The Commons Bar Mk IX - MHoC Chat Thread Watch

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Jammy Duel
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#5421
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#5421
(Original post by Aph)
Well TBF we can't pay off our debts anyway, there is 4 times more money then debt in the world and the same is true for the UK. We have about £410bn in circulation but we have £1.5tn in debt... We can't pay it all off unless we just invent the money, 90% of all money exists on paper but not in practice in the UK.
It's the flow of money that matters, not the absolute amount.

Let's keep a very simple system. You owe me £20, Rakas works for me, and he in turn gives money to you, either out of the goodness of his heart or for some sort of service or whatever. Now, in this little 3 way economy there is only £5 in circulation, so the 4x you describe. Does this mean you can't pay your debts? Not at all. Suppose you start with that £5, you give it to me to pay off £5 of your debt, I then pay Rakas that £5, I'm not quite a slave driver, and then it comes back to you for whatever the reason is. Now, we start all over again. There is only £5 in circulation and yet you were still able to pay off your £20 debt.

Obviously that was a very simplistic model but it demonstrates the point.
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Aph
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#5422
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#5422
(Original post by Jammy Duel)
It's the flow of money that matters, not the absolute amount.

Let's keep a very simple system. You owe me £20, Rakas works for me, and he in turn gives money to you, either out of the goodness of his heart or for some sort of service or whatever. Now, in this little 3 way economy there is only £5 in circulation, so the 4x you describe. Does this mean you can't pay your debts? Not at all. Suppose you start with that £5, you give it to me to pay off £5 of your debt, I then pay Rakas that £5, I'm not quite a slave driver, and then it comes back to you for whatever the reason is. Now, we start all over again. There is only £5 in circulation and yet you were still able to pay off your £20 debt.

Obviously that was a very simplistic model but it demonstrates the point.
That, however ignores the tendency for coney to accumulate at the top.
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username1524603
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#5423
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#5423
(Original post by Aph)
Well TBF we can't pay off our debts anyway, there is 4 times more money then debt in the world and the same is true for the UK. We have about £410bn in circulation but we have £1.5tn in debt... We can't pay it all off unless we just invent the money, 90% of all money exists on paper but not in practice in the UK.
I encourage you to read up about money before making baseless comments like these as the M4 broad money supply in the United Kingdom is £2.367trn. The whole more debt than money claim is also a bit false as the debt is owed to central banks who bought debt bonds from the government. It also does not matter if debt cannot be repaid provided the interest payments and servicing payments on the debt do not exceed other things in the economy like tax revenue.
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Tanqueray91
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#5424
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#5424
Well, about time the beeb covered this
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Jammy Duel
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#5425
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#5425
(Original post by Aph)
That, however ignores the tendency for coney to accumulate at the top.
That is largely irrelevant, okay make it that I keep 10% each time, as does Rakas. When you finally have enough to pay off your debt entirely he only gave you about £1.40 (I didn't keep track of how much we have) but regardless it still gets paid off, even if it takes longer. And don't bother being pedantic and calling in interest, all that does is further complicate the system with trivialities that are irrelevant to the point being demonstrated

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Aph
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#5426
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#5426
(Original post by Nigel Farage MEP)
I encourage you to read up about money before making baseless comments like these as the M4 broad money supply in the United Kingdom is £2.367trn. The whole more debt than money claim is also a bit false as the debt is owed to central banks who bought debt bonds from the government. It also does not matter if debt cannot be repaid provided the interest payments and servicing payments on the debt do not exceed other things in the economy like tax revenue.
What??? There is £410bn in circulation, that's a fact... And there is about £250tn of debt in the world and only £60tn in circulation so it's true....
And it does, if we can never pay it off we are left paying debt we never took out. That is why we write off debt when someone dies.
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Aph
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#5427
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#5427
(Original post by Jammy Duel)
That is largely irrelevant, okay make it that I keep 10% each time, as does Rakas. When you finally have enough to pay off your debt entirely he only gave you about £1.40 (I didn't keep track of how much we have) but regardless it still gets paid off, even if it takes longer. And don't bother being pedantic and calling in interest, all that does is further complicate the system with trivialities that are irrelevant to the point being demonstrated

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Ok so you then say I can't use an obvious flaw against you...

i still ill belive a global debt wipe would be best for everyone.
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Jammy Duel
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#5428
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#5428
(Original post by Aph)
Ok so you then say I can't use an obvious flaw against you...

i still ill belive a global debt wipe would be best for everyone.
It isn't though, I just cannot be arsed keeping up another argument where you will get more and more pedantic to try to make the model collapse because you can't accept your initial position was wrong. (And I need to get some work done)
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Aph
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#5429
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#5429
(Original post by Jammy Duel)
It isn't though, I just cannot be arsed keeping up another argument where you will get more and more pedantic to try to make the model collapse because you can't accept your initial position was wrong. (And I need to get some work done)
If the model is simplistic then it's not accurate....
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username1524603
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#5430
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#5430
(Original post by Aph)
What??? There is £410bn in circulation, that's a fact... And there is about £250tn of debt in the world and only £60tn in circulation so it's true....
And it does, if we can never pay it off we are left paying debt we never took out. That is why we write off debt when someone dies.
No there is more than £410bn in circulation in Britain. You are only looking at M1 suppy when you should be looking at M4, or you could be talking about physical money which was larger than £410bn last time I checked.

You need to read up on government debt as it is not like debt individuals have which they must repay back. Government debt is different in that the growth of debt needs to be less than the growth in tax revenue otherwise a debt crisis strikes. If the growth in tax revenue is higher the interest can always be repaid and the debt rolled over indefinitely unlike private debt where it must be repaid within a set time. Secondly, where private debt is money owed by one individual to another, government debt is largely debt owed to ourselves. Following WWII British debt was 255% of GDP but government debt has now dropped to under 100% as the GDP has grown. The debt was not paid off, it was rolled over by continually meeting the interest payments. If there is a strong government in a country who raises taxes when times call for it, and slashes spending to control the debt growth, a country can continue to grow while still having a large debt.
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Jammy Duel
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#5431
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#5431
(Original post by Aph)
If the model is simplistic then it's not accurate....
Do you know anything about modeling...
You make it no more complicated than is needed
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Rakas21
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#5432
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#5432
(Original post by Aph)
What??? There is £410bn in circulation, that's a fact... And there is about £250tn of debt in the world and only £60tn in circulation so it's true....
And it does, if we can never pay it off we are left paying debt we never took out. That is why we write off debt when someone dies.
Your talking about different types of debt though.

The UK debt to GDP totals 900% however the government is dealing with the fiscal deficit so that sorts out 100% of it almost. Household debt and business debt accounts for about 300% but you'll never get a 100% default rate. That leaves about half of it being made up of unfunded liabilities for pensions ect but we have decades to make the economy grow enough to cover it...
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Aph
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#5433
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#5433
(Original post by Nigel Farage MEP)
No there is more than £410bn in circulation in Britain. You are only looking at M1 suppy when you should be looking at M4, or you could be talking about physical money which was larger than £410bn last time I checked.

You need to read up on government debt as it is not like debt individuals have which they must repay back. Government debt is different in that the growth of debt needs to be less than the growth in tax revenue otherwise a debt crisis strikes. If the growth in tax revenue is higher the interest can always be repaid and the debt rolled over indefinitely unlike private debt where it must be repaid within a set time. Secondly, where private debt is money owed by one individual to another, government debt is largely debt owed to ourselves. Following WWII British debt was 255% of GDP but has now dropped to under 100% as the GDP has grown. The debt was not paid off, it was rolled over by continually meeting the interest payments. If there is a strong government in a country who raises taxes when times call for it, and slashes spending to control the debt growth, a country can continue to grow while still having a large debt.
Physical money last time I checked is only £60bn according to the Bank of England...

debt but owed to ourselves? I get the concept that bank notes aren't money but they are promissory notes so basically handing over debt, that hardly makes any sense though... And if debt matters so little why try and ballence the books?
(Original post by Rakas21)
Your talking about different types of debt though.

The UK debt to GDP totals 900% however the government is dealing with the fiscal deficit so that sorts out 100% of it almost. Household debt and business debt accounts for about 300% but you'll never get a 100% default rate. That leaves about half of it being made up of unfunded liabilities for pensions ect but we have decades to make the economy grow enough to cover it...
i am? And if we don't grow enough?
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tehFrance
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#5434
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#5434
(Original post by Stiff Little Fingers)
anyone play democracy 3? Just introduced my other half to it and I'm fairly certain she's gone mad with power - decided the best way to combat homelessness was increased funding for particle accelerators. Great fun once you've added extremism, the axis of evil and democratic decay.


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You can lose hours playing that game, I once made it through 3 terms with multiple assassination attempts while being PM, I suppressed all the peoples
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Life_peer
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#5435
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#5435
(Original post by mobbsy91)
Well, about time the beeb covered this
She was ‘mad as hell’ – time to deal with it, I'd say. :laugh:
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That Bearded Man
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#5436
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#5436
(Original post by tehFrance)
Why though? If you had a household budget of £5,000 a month and then one day you lose your job and the budget is now £3,000 a month, would you not make cuts at home? This is what I don't understand about anti-austerity morons.
Because it isn't as simple as just shaving £2000 off your budget per year. You've essentially cut their yearly income in half, you've criticised tax increases by 5-10% yet see no problem with a 50% pay cut, just because they are on benefits.

If you want to tackle welfare, you have to cut rent in cities, where all the jobs are. Rent prices are rising and becoming a larger percentage spend of people's bills. So rent needs tackled. If you invested in effective insulation, public computer areas (reopen libraries) and programs to reduce drug/cigarette/alcohol addiction and created low cost social housing on a fixed rate in line with benefits. You would be reducing heating costs, stop the rent exploding, reducing expenditure on cigarettes and alcohol and opening up the jobs market by allowing them to apply for jobs online.

I used to think a food voucher system would work, but it misses the point. The benefit system doesn't protect claimants as cost effectively as it could but are too ideologically opposed to invest short term for long term gain. As for their disability cuts, it's just cruel.
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#5437
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#5437
(Original post by Stiff Little Fingers)
anyone play democracy 3? Just introduced my other half to it and I'm fairly certain she's gone mad with power - decided the best way to combat homelessness was increased funding for particle accelerators. Great fun once you've added extremism, the axis of evil and democratic decay.


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I once used it to confirm my right-wing slightly authoritarian and socially conservative policies were the best and swiftly won the game. :cool:
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Aph
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#5438
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#5438
(Original post by Stiff Little Fingers)
anyone play democracy 3? Just introduced my other half to it and I'm fairly certain she's gone mad with power - decided the best way to combat homelessness was increased funding for particle accelerators. Great fun once you've added extremism, the axis of evil and democratic decay.


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£20?!
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Jammy Duel
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#5439
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#5439
(Original post by Aph)
£20?!
Just wait for it to be on sale
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Aph
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#5440
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#5440
(Original post by Jammy Duel)
Just wait for it to be on sale
You mean free???
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