Can we afford the bills?

[smifffymoto]

Germany being a prime example.
Just battered by floods,which will cost billions,the covid bill,the social care bills etc.
Do countries have enough of a tax take or will money be forever printed and cook the books?

[stichill99]

It will come home to roost one day,just nobody knows when!

[hotchy]

Inflation will cover it. Soon £1b will be the old £1m.

[hyphen]

stichill99 said:

It will come home to roost one day,just nobody knows when!

If every country is doing the same, which country is going to object?

[anonymous-user]

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

Exactly this, I am hoping inflation is going to erode a large percentage of my mortgages away.

[Shnozz]

Joey Deacon said:

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

Exactly this, I am hoping inflation is going to erode a large percentage of my mortgages away.

That is the thing though; inflation seems to be going nuts in the real world yet I know of no one whose earnings have dramatically increased in the last 2 - 3 years, if at all.

[Mr Whippy]

Joey Deacon said:

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

Exactly this, I am hoping inflation is going to erode a large percentage of my mortgages away.

To get this you need vast economic growth though.

People can't own five cars, and three houses, and whatever, and then another 30 years down the line, have 10 kids, all with ten cars and 10 houses.

We're now seeing a Western World that is saying "stop" to never ending expansion and growth, so how does that work with the inflation model?

Deflation will be the resultant outcome of the "stop" strategy.

Yes stuff might cost twice as much, and you get paid twice as much, but interest rates might be twice as much, and half the time you might not have a job... so it could be a lot worse.

[Ari]

Shnozz said:

Joey Deacon said:

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

Exactly this, I am hoping inflation is going to erode a large percentage of my mortgages away.

That is the thing though; inflation seems to be going nuts in the real world yet I know of no one whose earnings have dramatically increased in the last 2 - 3 years, if at all.

Which answers the original question, who's paying? Everyone - everyone is paying more for everything without earning commensurately more.

[Mr Whippy]

Ari said:

Which answers the original question, who's paying? Everyone - everyone is paying more for everything without earning commensurately more.

And that is deflationary.

[covmutley]

Shnozz said:

That is the thing though; inflation seems to be going nuts in the real world yet I know of no one whose earnings have dramatically increased in the last 2 - 3 years, if at all.

More like the last decade!

[TwigtheWonderkid]

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

When I was in Argentina in 2018, there was a day long general strike. The govt workers had been offered a 10,000% increase but they were hanging out for 18,000% to keep up with inflation

[aparna]

Countries that can print their own money, can by definition afford to pay these kind of one off bills. Inflation is not a certainty.

It's the countries that can't print their own money, that will find it difficult.

[Throttle Body]

Here is how I see it.

The first thing to realise is that it is not about paying national debts off. That will never happen because the sums involved are just too big, and no sooner has a country made some headway than a new Government gets elected which borrows more.

The second thing is that taxes only need to go up to give the illusion that a Government is acting prudently. They don't actually need to go up at all.

The third thing is that there there are 2 main sources of money besides taxation: government borrowing, and the magic money tree of QE. Government borrowing is very cheap, so long as interest rates don't increase, and then it becomes crippling. QE is very easy because a Government can create an awful lot of money... until inflation takes off. But because the economy is basically deflationary (technology drives the cost of almost everything down; demographics is resulting in lots of people retiring, and therefore spending less), QE can go on for a long time before that moment of reckoning, and that moment of reckoning will be worse the longer it is delayed.

But there is no alternative to all this madness. Enjoy it while it lasts.

[vulture1]

Ari said:

Shnozz said:

Joey Deacon said:

hotchy said:

Inflation will cover it. Soon £1b will be the old £1m.

Exactly this, I am hoping inflation is going to erode a large percentage of my mortgages away.

That is the thing though; inflation seems to be going nuts in the real world yet I know of no one whose earnings have dramatically increased in the last 2 - 3 years, if at all.

Which answers the original question, who's paying? Everyone - everyone is paying more for everything without earning commensurately more.

We are being made poorer. Instead of loads of cheap holiday deals your flight costs 30% more. As does tour hotel abroad and the food. The rich don't feel it as those sorts of increases are nothing to them. Much like a Mars bar as a kid to you was a good chunk of your pocket money. Now a Mars.bar can be 75p or £1 doesn't matter to me if I want one I'll buy it at either price