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 Stirlingsays  26 Feb 21 9.20am |
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Originally posted by Rudi Hedman
His examples nicely fit his points, but in reality they aren’t true, right now. Economic growth more than 3.8%? Maybe for a short period like 2 to 4 quarters at an absolute push, but this debt is for a lifetime unfortunately for those paying for it. Yep, this is a can that is running out of road.....though I get it...no one wants to hear it. It's like Berlin before the Russians turned up, though unlike them we can deny it longer. Dan needs to smell that coffee. The important focus is in protecting the most vulnerable. Edited by Stirlingsays (26 Feb 2021 9.26am)
'Who are you and how did you get in here? I'm a locksmith. And, I'm a locksmith.' (Leslie Nielsen) |
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| Stirlingsays 26 Feb 21 9.23am |
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Originally posted by Badger11
Argentina has defaulted several times it makes foreign investment much harder and raising money more difficult, why would you loan money to a country that doesn't pay it back. Something for the SNP to mull about if they ever get independence and decide not to take their fair share of the UK national debt.
While I'm pro union, I'm all for it if they vote for it. Unlike the EU remainers who fought against democracy like cats in a sack.
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| DanH SW2 26 Feb 21 9.32am |
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Originally posted by Stirlingsays
This is missing the woods for the trees on a massive scale. These methods are viable within the context of normal deficits and are hardly anything new. This guy you link to seems a bit one track. He suggests that leaving the ERM was better for the UK economy.....sure it was longer term, but he ignores the massive short term cost of it. He also suggests Argentina defaulting was also better for their economy when it has resulted in massive interest on loans and defaulting carries with it several negatives even if you ignore the ethics of it. What's a 'normal deficit'? A deficit is a deficit. When you're in a situation where demand is extremely suppressed, the economy is weakened so tax receipts are lower, and interest rates are as low as they are locking in borrowing fixed to those negligible interest rates over a very long term is just sensible compared to the other levers available to raise funds. Also your comments on the ERM raised a smile. Isn't that what you're all telling us Brexit is supposed to do?
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| SW19 CPFC Addiscombe West 26 Feb 21 9.44am |
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Originally posted by DanH
Do some more reading around how governments fund spending and various levers available to them. It’s an area quite far removed from how most people think of spending as their only reference point is their own household spending and budgeting. This is really quite different. I am no fan of this government and their handling of the pandemic but what they are doing with borrowing is just sensible given the situation we are in. This is basically true. Understandably people always think about their own methods of spending and budgeting when the govt talks about debt, investment and deficits etc. It’s completely different due to MMT. It’s a fine line but essentially borrowing and deficits can be infinite providing inflation is kept in check. It’s not that simplistic but ultimately if you’re a sovereign country and subscribe to MMT you simply issue more money. Ad infinitum That’s why no one really appears to care about the US debt pile, for example. In an MMT world it’s irrelevant Now obviously that doesn’t mean it could become a problem, but only really if inflation runs away or we move away from the current financial system. Not because of the debt levels per se Edited by SW19 CPFC (26 Feb 2021 9.45am)
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| Stirlingsays 26 Feb 21 9.57am |
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Originally posted by DanH
What's a 'normal deficit'? A deficit is a deficit. When you're in a situation where demand is extremely suppressed, the economy is weakened so tax receipts are lower, and interest rates are as low as they are locking in borrowing fixed to those negligible interest rates over a very long term is just sensible compared to the other levers available to raise funds. Also your comments on the ERM raised a smile. Isn't that what you're all telling us Brexit is supposed to do?
However, you would only raise a smile over my comments on the ERM if you hadn't been reading my opinions on Brexit over years. The ERM was another foolish mistake made by pro EU Tories that cost the country tens of billions. Brexit wasn't about economics, however in what's to come it will shield us slightly better due to higher flexibility. It's relative. Edited by Stirlingsays (26 Feb 2021 10.01am)
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| Stirlingsays 26 Feb 21 10.00am |
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Originally posted by SW19 CPFC
This is basically true. Understandably people always think about their own methods of spending and budgeting when the govt talks about debt, investment and deficits etc. It’s completely different due to MMT. It’s a fine line but essentially borrowing and deficits can be infinite providing inflation is kept in check. It’s not that simplistic but ultimately if you’re a sovereign country and subscribe to MMT you simply issue more money. Ad infinitum That’s why no one really appears to care about the US debt pile, for example. In an MMT world it’s irrelevant Now obviously that doesn’t mean it could become a problem, but only really if inflation runs away or we move away from the current financial system. Not because of the debt levels per se Edited by SW19 CPFC (26 Feb 2021 9.45am) Inflation is just another form of devaluation. Are you not being unrealistic in thinking this can be kept in check?....it plainly can't as it operates in cycles and economies like these have no wiggle room once the global system falters as it did only a while back.
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| steeleye20 Online Croydon 26 Feb 21 10.21am |
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MMR the latest macroeconomic fantasy. Blow the odd 500 millions on Rish's burger and chips and seemingly never pay for it. Have a new railway it is only 4 billions a mile could be useful one day and we won't be paying for it. 40% of the natural world lost since 1992. 20% of the world's deaths in 2018 related to fossil fuels. This pandemic could prove to be like a cold before the flu.
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| Rudi Hedman Caterham 26 Feb 21 10.33am |
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Originally posted by steeleye20
MMR the latest macroeconomic fantasy. Blow the odd 500 millions on Rish's burger and chips and seemingly never pay for it. Have a new railway it is only 4 billions a mile could be useful one day and we won't be paying for it. 40% of the natural world lost since 1992. 20% of the world's deaths in 2018 related to fossil fuels. This pandemic could prove to be like a cold before the flu. They aren’t listening to the world starvation problems because of lockdowns. Lockdowns are cosy and relaxing.
COYP |
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| Stirlingsays 26 Feb 21 10.35am |
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Originally posted by steeleye20
MMR the latest macroeconomic fantasy. Blow the odd 500 millions on Rish's burger and chips and seemingly never pay for it. Have a new railway it is only 4 billions a mile could be useful one day and we won't be paying for it. 40% of the natural world lost since 1992. 20% of the world's deaths in 2018 related to fossil fuels. This pandemic could prove to be like a cold before the flu. It's certainly true that the future being moved towards is a net negative for the commoner, which is most of us. Technology is the only positive, well ok, it's also a double edged sword....Anyway no politician ever invented anything. Adam Smith, rather famously wrote back in 1776, 'people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public'. In his time that would have been at the localised national level and I regard it as a truism. However in the modern globalised world that translates to the internationalist elite class and how they want to shape the future. Edited by Stirlingsays (26 Feb 2021 10.37am)
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| DanH SW2 26 Feb 21 10.37am |
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Originally posted by Stirlingsays
However, you would only raise a smile over my comments on the ERM if you hadn't been reading my opinions on Brexit over years. The ERM was another foolish mistake made by pro EU Tories that cost the country tens of billions. Brexit wasn't about economics, however in what's to come it will shield us slightly better due to higher flexibility. It's relative. Edited by Stirlingsays (26 Feb 2021 10.01am) It wouldn't be depressing if you understood it properly. The best frame of reference I can try and give you is that it's depressing in the same way that mortgages are depressing. Yes you owe some someone else money but over a very long term and the repayments are very manageable and you have your house right away. If you did not have that mortgage you would be able to afford your house after 25 years but in the meantime you've been living in a tent.
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| Stirlingsays 26 Feb 21 10.43am |
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Originally posted by DanH
It wouldn't be depressing if you understood it properly. The best frame of reference I can try and give you is that it's depressing in the same way that mortgages are depressing. Yes you owe some someone else money but over a very long term and the repayments are very manageable and you have your house right away. If you did not have that mortgage you would be able to afford your house after 25 years but in the meantime you've been living in a tent.
I wager that if you'd been born in another era your views would also have been an identikit to that day's cultural zeitgeist as well. Anyway, as long as we are both here on the site for the remainer of the decade we get to find out who was right. Personally I don't think you'll stick around for my scorn. Edited by Stirlingsays (26 Feb 2021 10.43am)
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| Rudi Hedman Caterham 26 Feb 21 10.47am |
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Originally posted by DanH
It wouldn't be depressing if you understood it properly. The best frame of reference I can try and give you is that it's depressing in the same way that mortgages are depressing. Yes you owe some someone else money but over a very long term and the repayments are very manageable and you have your house right away. If you did not have that mortgage you would be able to afford your house after 25 years but in the meantime you've been living in a tent. 12 years or a bit more isn’t it? You even got that wrong. You keep talking like this new debt is the only debt. The only debt for about 50-80 years. Do you realise it isn’t and there will be more debt on top of it at interest rates you cannot predict? And this long term debt you’re talking about. What is the interest rate, because the longer the debt, the higher the interest rate.
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