Is Britain bankrupt or not? Does anybody know? Does anyone have a clue?

I’ve used this chart a few times on my blog to raise my concerns that were’s heading for a massive financial crash around 2015/2016 when our debt hits £1.6trn, Ed “borrow-borrow” Balls as chancellor proposes that the solution is to borrow even more money and when international lenders lose confidence and slam up the interest we have to pay on our national debt.

However, someone who is no doubt more knowledgeable than myself has pointed out that the above chart is not adjusted for inflation and when it is adjusted (see chart below) a different picture of our economic situation emerges:   http://coppolacomment.blogspot.co.uk/2013/01/the-end-of-britain-not-yet.html

The picture looks scary, but not quite as terrifying as the first chart. However, this picture only goes up to 2010. By the time we get to 2015, our debt will be £1.6trn. And that would make the above picture an awful lot more scary.

Then there is another picture that is possibly interesting. It’s total government spending as a % of GDP (adjusted for inflation). This shows that our government spending has been higher in the past – twice. But that was when we were fighting two World Wars.

But this chart too only goes to 2010. By 2015, the government will be spending more as a % of GDP than any peacetime government since 1900.

So are we bankrupt or not? Can we ever recover from owing £1.6trn and paying over £60bn a year in interest charges? And can we do it led by either Cameron/Osborne or Miliband/Balls? I wish I knew the answers. Actually, I suspect I already do and that’s why I’m trying to get all my savings out of sterling.