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Is there a point in trying to save the economy?


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Showing 51-73 of 73 posts in this discussion
In reply to an earlier post on 9 May 2012 22:35:27 BDT
Last edited by the author on 9 May 2012 22:41:26 BDT
Spin, Are you asking questions here, answering your own questions, or what?

<<The "Government" debt?>> (Called the National Debt) results from governments running budget deficits, when they spend more than they tax. They get the money to finance their debt by borrowing, if you subscribe to a pension fund some of your contributions will probably have been loaned, at interest, to the government.

<<Who finances government?>> Tax payers mainly, to the tune of around £540 billion a year at present; The gov spends about £700 billion, the deficit of £160 billion is financed by borrowing (see above). When the gov takes about half of everything earned in the country to pay for its spending, it means you and others can't spend so much on all those digital toys, plastic trinkets, takeaways and dope. The gov transfers it to worthy causes like OAP's, the NHS, law and order, road building, education, MPs wages and such like.

<<"Consumer debt?">> does not finance the government (see above).

In reply to an earlier post on 9 May 2012 22:46:28 BDT
Spin says:
Tom: 1+1 does not equal "2". Think about it before spouting your scientific influenced take on "Christianity". Think about that too, if you have time between your prayers and your condemning of your fellows.

In reply to an earlier post on 9 May 2012 22:54:16 BDT
Last edited by the author on 9 May 2012 23:00:49 BDT
TomC says:
Yet more evidence of delusion. I am not a Christian, and I don't lecture those who are.

But if you're serious about your assertion that 1+1!=2, perhaps you can make the national debt disappear. Ring up that nice Mr Osbourne, he'd love to hear from you.

In reply to an earlier post on 9 May 2012 23:01:07 BDT
Spin says:
Tom: you are not a christian? So why do you post defences of christianity and condemn lifestyles you know nothing about? If you are not a christian you are doing a damn good job of pretending to be one...

In reply to an earlier post on 9 May 2012 23:05:11 BDT
Last edited by the author on 9 May 2012 23:08:32 BDT
TomC says:
References please.

There is another Tom, you know.

I regard religion in a similar way to sex: enjoyable and harmless as a solitary pleasure, even more so between consenting adults, and grossly offensive when forced on those who neither want nor need it. And yes, the same could be said of atheism.

In reply to an earlier post on 9 May 2012 23:06:27 BDT
Spin,

3 - 3.3 = -0.3.

The -0.3 came by borrowing for consumption of plastic toys, takeaways and dope (not for investment in more productive capacity). The economy appeared to be booming, but it was a borrowing bubble, so we could collectively consume more than we produced, which had to burst. Contrast with China, where they produce more than they consume, and lend us their savings so we could continue to live high on the hog...for a time.

Fortunately all bad things DO come to an end.

In reply to an earlier post on 9 May 2012 23:09:07 BDT
Spin,

Further confirmation, not that it's needed, that you write rollox on most things.

In reply to an earlier post on 9 May 2012 23:48:43 BDT
Spin,

Do you know the tale of the oozlum bird, he spun himself faster and faster in ever decreasing circles until he disappeared up his own ****.

In reply to an earlier post on 10 May 2012 05:29:25 BDT
Gordon.....let's go back to the beginning....see if we can move closer to consensus....

Can you help me to understand the way money first came into "being" in the UK...?...also when was the first debt created and when was the first tax levied...and by whom? Who was the initial creator of money? A person? An institution?

Thanks.

In reply to an earlier post on 10 May 2012 10:35:14 BDT
Simon, dear sweet boy,

<<...first came into "being" in the UK>>

Strange turn of phrase, never mind.

When did the UK first come into "being" laddie?...

Of the history of money I know nothing my son.

He's a little project for you:

Why not ask Amazon? Key in: 'history of money', 'money in ancient Britain' (don't bother with UK). There will be something you can download to your Kindle (if you do well, I'll get you a new Touch) and charge to my account as usual(that's money).

Then you can make up a little project book - cut and paste pictures of sheep skins, cowrie shells, bags of corn, goldie looking chains, battered Roman coins with bits snipped off the edges, scruffy looking bits of paper with portraits of ancient Chinese emperors, packets of WWII US army issue Lucky Strike... off the Net

Just a guess, to get you started howzabout:

...and low, money came into "being" (LOL)...God brought it into "being" way back when he brought the UK into "being", then Adam and Eve, then he said 'Oi, you'll need some of this', as he tossed them a fig leaf and a fat wad.

And, Simon, the rest is history...that's how you came to have your Kindle, your PS3, your iPhone, your docking station, your 42" FHD plasma with a premium Sky package, your laptop, your ergonomic stool, your cuddly toys...your own bedroom to keep them in...what a lucky lad you are. and when you're 17 I'm going to get you an IQ in Zen pearlescent white.

Now you get off to school and I'll tell you another story after your tea tonite, instead of you going on your PS3.

In reply to an earlier post on 10 May 2012 10:41:56 BDT
David Groom says:
Simon "the fount" Boyd,

'Can you help me to understand the way money first came into "being" in the UK...?...also when was the first debt created and when was the first tax levied...and by whom?'

The simple answer is no, because there has always been debt in the world. When Wayne Flintstone grew his first bushel of wheat and tried to swap it for a peck of turnips from Colleen Rubble, she said, no way Wayne, my turnips are worth twice your wheat. So Wayne said, Ok I'll owe you a half bushel of wheat next year, when my stubble has grown again. And so the concept of debt was born. When you look at the world, everything runs on somebody owing somebody else for something, and the money that you all crack on about is merely an accounting medium to avoid book keeping all those debts. i.e. it's a common medium of exchange.

As for who was the first creator of money, well that goes back to many hundreds of years BC in ancient Greece, maybe India, maybe Turkey - nobody knows for sure. However, the concept of money was then exactly as it is now - a medium of exchange, with recognition of value in the actual coins themselves.

In reply to an earlier post on 10 May 2012 11:20:41 BDT
Gordon and David...stuck...can't answer the first question...always been debt....good one...so what debt was there in a Native American village?

In reply to an earlier post on 10 May 2012 11:48:43 BDT
Simon, my dear boy,

Do you want to play a game?

<<always been debt>> yes you could be right, perhaps when Eve took a bite of that apple, which was not hers, she got it on tick...that's how banking started. Just a guess Simon my boy, because I don't know...try Googling it...but I bet you've got an answer already that you are waiting to spring on me...go on then...

<<so what debt was there in a Native American Village>>

Laddie I know nothing about Indian villages, do you want to tell me?

Is this Simon's Quiznite?

BTW what's your point?

In reply to an earlier post on 10 May 2012 13:24:25 BDT
Last edited by the author on 10 May 2012 13:25:51 BDT
Simon, I Googled it.

Native Americans used money, which they called 'wampum', necklaces and bracelets made from shells. The Narragansett specialised in making it by drilling the shells and stringing them...they were like the royal Mint. Guess what, when the nasty Tories arrived they started mass-producing wampon using steel drill bits to make the holes for stringing causing hyperinflation.

The powerful warrior Iroquois got rich by extracting wampom from other tribes in tribute.

I've downloaded some pics that we can colour and put in your project book Simon.

In reply to an earlier post on 10 May 2012 13:39:32 BDT
Tom,

I agree that people out spending their means did contribute, but the way money itself is created causes the financial nadirs that we are in the midst of.

When money is created it is done so at interest. So, there is always more money owed than is ever available to pay back. Therefore, in order to service the debt new money needs to be created to pay for the old debts, inturn creating new debt.

All this expands the money supply. However, as our currency is intrinsically worthless it's value is therefore derived from how much of it is in circulation.

If the supply of money is left to go on increasing it becomes worthless. Banks then need to shrink the money supply in order to maintain its value.

This is a cycle and it's always been the same that's why I said the bust part would still occur because it is necessary to the system.

Posted on 10 May 2012 13:54:02 BDT
David Rudd says:
It's unrestrained access to credit that stirs up the whirlwind. As a nation and as individuals we need to develop a way of thinking which is not credit orientated. That is, a way of thinking which is not consumerist driven and thereby credit dominated. It will take a soul-change.

In reply to an earlier post on 10 May 2012 22:15:34 BDT
Last edited by the author on 11 May 2012 10:34:11 BDT
TomC says:
Randal,

"When money is created it is done so at interest. So, there is always more money owed than is ever available to pay back. Therefore, in order to service the debt new money needs to be created to pay for the old debts, in turn creating new debt."

There is only more owed than is ever available to pay back if people - or corporations - borrow more than they are able to earn in their lifetime to service the debt. Yes, when the money is borrowed a debt - and hence more money - springs into existence, but when it is paid off it disappears again. The only difference the interest makes is that it takes longer to do so.

Let's consider the growth of money over the long-term. As an individual, I work to earn my employer a certain sum of money over my working life. This should be well in excess of the cost of my salary plus the total resources which I have consumed during the course of my life. The difference left over when I am no more is a positive contribution to the total amount of money washing around the financial system, so yes, the total amount of money in circulation will increase. So, however, will the population, and it's the relationship between the two that matters. (How it is distributed of course is a separate issue.)

On the shorter term, the financial system does go through cycles, and having cheap money stimulates demand. The subsequent crash, however, will come even if people can eventually repay the debt; it arises from demand flattening out. When there is excess cheap money available, new manufacturing ventures spring up to satisfy the demand which has been pent up; eventually, though, people have borrowed as much as they think they can handle, and there are only so many consumer goods they can consume. Once that happens, businesses begin to crash, takeovers happen, and the level of manufacturing capacity reverts to a stable level.

You may think there ought to be a better way of matching supply to demand than industrial Darwinism; I couldn't possibly comment.

In reply to an earlier post on 10 May 2012 22:29:20 BDT
Last edited by the author on 10 May 2012 22:31:30 BDT
TomC says:
Spin,

When you eventually drag your sorry a*se back, you will be pleased to know that - encouraged by your example - I have done some research on the problem of the sum "1 + 1".

I discovered that a distinguished intellectual had grappled with this abstruse problem; like you, he was determined not to be distracted by inferior minds who insisted that the answer was "2". His genius was of a far higher order ....

http://www.youtube.com/watch?v=2v8cyAwdRs0

In reply to an earlier post on 12 May 2012 12:52:49 BDT
Quality post

In reply to an earlier post on 12 May 2012 15:48:32 BDT
"The problem the nation has is not caused by people who buy TV's and phones; it's caused by people who don't. People like me, in fact, who are reluctant to spend money and incur debt. If I really wanted to do my bit towards national prosperity I'd be out on the high street buying stuff, keeping people in jobs and helping contribute to government finances."

Quoted for truth.

In reply to an earlier post on 12 May 2012 15:57:33 BDT
Wyan...so wise...so 'owl' like...sage..and onion...

In reply to an earlier post on 12 May 2012 15:59:35 BDT
What if you don't have the money. Are people who save and people who don't buy to feel guilty??

In reply to an earlier post on 12 May 2012 20:55:04 BDT
Last edited by the author on 12 May 2012 21:01:32 BDT
TomC says:
I didn't say I felt guilty about it. It's just a fact that if we all keep money under the bed because we are apprehensive about the future, and decide to hold on to that old sofa for a bit longer, the economy will feel the effect. Sad, but I'm afraid that's life. Personally, I have an aversion to replacing stuff anyway - I still have a washing machine I bought over 20 years ago - but not everyone has the same view.

Given the government's reluctance to spend our money which they collect from us through taxes, the demand in the economy which will keep people in jobs has to be financed in other ways. Buying commodities and consumer goods is only one way in which this may happen. Another way, of course, is if we have to start spending our money on stuff which we used to get through public services; more privatisation in other words. That is definitely coming.

But lack of consumption is not the only problem. As I said, there's a major issue because banks are simply failing to perform the function that they are supposed to: lend to businesses. Perfectly sound businesses are being refused finance and facing possible bankruptcy, and it shouldn't be happening.
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Discussion in:  politics discussion forum
Participants:  9
Total posts:  73
Initial post:  8 May 2012
Latest post:  12 May 2012

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