, the final payment on a multi-billion pound debt racked up during and after the Second World War.

Over a period of 56 years, Britain has repaid more than £3.5 billion to the United States, its closest ally.

The US provided warships and munitions as well as vital loans and crucial lines of credit, which allowed the country to rebuild its shattered economy during the post-war years.

According to figures released by the Treasury, Britain borrowed a total of $4.3 billion from the US and will have repaid a total of $7.1 billion at an interest rate of 2 per cent per year.

The annual payments, which have been made every New Year's Eve since 1950, except on six occasions when the nation was in financial strife, are the equivalent of each of Britain's 29 million taxpayers contributing £1.55 each.

A taxpayer working from the age of 18 to 65 during the post-war years will have contributed £72.85 to clearing the nation's war debt.

The debt was run up in two ways. When Britain stood alone in Europe against Nazi Germany, the prime minister, Winston Churchill, famously said to the US: "Give us the tools and we will finish the job." In public it was a bold statement of defiance, while in private, Churchill knew the only hope of victory was with US involvement.

The US was reluctant to enter the conflict, but agreed to the Lend-Lease agreement, in which it provided Britain with ships and munitions, often not in the best of condition, and asked only that Britain pay one-tenth of the production costs of the equipment, with money lent by the US.

Although the relationship changed when the US entered the war in December 1941, at its conclusion, it was agreed Britain would repay $586 million, the equivalent of £145 million at the 1945 exchange rate.

After the war, Britain was a financial ruin and the US also lent the government $3.75 billion. Repayments were agreed at a rate of 2 per cent in 50 instalments from 1950, but Britain was allowed to defer payment for a year depending on financial circumstances.

However, JM Keynes, the British economist, at the time believed the US was behaving badly. He said it should write off the money as a gift or at least make the loan interest-free.

Anne Moffat, the MP for East Lothian, who asked a parliamentary question about the loan after being pressed on the subject by an interested constituent, said she was surprised Britain was still paying the US 60 years after the end of the Second World War.

She said: "It seems to be a dark, well-kept secret."

There are those, however, who believe Britain got a good deal and was correct to continue to make payments over the decades instead of paying the loan off. Dr Tim Leunig, lecturer in economic history at the London School of Economics, said Britain would have been "a nutter" to pay the loan off early.

He said: "The Americans gave us an excellent deal in two senses. First of all 2 per cent has always been a very low rate of interest. Second, to lend to someone in wartime is very risky. We might have lost, then the US would have lost the lot. If we had applied to Barclaycard they would have rejected us as a bad risk. It was a genuinely good deal."

The final instalment - of £11.6 million - was also paid yesterday towards £600 million borrowed from Canada.

Last night, a Treasury spokesman said: "Britain always repays her debts."

Source

-------------------------------------------------------------

I found this interesting, mainly because I didn't even know Britain was repaying the US. :P Well good on the Brits for keeping their end of the deal. :tu:

Link to comment
Share on other sites

 
  • Replies 13
  • Created
  • Last Reply

Top Posters In This Topic

  • Lord Umbarger

    2

  • IronGhost

    2

  • NiCkC818

    2

  • Adam2006

    2

Top Posters In This Topic

I was aware of this -- it's a terrific story, and should serve as a lesson for all of us. It took the Brits 60 years to pay off this debt -- now the U.S. has nearly $9 trillion owed to foreigners, much of it to the Chinese. How long will it take to pay it off, and how much will it cost each American? It's something to ponder.

Link to comment
Share on other sites

funny how it always turns into an Anti-American thread.

How is it anti-american to state the truth about our financial problems?

Link to comment
Share on other sites

Thanks for the help back then. It wasn't just cash, it was lives as well.

But, what will we do with all that cash we aren't paying back? I've heard Tony's got his eye on a new conservatory, Cheries got hers on another Islington mansion, and Prezzers got a whole fleet of Jags being polished as we speak....Nu-labour snouts in the trough!

Link to comment
Share on other sites

How is it anti-american to state the truth about our financial problems?

This thread was about Britian's paying back of an old war debt, not America's debt with China.

Link to comment
Share on other sites

This thread was about Britian's paying back of an old war debt, not America's debt with China.

Okay, but if the discussion isn't allowed to leave the confines of the UK paying off it's wartime debt to the US then I guess the thread is pretty much dead after the first post. Unless you have something else to add?

Is it, US debt, really such a sore point that you don't want anyone to even discuss it?

Link to comment
Share on other sites

funny how it always turns into an Anti-American thread.

This comment is absolutely outrageous.

How is it anti-American to state the obvious? I supppose it's better to be all hush-hush about one of the most serious problems facing my country. The example of Britian paying off it's debt is a shining example of fiscal sanity and hard-nosed economic policy -- I'd like to see the U.S. emulate this kind of disciplined approach when it comes to national debt.

It's amazing how many people here thing they are "More-Patriotic-Than-Thou." They think a frank discussion of one's own shortcomings are automatically "anti-American." It's this kind of ostrich, "stick-out-heads-in-the-sand" mentality that has the USA headed toward a fiscal crisis of major proporations.

Link to comment
Share on other sites

It would be intersting to see how many countries are in debt to the UK due to all of the charity to Africa and India etc since their independance.

Its good that the UK have paid it off honestly and it hasn't been with the inclusion of back-handers etc.

Its not that much either at £1.55 a year for freedom (but not free from Political Correctness).

Link to comment
Share on other sites

It's this kind of ostrich, "stick-out-heads-in-the-sand"

Its off topic but hey....

In 70,000 cases of research into Ostriches, not 1 has put it's head into the sand...

Another useless fact from me :tu:

Link to comment
Share on other sites

I'm glad that they actually had the where-with-all to pay off the debt. A lot of other nations would have just staged a few "spontanious peoples protests" in the streets and never paid back a dime.

On the other hand, the U.S. might should have forgiven the debt seeing as how it's always Britain that backs us up. Every time since the coldwar on until today. You know, that's got to be worth something.

Link to comment
Share on other sites

Its off topic but hey....

In 70,000 cases of research into Ostriches, not 1 has put it's head into the sand...

Another useless fact from me :tu:

There is an large ostrich farm down the road and I often walk my dogs nearby and to date have not seen any with heads in the sand.

Link to comment
Share on other sites

 
funny how it always turns into an Anti-American thread.

How exacatly has this thread become anti-american.....?

Link to comment
Share on other sites

I was aware of this -- it's a terrific story, and should serve as a lesson for all of us. It took the Brits 60 years to pay off this debt -- now the U.S. has nearly $9 trillion owed to foreigners, much of it to the Chinese. How long will it take to pay it off, and how much will it cost each American? It's something to ponder
Not so much anti-American as much as "What are we doing to ourselves". In the 1980's there was a big hoopla over the fact that the U.S. owed something inthe neighborhood fof 2 trillion. Sure, it's gone down and it has gone up.

Part of the problem is the trade deficit. We buy more stuff from overseas than we sell to other nations. Toyotas and Mazdas are viewed by Americans as better cars than Ford and Chevy. We'd rather buy clothes from south east asian sweat shops than pay the extra money to buy American made. Part of it is our own fault here also. At one time "Made In America" was synonomous with "High Quality". Now, too often it means "Over Priced Junk".

A lot of this comes from our corporate board rooms where CEO's and their second in commands are drawing huge saleries for decisions that cost jobs. When they totally and utterly screw things up, they gets millions in severance pay. We've all heard them say that they are moving thier operations over seas because the payscale is lower than in America. Funny, their pay rate doesn't decreace to match!

The pay difference between line worker and CEO is often over 800%. That is just silly. If that kind of thing were reigned in, American companies could compete on the store shelves again and the Americans could still earn a living wage. Until then, you'll always pay more for something made here than something made there and shipped in.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.