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    (Original post by bob072)
    And elected politicians tell the civil service what to do. Personally I would like reform of the electoral system, change it to AV+ which the Labour government refused to do, and have more direct democracy.


    You do realise we have a national debt of nearly £2 trillion? And each year £40 billion is spent paying interest to rich investors (at a time interest rates are low).

    If we continually run a deficit as you want, we will never make progress at paying it off and investors will lose confidence so we won't be able to borrow any money to invest in the NHS, education, military.

    It's kind of like using all your firewood at the start of winter, it feels great for us in the present but the future generation will pay the price.
    Ministers are not elected and they have no need to garner any support from the public or proffesionals in their sector; Jeremy Hunt is a great example of that, he isn' even that popular in his constituency (it's where I live).

    Don't put words in my mouth, I never said I supported anything, just made an observation on what will happen to public opinion.

    To use your analogy the Tories are sitting on a big pile of firewood, refusing to burn it because they might need it later, while those around them are freezing RIGHT NOW.

    The view in many places is that many public services are already at breaking point, there is no benefit to saving cash to invest later if you can't support them now and that is where the pressure will come on the government.
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    (Original post by bob072)
    And elected politicians tell the civil service what to do. Personally I would like reform of the electoral system, change it to AV+ which the Labour government refused to do, and have more direct democracy.


    You do realise we have a national debt of nearly £2 trillion? And each year £40 billion is spent paying interest to rich investors (at a time interest rates are low).

    If we continually run a deficit as you want, we will never make progress at paying it off and investors will lose confidence so we won't be able to borrow any money to invest in the NHS, education, military.

    It's kind of like using all your firewood at the start of winter, it feels great for us in the present but the future generation will pay the price.
    Well not really because you don't control firewood production. You don't have a bank that can alter the interest rates, nor create more firewood. You can't tax other people for their firewood either.
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    (Original post by Dalek1099)
    You are just making yourself look stupid here Government finances don't work like household finances. If you just keep cutting and cutting then you will have nothing left because money is created through debt and thus just paying back all the money means there is not much money for people to use to create opportunities to grow the economy.
    Capital expenditure, revenue expenditure, and income are all the same whatever you're looking at, whether it be a government, a business, or a private individual/household, consequently the same can be said of current and total deficits/surpluses which is what is being discussed. The difference in the case of governments is they have MUCH higher borrowing power. I think you're the one making yourself look stupid here because I'm assuming the "money is created through debt" is referring to fractional reserve banking which has nothing to do with the government and there is no reserve rate for the UK anyway.
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    (Original post by Jammy Duel)
    Capital expenditure, revenue expenditure, and income are all the same whatever you're looking at, whether it be a government, a business, or a private individual/household, consequently the same can be said of current and total deficits/surpluses which is what is being discussed. The difference in the case of governments is they have MUCH higher borrowing power. I think you're the one making yourself look stupid here because I'm assuming the "money is created through debt" is referring to fractional reserve banking which has nothing to do with the government and there is no reserve rate for the UK anyway.
    http://www.taxresearch.org.uk/Blog/2...to-pay-for-it/
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    This is great news.
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    "First it assumes that the government spends other people’s money. It doesn’t. It spends it’s own."

    Immediately that raises questions and a quick Google find that he is the source of many of the policies that form "Corbynomics" and has made claims on government finance which have been debunked by basically everybody credible.

    "Households can’t create their own money out of thin air to repay debt but governments with their own currency and central bank (as the UK has) can."

    Would you like to point out when the BoE stopped being independent? QE is also not how the government finances itself via debt, it is financed via sale of GILTs

    "Third, so long as the creation of government debt keeps pace with inflation and it does not overheat the economy by trying to create more than full employment then government debt is not a problem any more than having money in your pocket is a problem."

    Actually it's keeps up with GDP growth so as to maintain a stable debt:GDP ratio, it is also false to say that it is like having money in your pocket because money in your pocket is an asset, government debt is a liability.

    Try again
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    (Original post by Jammy Duel)
    "First it assumes that the government spends other people’s money. It doesn’t. It spends it’s own."

    Immediately that raises questions and a quick Google find that he is the source of many of the policies that form "Corbynomics" and has made claims on government finance which have been debunked by basically everybody credible.

    "Households can’t create their own money out of thin air to repay debt but governments with their own currency and central bank (as the UK has) can."

    Would you like to point out when the BoE stopped being independent? QE is also not how the government finances itself via debt, it is financed via sale of GILTs

    "Third, so long as the creation of government debt keeps pace with inflation and it does not overheat the economy by trying to create more than full employment then government debt is not a problem any more than having money in your pocket is a problem."

    Actually it's keeps up with GDP growth so as to maintain a stable debt:GDP ratio, it is also false to say that it is like having money in your pocket because money in your pocket is an asset, government debt is a liability.

    Try again
    There is an equivalence between assets and liabilities which is part of the point of the article. For example, the government creates debt which is a liability but it creates the debt to pay your wages if you are a public employee for example so its asset for you but a liability to the government. The money that you have will be someone else's debt.
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    (Original post by Dalek1099)
    There is an equivalence between assets and liabilities which is part of the point of the article. For example, the government creates debt which is a liability but it creates the debt to pay your wages if you are a public employee for example so its asset for you but a liability to the government. The money that you have will be someone else's debt.
    Ummmm...again, you're talking about fractional reserve banking when talking about your money being debt, not government financing. Can you get somebody supporting your point that isn't a rabid lefty that makes spurious claims and resorts to blogs?
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    (Original post by Jammy Duel)
    Ummmm...again, you're talking about fractional reserve banking when talking about your money being debt, not government financing. Can you get somebody supporting your point that isn't a rabid lefty that makes spurious claims and resorts to blogs?
    How is it not Government financing though as they are borrowing the money creating debt? The bank can use fractional reserve banking in order to create the money to lend to the Government but thats irrelevant to the discussion as there are other lenders and the point is that money is created through debt not the way its created. I just explained how a public sector employee has cash because the Government has debt and the same principle holds for virtually all money but with a lot more transfers of money that help boost the economy.
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    (Original post by Dalek1099)
    How is it not Government financing though as they are borrowing the money creating debt? The bank can use fractional reserve banking in order to create the money to lend to the Government but thats irrelevant to the discussion as there are other lenders and the point is that money is created through debt not the way its created. I just explained how a public sector employee has cash because the Government has debt and the same principle holds for virtually all money but with a lot more transfers of money that help boost the economy.
    ALL borrowing creates debt, it is not unique to the government, when I use my credit card I am creating debt, if I take out a loan I am creating debt, if I take out a mortgage it is creating debt, it is impossible to borrow without creating debt. A public sector employee does not need debt to be paid (beyond that inherent in the financial system), would you care to explain the debt creation in paying public sector employees if running an overall budget surplus? Also the simple movement of money does not boost the economy, only the spending on final products, that is going out and spending your money in shops, pubs, restaurants, etc.
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    (Original post by Dalek1099)
    How is it not Government financing though as they are borrowing the money creating debt? The bank can use fractional reserve banking in order to create the money to lend to the Government but thats irrelevant to the discussion as there are other lenders and the point is that money is created through debt not the way its created. I just explained how a public sector employee has cash because the Government has debt and the same principle holds for virtually all money but with a lot more transfers of money that help boost the economy.
    Hmm perhaps life can teach you how these things work. It’s not that hard of a thing to understand
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    (Original post by Jammy Duel)
    ALL borrowing creates debt, it is not unique to the government, when I use my credit card I am creating debt, if I take out a loan I am creating debt, if I take out a mortgage it is creating debt, it is impossible to borrow without creating debt. A public sector employee does not need debt to be paid (beyond that inherent in the financial system), would you care to explain the debt creation in paying public sector employees if running an overall budget surplus? Also the simple movement of money does not boost the economy, only the spending on final products, that is going out and spending your money in shops, pubs, restaurants, etc.
    That will be due to lending elsewhere like the public sector employee is now being paid for by taxes that come from some other employee's income which can come from a business owner that is borrowing as a form of investment by someone else to the owner for example.
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    Just noticed another falsehood in the link provided in that it claims that government debt is very rarely repaid, which is objectively false, the fact that it is always repaid is why it is such a safe investment and why the government is able to borrow so much at such low interest (compare that to somewhere like Argentina that had a history of defaulting on debt and is not basically trapped in a loop because they only way to borrow is with high interest, which in turn leads to another default), it might be financed though more debt but that is not the same as not paying back the debt, it would be like taking out a loan to pay off your credit card.
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    (Original post by Jammy Duel)
    Just noticed another falsehood in the link provided in that it claims that government debt is very rarely repaid, which is objectively false, the fact that it is always repaid is why it is such a safe investment and why the government is able to borrow so much at such low interest (compare that to somewhere like Argentina that had a history of defaulting on debt and is not basically trapped in a loop because they only way to borrow is with high interest, which in turn leads to another default), it might be financed though more debt but that is not the same as not paying back the debt, it would be like taking out a loan to pay off your credit card.
    Thats what the author of the article meant although they maybe were a bit unclear and they were also probably referring to the fact that the debt is paid back at a very slow rate.
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    (Original post by Dalek1099)
    Thats what the author of the article meant although they maybe were a bit unclear and they were also probably referring to the fact that the debt is paid back at a very slow rate.
    It's paid back at the time stipulated. I suggest you look up how Gilts work before commenting further and making yourself look even more stupid. Some are a little more complex like double dated gilts, but the last of those matured at the end of 2013, but the majority of debt is in conventional gilts which work really simply (a maturity date is set where the debt is repaid, and an interest rate is stated which is paid annually in two instalments, one in March and one in September), and a quarter of the gilts by nominal value are index linked meaning the interest paid moves in line with RPI (although the rate is not necessarily equal to RPI) and some of these don't mature until half a century after being issued.

    For instance if the government were to issue £1bn worth of 10% Treasury Gilt 2023 tomorrow (and they would be sold immediately with that interest rate but that's irrelevant to the example) then in 2023 £1bn total would be paid to the owners of the gilts and between now and then a total of £50m would be paid to the holders in March and September each year. in 2023 with the paying of that £1bn the debt would cease to exist, they might issue another £1bn to clear that debt but that specific debt will be paid.

    Sadly I don't have data on what percentage of the debt is held in 2 year bonds, 5 year bonds, 10 year bonds, and 30 year bonds (which are the most common ones) and I'm pretty sure there are still perpetual bonds out there (some debts going back to the mid 19th century were only paid back a few years ago because they were perpetual, eve if VERY low value by today's standards) and I do not know intuitively how it's split because economic conditions when issuing them will determine interest rates on different bonds and how long before maturity. Looking at some other data it would seem 10-15 years is average given you're looking at £100-£150bn a year issuance at the moment (mostly now refinancing old debt in this financial year), so less time to repay than a mortgage.
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    (Original post by ChaoticButterfly)
    Not for the people who died it wouldn't.

    You right wing triggered snowflake you. *pats head*

    It;s not so much virtue signalling. It's bascially getting enjoyment out of calling people like you c*nts.
    Why I am a ****? Because I care about economic freedom?

    The left has one argument, and that is that anyone who opposes the left is a bad person, and I see that you have resorted to that bullying tactic now.

    If you aren't smart enough to understand what I'm saying, just ask for clarification.

    Don't get yourself worked up.

    ****.
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    (Original post by ChaoticButterfly)
    Snowflake.
    Keep on digging.
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    (Original post by ChaoticButterfly)
    As if any of this has any consequences. Or that you weren't actually knobs.
    The alternative to austerity is passing on further debt down the generations as the baby boomers did. All you’re doing is delaying the inevitable and passing the buck on. I fail to see how this is the morally superior position,
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    (Original post by Davij038)
    The alternative to austerity is passing on further debt down the generations as the baby boomers did. All you’re doing is delaying the inevitable and passing the buck on. I fail to see how this is the morally superior position,
    Disagree. We had huge debts after WWII. Far greater than what we have now. Instead of a austerity we built hundreds of thousands of houses, a welfare state and the NHS. The debt shrank. This was the era which you said was superior to the one we have now.

    The idea that you need austerity to pay the debts down is economically false.
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    (Original post by DeBruyne18)
    Disagree. We had huge debts after WWII. Far greater than what we have now. Instead of a austerity we built hundreds of thousands of houses, a welfare state and the NHS. The debt shrank. This was the era which you said was superior to the one we have now.

    The idea that you need austerity to pay the debts down is economically false.

    The only alternative to austerity is greater growth.

    If the Labour party understood that but wanted more spending they would have a fair tax system where everybody pays more. Instead their manifesto targeted everything on the top 5% and make regulations far harder for business.
 
 
 

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