Government Debt, QE and printing money.
Discussion
ATG said:
ToastMan76 said:
Didnt Brown also sell off all our gold at the bottom of the market around ‘99 which would show in this graph?
Why would it show on the graph? He took an asset of the BoE and converted it into another asset still owned by the BoE. That doesn't create debt.Government debt isn't like your personal debt. Countries don't have a 45 year working life. If we control our currency we can create new money.
This obsession with national debt leads to governments cutting back at points where the economy needs stimulus. It's partly to blame for real wage and productivity stagnation in the UK since about 2010.
This obsession with national debt leads to governments cutting back at points where the economy needs stimulus. It's partly to blame for real wage and productivity stagnation in the UK since about 2010.
nd0000 said:
Government debt isn't like your personal debt. Countries don't have a 45 year working life. If we control our currency we can create new money.
This obsession with national debt leads to governments cutting back at points where the economy needs stimulus. It's partly to blame for real wage and productivity stagnation in the UK since about 2010.
Who are the interest payments to then?This obsession with national debt leads to governments cutting back at points where the economy needs stimulus. It's partly to blame for real wage and productivity stagnation in the UK since about 2010.
Out of the 2.2 trillion debt, yes I think most understand it is not a wonga loan, but I think 500+ billion are loans to other countries/institutes etc that owe interest due.
100 billion to me is a lot, just to spend servicing a debt, least not even trying to pay it off, which it seems the government does by trying to increase economic growth, but look at the world state, that isn't happening soon.
Yes I hear you but it seems the economy needs stimulus every year??! Surely we need to move to a more sustainable economy?
That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
We have a strange situation where the main indicator of recession, unemployment, is actually very low and finding a job at the moment is very easy and wages are increasing at their fastest rate since the 90s IIRC.
We also have a very low interest rate but a very high rate of inflation. The wage / inflation spiral has begun.
Their solution of printing money worked in the GFC in 08 because in reality it was just a blip and the world recovered quite quickly.
I think we are looking at 2-3 years of very much uncertain times. Then a recovery.
This could all be over by Christmas but honestly I cant see how it will be just due to the sums involved and the fact most countries in the world turned off their economies for the best part of a year.
The Fed are starting to roll out QT policy which is something thats never been done. Ever.
There is nothing to compare this situation with because we have never been here before.
We also have a very low interest rate but a very high rate of inflation. The wage / inflation spiral has begun.
Their solution of printing money worked in the GFC in 08 because in reality it was just a blip and the world recovered quite quickly.
I think we are looking at 2-3 years of very much uncertain times. Then a recovery.
This could all be over by Christmas but honestly I cant see how it will be just due to the sums involved and the fact most countries in the world turned off their economies for the best part of a year.
The Fed are starting to roll out QT policy which is something thats never been done. Ever.
There is nothing to compare this situation with because we have never been here before.
Mr Whippy said:
BoRED S2upid said:
Welshbeef said:
Cost of covid by country
UK £412b
France £490b
Italy £750b
Germany £1.2T
Say no more.
I’d like to see America and China on there. Never find Chinas it would be staggering they basically shut down everything for 2 years and are still terrified of it. UK £412b
France £490b
Italy £750b
Germany £1.2T
Say no more.
The CCP isn’t stupid and they must know it’ll keep coming back in, time and again.
It seems more likely they’re doing lockdowns for some other reason.
Keeping the population subservient and dependent?
Economic cold-warfare with those who are dependent on their exports?
What we know is there has been :
- huge public borrowing
- a huge loss of output and effectively a re-basing of output (i.e. will be lower than would otherwise have been the case going forward)
- not just growth from a lower base, but a lower rate of growth than would otherwise have been the case, given the disruption to the supply and demand we are seeing work through now
I think the figures quoted above refer to a narrow estimate of the cost.
One thing is for sure: never before have we incurred such a huge cost for so few.
CrgT16 said:
Yes I hear you but it seems the economy needs stimulus every year??! Surely we need to move to a more sustainable economy?
That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
Spot on. Some call it 'austerity', I call it 'living within your means'. That concept upsets some people. So yes, the current comfy position of free money appears unsustainable and people will have to get used to being more self sufficient. Perhaps it's because 90% of every news program is politics - government this, government that - that people have come to expect the government to fix everything. They can't. And of course whilst it's easy to give stuff away, taking it back will cause riots. The other factor is the efficiency of the nation as a whole, which I suspect is dire.That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
I see a country as a business, and that business should make a profit, or at least be in the black. But I think that went with the gold standard.
gotoPzero said:
We have a strange situation where the main indicator of recession, unemployment, is actually very low and finding a job at the moment is very easy and wages are increasing at their fastest rate since the 90s IIRC.
We also have a very low interest rate but a very high rate of inflation. The wage / inflation spiral has begun.
Their solution of printing money worked in the GFC in 08 because in reality it was just a blip and the world recovered quite quickly.
I think we are looking at 2-3 years of very much uncertain times. Then a recovery.
This could all be over by Christmas but honestly I cant see how it will be just due to the sums involved and the fact most countries in the world turned off their economies for the best part of a year.
The Fed are starting to roll out QT policy which is something thats never been done. Ever.
There is nothing to compare this situation with because we have never been here before.
Listening to the head of the UK defence and then NATO and seeing how Russia are now actually beating Ukraine comfortably & the open threats to many European countries from Russia …… I think we may well be in trouble (however we want to define that) for a very very long time to come. We also have a very low interest rate but a very high rate of inflation. The wage / inflation spiral has begun.
Their solution of printing money worked in the GFC in 08 because in reality it was just a blip and the world recovered quite quickly.
I think we are looking at 2-3 years of very much uncertain times. Then a recovery.
This could all be over by Christmas but honestly I cant see how it will be just due to the sums involved and the fact most countries in the world turned off their economies for the best part of a year.
The Fed are starting to roll out QT policy which is something thats never been done. Ever.
There is nothing to compare this situation with because we have never been here before.
Simpo Two said:
CrgT16 said:
Yes I hear you but it seems the economy needs stimulus every year??! Surely we need to move to a more sustainable economy?
That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
Spot on. Some call it 'austerity', I call it 'living within your means'. That concept upsets some people. So yes, the current comfy position of free money appears unsustainable and people will have to get used to being more self sufficient. Perhaps it's because 90% of every news program is politics - government this, government that - that people have come to expect the government to fix everything. They can't. And of course whilst it's easy to give stuff away, taking it back will cause riots. The other factor is the efficiency of the nation as a whole, which I suspect is dire.That may start by making government spending more accountable and second making the population realise that some of the “rights” from the last 40 years are not sustainable and pair down their expectations.
Even on a well run Government we couldn’t afford what we are presently giving the population for free. It will never happen but the public needs to come to terms that a lot of “free for alls” we presently have, although very nice, it’s just not sustainable.
I see a country as a business, and that business should make a profit, or at least be in the black. But I think that went with the gold standard.
Your other points are pretty nonsensical. The reason we're in trouble right now is because GDP growth stalled post-GFC, in large part directly because of Govt policies. A literal spanner was put in the works.
Now, if we'd let the banks fold and house prices crash, that would be find. But we didn't. We borrowed in order to pay for those things, on the basis the economy would rebound - and then we turned off the investment needed to help the economy rebound (but kept on funding things like help-to-buy to keep the asset bubble inflated).
This is the British way. It was the same after WW2, when we spaffed our Marshall Aid up the wall rather than investing it - if we'd used it properly, we'd be *the* economic powerhouse of Europe.
We need to fix the culture.
Welshbeef said:
Listening to the head of the UK defence and then NATO and seeing how Russia are now actually beating Ukraine comfortably & the open threats to many European countries from Russia …… I think we may well be in trouble (however we want to define that) for a very very long time to come.
The only +ve on the Russia front is the have lost quite a lot of their top generals and a lot of troops.I think it will take them several years to recover. By which time NATO will be surrounding all of RU as there will be new joiners in the next 1-2 years. Then its a case of a giant game of dare!
I dont think Russia would be stupid enough to try but by then they will probably have joined Belarus and Ukraine back into Russia and thats a lot of good valuable land and resources which I think will be (just about) enough for them to settle with and then try and rebuild relations with the west before they run out of money.
Abdul Abulbul Amir said:
ATG said:
ToastMan76 said:
Didnt Brown also sell off all our gold at the bottom of the market around ‘99 which would show in this graph?
Why would it show on the graph? He took an asset of the BoE and converted it into another asset still owned by the BoE. That doesn't create debt.ATG said:
Abdul Abulbul Amir said:
ATG said:
ToastMan76 said:
Didnt Brown also sell off all our gold at the bottom of the market around ‘99 which would show in this graph?
Why would it show on the graph? He took an asset of the BoE and converted it into another asset still owned by the BoE. That doesn't create debt.Ouroboros said:
I watched a benefits program from a few years back they got paid more than me working 40 hours a week.
There are a lot of people that won't work, that could. That would be a start.
Have you run the numbers recently? There are benefits calculators online that will tell you what you can get, and how / why.There are a lot of people that won't work, that could. That would be a start.
gotoPzero said:
The only +ve on the Russia front is the have lost quite a lot of their top generals and a lot of troops.
I think it will take them several years to recover. By which time NATO will be surrounding all of RU as there will be new joiners in the next 1-2 years. Then its a case of a giant game of dare!
I dont think Russia would be stupid enough to try but by then they will probably have joined Belarus and Ukraine back into Russia and thats a lot of good valuable land and resources which I think will be (just about) enough for them to settle with and then try and rebuild relations with the west before they run out of money.
Russia produces vast amounts of wheat so adding in Ukraine to their resources they hold such might in the world. I think it will take them several years to recover. By which time NATO will be surrounding all of RU as there will be new joiners in the next 1-2 years. Then its a case of a giant game of dare!
I dont think Russia would be stupid enough to try but by then they will probably have joined Belarus and Ukraine back into Russia and thats a lot of good valuable land and resources which I think will be (just about) enough for them to settle with and then try and rebuild relations with the west before they run out of money.
Oil fields too.
It also means clearly the refugees who have left and continue to leave will be permanent in their new countries.
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