Paying off the national debt
Discussion
Remember it’s like a very long mortgage.
You invest in a massive scheme say a totally new motorway or whatever the benefit that will bring in is over future decades as it enhances ultimately the tax take.
Will we ever clear it? Only if we don’t invest in big projects and instead opt for rolling repairs.
You invest in a massive scheme say a totally new motorway or whatever the benefit that will bring in is over future decades as it enhances ultimately the tax take.
Will we ever clear it? Only if we don’t invest in big projects and instead opt for rolling repairs.
Welshbeef said:
Remember it’s like a very long mortgage.
You invest in a massive scheme say a totally new motorway or whatever the benefit that will bring in is over future decades as it enhances ultimately the tax take.
Will we ever clear it? Only if we don’t invest in big projects and instead opt for rolling repairs.
The majority of the debt is not due to infrastructure investment, it’s due to decades of overspending. That’s very different.You invest in a massive scheme say a totally new motorway or whatever the benefit that will bring in is over future decades as it enhances ultimately the tax take.
Will we ever clear it? Only if we don’t invest in big projects and instead opt for rolling repairs.
CzechItOut said:
We've had £375bn of QE over the last decade without a noticeable increase in inflation.
Therefore, why couldn't we do the same to pay off a chunk of the national debt and reduce the interest payments?
Which third party is going to rollover your debt if you have a systematic currency devaluation program running? Therefore, why couldn't we do the same to pay off a chunk of the national debt and reduce the interest payments?
The only reason QE didn’t trigger default was because everyone else was doing it in the West and the East needed the West to keep consuming.
Simpo Two said:
Imagine a country that's trading in the black. Wow.
I was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
All around you, everywhere you look. I was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
The issue with comparing the U.K. to Norway is that as there are only 8 people in Norway, 3 buildings and a road there isn’t much you need to spend money on.
The best analogy is the difference between a household winning the lottery versus the NHS staff pool winning. One group gets more money than it can ever possibly sanely spend whereas in the other they each get a chuppachup.
I’m quite sure we have pissed a lot of oil revenue up the wall but it’s not as bad as comparing Norway directly to the U.K. and thinking the difference is due to fiscal mismanagement.
Simpo Two said:
Imagine a country that's trading in the black. Wow.
I was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
https://www.nationaldebtclocks.org/debtclock/norwayI was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
No they are not instead they are 29% debt to GDP.
CzechItOut said:
DonkeyApple said:
Which third party is going to rollover your debt if you have a systematic currency devaluation program running?
Isn't the other side of that argument, who will lend us money if they have no chance of ever receiving their capital back?More seriously I do think this is actually a reasonable bet. Inflation, as we have seen in Japan, is resolutely low and creating GBP to take our own held debt from 33% to, say 50% seems to me to be fairly low stress, especially with Brexit as a decent excuse. I suspect the next Euro crisis will also provide cover.
I had a lot of discussions about it on FT Alphaville back in 2008/9 and no one could really come up with a decent reason why not.
Welshbeef said:
Simpo Two said:
Imagine a country that's trading in the black. Wow.
I was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
https://www.nationaldebtclocks.org/debtclock/norwayI was in Norway last year; apparently they invested some of their oil revenue in the markets and take a nice return each year.
And our North Sea oil profits are... where exactly?
No they are not instead they are 29% debt to GDP.
CzechItOut said:
We've had £375bn of QE over the last decade without a noticeable increase in inflation.
Therefore, why couldn't we do the same to pay off a chunk of the national debt and reduce the interest payments?
What would inflation have been without QE? Possibly negative?Therefore, why couldn't we do the same to pay off a chunk of the national debt and reduce the interest payments?
The thing about QE was that it was positioned as a temporary solution which would be unwound at a later date. When you strat printing money with no intention of unwinding this in the future, that’s an entirely different situation.
rossub said:
The interest on their debt is probably less than the returns they’re getting from the oil/gas investment fund - makes more sense to borrow than dig into their capital. I remember reading years ago that their fund was worth around £400bn. No idea what it is now.
But their tax rate is huge relative to ours Gassing Station | Finance | Top of Page | What's New | My Stuff