NeilW wrote:vand wrote:The problem today is that debt is growing faster than GDP. That's a night and day difference.
And yet Japan has a debt to GDP ratio of 263%, interest rates on the floor and next to no inflation.
Almost like it is a completely irrelevant ratio dreamt up by those who are hard of accounting.
There is never any problem servicing government debt. There is never any need to pay interest on debt. Because there really isn't any debt. If the people holding the debt (aka savings) don't like that then they can spend their savings, but only in the physical area that takes that denomination (the UK in the case of sterling). If they do that then that will generate *extra taxation* which when you do the really quite simple geometric series on the resulting transaction sequence will precisely match the size of the so-called debt. Debt being a store of taxation as well as value.
If the resulting spending boom is too much for the physical economy to handle at that point in time, then you simply put up taxation to reduce the number of transactions each spending chain can induce. Likely the automatic stabilisers will nip off the problem before you need to do that - if they are correctly designed.
It always amuses me that those people who whittle endlessly about national debt never seem to send their cash savings to the Commissioners for the Reduction of the National Debt, even though it is those savings that are causing it. (If you have a cash deposit, banks have the matching 'debt' as their balancing asset).
There should be a strict rule that anybody criticising national debt should be forced to provide receipts from CRND before they can speak on the subject. Put your money where your mouth is.
Well it HAS been a problem for some countries historically. The UK had to devalue the pound. France had to devalue the Franc. Germany, well we know what happened there.
Then there are those countries that had to replace their national currency. You know like Ecuador, El Salvador, Zimbabwe, The British Virgin Islands, The Turks and Caicos, Timor and Leste, Bonaire, Micronesia, Palau, Marshall Islands, and Panama. Some 65 others peg their currency to the dollar. That's simply the ones using the dollar. What of Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon who use the Central African Franc which is pegged to the Euro.
For any of them your statements are CLEARLY untrue.
Then there are the issues with individual government debt in the EuroZone. The Greek debt was the last I recall.
I do hope that I'm not telling you something you regard as new, it's only been happening over the last 8 centuries in at least 65 countries and over five continents.
This book may be of interest to many.
https://www.amazon.co.uk/This-Time-Diff ... 0691152640I would say that her [Carmen Reinhart's] book with Ken Rogoff on debt crises and financial crises is an extraordinary piece of work. -- eral Reserve Chairman Ben Bernanke, speaking before the House Budget Committee (6/9/2010)
[E]ssential reading . . . both for its originality and for the sobering patterns of financial behaviour it reveals. -- Economist
Regarding spending in the UK, you do know that we import a huge amount of our food. War time diet and dig for victory anyone? We are also a net importer of oil and gas. Gas which is used to generate electricity. Humm, did anyone notice price rises on those items?
As for people putting their money where their mouth is:
Didn't we already agree that this was not a bitcoin thread?
However since you raise the issue, you are wrong again. There ARE people who are doing so.
Here is the link that I previously posted, on this thread, to a panel of just such people. Talking to many others.
https://www.youtube.com/watch?v=QFqjw47biPMI didn't originally post it about saving or putting your money where your mouth is. But you did ask and it does apply.
I'm sure that someone else could provide examples of people saving in gold, it doesn't have to be bitcoin. The simple fact is that many disagree with you and chose to do so financially.