I1L2T3 Posted October 31, 2011 Share Posted October 31, 2011 I suppose you'd just start a war and kill everyone No joke but a war is an option. Link to comment Share on other sites More sharing options...
L00b Posted October 31, 2011 Share Posted October 31, 2011 No joke but a war is an option.Iran is looking an ever-likelier candidate, as it'll take more than whatever was thrown at Iraq and Afghanistan put together. Even if the conflict is somehow successfully compartmented to just that country, and the whole region doesn't go up. Which I certainly wouldn't bet the farm on. Not when China needs so much primary resources that happen to come out of Iran's ground in plentiful amounts. Link to comment Share on other sites More sharing options...
poppet2 Posted November 2, 2011 Share Posted November 2, 2011 If all the European countries are in debt, who are they in debt to? Who is America in debt to? Who is lending all this money to bail out countries like Greece? If Greece can't pay back their loan and become bankrupt, just what will the other EU do, send in the bayliffs and take the Acropolis? Link to comment Share on other sites More sharing options...
llamatron Posted November 2, 2011 Share Posted November 2, 2011 George Osbourne needs to change to Plan B according to this piece in the hope that we can avoid a double-dip recession. Personally I'm stocking up on tinned food, am learning how to live off the land and have just bought myself a nice tent. only 100? seriously that is pathetic:hihi: That must be a negligible amount! Link to comment Share on other sites More sharing options...
llamatron Posted November 2, 2011 Share Posted November 2, 2011 It's more complicated like that. As convenient as it might seem for some people you can't compare household finances with a nation's finances. Almost all countries have a permanent national debt. Which does mean that at some point they've spent more than they were getting in. Seems to be the done thing. People always say this and never explain why its different. All the permanent debt means is that they are paying interest on what they owe which is bad no? Is it ok because you are borrowing off the next generation? seriously I don't understand why you can't compare them? I mean world war II you get into huge debt-thats fine because the debt is something that can't be avoided but then the idea is surely to pay it off during the good times. Rather like someone paying for a hotel on a credit card because their house fell down or something. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 2, 2011 Share Posted November 2, 2011 People always say this and never explain why its different. All the permanent debt means is that they are paying interest on what they owe which is bad no? Is it ok because you are borrowing off the next generation? seriously I don't understand why you can't compare them? I mean world war II you get into huge debt-thats fine because the debt is something that can't be avoided but then the idea is surely to pay it off during the good times. Rather like someone paying for a hotel on a credit card because their house fell down or something. Hi, I think there are some very superficial comparisons that can be made, e.g. around income-outgoings and need for financial discipline. IMO that's where it ends - households get their income in different ways to government. Households have to make a small number of decisions about budgets. Times that number of decisions by many millions for governments. Governments are subject to a massive amount of variables that affect budget management. Households have a very much smaller number of variables that impact budget management. You makes your choices. But back to the superficial view depending on which economic theories you like best you could argue that the right thing to do is cut spending when times are tight (like Osborne is doing). Other theories hold that stimulus spending is needed in our situation. Both require very careful financial management but the latter is completely unintuitive when making a comparison to household finances - I think that's why people really struggle with it. Although that doesn't mean it is wrong in the context of government. As for national debt - see my signature Link to comment Share on other sites More sharing options...
llamatron Posted November 3, 2011 Share Posted November 3, 2011 Hi, I think there are some very superficial comparisons that can be made, e.g. around income-outgoings and need for financial discipline. IMO that's where it ends - households get their income in different ways to government. Households have to make a small number of decisions about budgets. Times that number of decisions by many millions for governments. Governments are subject to a massive amount of variables that affect budget management. Households have a very much smaller number of variables that impact budget management. You makes your choices. But back to the superficial view depending on which economic theories you like best you could argue that the right thing to do is cut spending when times are tight (like Osborne is doing). Other theories hold that stimulus spending is needed in our situation. Both require very careful financial management but the latter is completely unintuitive when making a comparison to household finances - I think that's why people really struggle with it. Although that doesn't mean it is wrong in the context of government. As for national debt - see my signature but if you disagree with the idea of stimulus spending then surely they are comparable. That is surely a circular argument. Link to comment Share on other sites More sharing options...
Supertramp Posted November 3, 2011 Share Posted November 3, 2011 People always say this and never explain why its different. All the permanent debt means is that they are paying interest on what they owe which is bad no? Is it ok because you are borrowing off the next generation? seriously I don't understand why you can't compare them? I mean world war II you get into huge debt-thats fine because the debt is something that can't be avoided but then the idea is surely to pay it off during the good times. Rather like someone paying for a hotel on a credit card because their house fell down or something. Yes you pay it off in the good times, but we didn't we carried on spending what we hadn't got and the massive boom time we enjoyed was on the back of public borrowing. If the government had been more frugal, we would be in a better position to see out the current bad times. However the previous government saw an end to boom and bust so they never thought bad times would come again. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 3, 2011 Share Posted November 3, 2011 but if you disagree with the idea of stimulus spending then surely they are comparable. That is surely a circular argument. You can come to that conclusion if you are content to enjoy a simplistic superficial view. As I explained the complexities of government finance are immeasurably more complex in myriad ways. George Osborne is trying to be fiscally very tight but he might end up spending more than expected due to pressures that just wouldn't exist for a household. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 3, 2011 Share Posted November 3, 2011 Yes you pay it off in the good times, but we didn't we carried on spending what we hadn't got and the massive boom time we enjoyed was on the back of public borrowing. If the government had been more frugal, we would be in a better position to see out the current bad times. However the previous government saw an end to boom and bust so they never thought bad times would come again. Arguably Osborne is trying to create an artificial bust-boom to create conditions for rapid growth. If I was cynical I would say he's trying to create the boom conditions to coincide with the next election when it is rumoured he expects to take over as PM. The USA did something similar in the 20s. Brutal cuts 1920-21 followed by a massive boom culminating in the mother of all meltdowns in 1929. We're his little experiment in aligning the economic and political cycles. The pain of millions of people is worth it if it boosts his career. Link to comment Share on other sites More sharing options...
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