Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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profits have been squeezed for too long. When you can buy a chicken for less than a pound per pound of meat, you know someone is in troublefocuszing723 said:
You know what really caused this inflation though. I tell you what, interest rates being historically at their lowest level.
At some point it was going to happen.
left the forum March 20230 -
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinking0 -
yepsurrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinking
left the forum March 20230 -
surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
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The problem with debt is that it's not a problem until suddenly (the cost of financing) it is a problem.0
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The absolute monster debt after WW2 was never a problem because the Uk had such good growth till the mid 70s.
It’s all about the growth you have over the term of the borrowing.
The problem is not the debt nor the low interest rates. The low interest rates were a **symptom** of the problem, ie no growth.
Had the govt not been so concerned with debt and austerity it’d be all much better.0 -
It's high interest rates combined with a lot of debt that is the problem.rick_chasey said:The problem is not ... the low interest rates.
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DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!1 -
https://www.youtube.com/watch?v=d0nERTFo-Sk
You can't push the limits either end of the scale.0 -
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!0 -
Only in that it impacts growth. They're a function of growth.wallace_and_gromit said:
It's high interest rates combined with a lot of debt that is the problem.rick_chasey said:The problem is not ... the low interest rates.
Growth heals all and recession kills all.
With the UK demographics, if you are stagnant you will wrack up debt regardless, unless you start to make everyone poorer and you'll end up in a recession anyway.
SC puts the cart before the horse with this debt stuff.0 -
I mean Rick, why does a bubble burst?rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
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Growth isn't limitless.rick_chasey said:What’s a bubble got to do with government borrowing?
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Rick - What happens when a country can no longer borrow at sensible interest rates, or even find lenders at all, in its own currency?0
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I guess the word "bust" does exist in Ricktopia, just the word "boom".rick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!0 -
But in extremis, they have their navy ships seized by the bailiffs.rick_chasey said:Countries don't die.
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Sure, they default. But they need the growth to avoid that!wallace_and_gromit said:Rick - What happens when a country can no longer borrow at sensible interest rates, or even find lenders at all, in its own currency?
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As no government can guarantee growth, what’s the best plan to avoid anything awkward like default or worthless currency?rick_chasey said:
Sure, they default. But they need the growth to avoid that!wallace_and_gromit said:Rick - What happens when a country can no longer borrow at sensible interest rates, or even find lenders at all, in its own currency?
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There are many countries which have shrunkrick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!0 -
Yeah, look at Argentina and their inflation.
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And here is japanfocuszing723 said:Yeah, look at Argentina and their inflation.
https://d3fy651gv2fhd3.cloudfront.net/charts/japan-gdp.png?s=wgdpjapa&projection=te&v=202212301245V20220312&ismobile=1&w=400&h=250&lbl=0&d1=19730315
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We've been doing it for literally centuries. During the Napoleonic Wars, Government debt rose to about 260% of GDP and that took until the outbreak of WWI to get down to the levels last seen in 2008. From 1750-1850 government debt was well over 100%. Nothing broke then. Today's borrowing is pretty trivial compared with the Napoleonic Wars, WWI & WWII.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
So let's all just calm down.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
rjsterry said:
We've been doing it for literally centuries. During the Napoleonic Wars, Government debt rose to about 260% of GDP and that took until the outbreak of WWI to get down to the levels last seen in 2008. From 1750-1850 government debt was well over 100%. Nothing broke then. Today's borrowing is pretty trivial compared with the Napoleonic Wars, WWI & WWII.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
So let's all just calm down.NO. I'M QUITE HAPPY SHOUTING THANKS!
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Sure but you get my point right. The issue in the Uk isn’t the debt level.surrey_commuter said:
There are many countries which have shrunkrick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
It’s the no growth over the last decade.
Everything else flows from that. Austerity was a really big contributor to that and that austerity was driven by a focus on the debt and not the growth.0 -
Standard & Poor's credit rating for Argentina stands at CCC+ with negative outlook. Moody's credit rating for Argentina was last set at Ca with stable outlook. Fitch's credit rating for Argentina was last reported at CCC- with n/a outlook. DBRS's credit rating for Argentina is CCC with stable outlook. In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of Argentina thus having a big impact on the country's borrowing costs. This page includes the government debt credit rating for Argentina as reported by major credit rating agencies.https://tradingeconomics.com/argentina/rating
Everybody wants growth, but you can't ignore debt. What about a Countries credit rating?0 -
But say growth is not inevitable, what if our decade of stagnation mirrors Japan and becomes three decades. What if our growth that negated your Napoleonic war debt was only achieved by exploiting our colonies? What if subsequent growth was due to technology leaps. What if the next tech leap is decades away or if it benefits other parts of the world?rjsterry said:
We've been doing it for literally centuries. During the Napoleonic Wars, Government debt rose to about 260% of GDP and that took until the outbreak of WWI to get down to the levels last seen in 2008. From 1750-1850 government debt was well over 100%. Nothing broke then. Today's borrowing is pretty trivial compared with the Napoleonic Wars, WWI & WWII.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
So let's all just calm down.
Lastly, I’d driving growth is so easy why don’t we just do what every other country has done to achieve a high growth economy.1 -
rick_chasey said:
Sure but you get my point right. The issue in the Uk isn’t the debt level.surrey_commuter said:
There are many countries which have shrunkrick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
It’s the no growth over the last decade.
Everything else flows from that. Austerity was a really big contributor to that and that austerity was driven by a focus on the debt and not the growth.
Your point up until 3 moths ago was that we should focus on debt servicing costs. The point of austerity was to make sure that you weren’t spending an ever increasing % of your budget on debt servicing costs.
Growth achieved through increased Govt spending is pointless.
Improving the long term trend rate of growth is a hard and long (decades) process and in a mature economy success would look like a 0.5% uplift. Returning trend rate to 2-2.5% is not going to get rid of your debt mountain2 -
So in order to do counter cyclical fiscal policy your govt debt needs to be a safe haven asset so prudence is required. Lose that status and that policy becomes impossible.surrey_commuter said:rick_chasey said:
Sure but you get my point right. The issue in the Uk isn’t the debt level.surrey_commuter said:
There are many countries which have shrunkrick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
It’s the no growth over the last decade.
Everything else flows from that. Austerity was a really big contributor to that and that austerity was driven by a focus on the debt and not the growth.
Your point up until 3 moths ago was that we should focus on debt servicing costs. The point of austerity was to make sure that you weren’t spending an ever increasing % of your budget on debt servicing costs.
Growth achieved through increased Govt spending is pointless.
Improving the long term trend rate of growth is a hard and long (decades) process and in a mature economy success would look like a 0.5% uplift. Returning trend rate to 2-2.5% is not going to get rid of your debt mountain
However, the need for prudence is really because of poor growth not monster debt, right?
So all these things like Brexit reduce the fiscal room *only because they slow growth*.
There is no unfixable reason why Britain is the only G7 nation that can’t grow post pandemic.0 -
There is an interesting article in The Economist on the tide going out on UK Govt debt.rick_chasey said:
So in order to do counter cyclical fiscal policy your govt debt needs to be a safe haven asset so prudence is required. Lose that status and that policy becomes impossible.surrey_commuter said:rick_chasey said:
Sure but you get my point right. The issue in the Uk isn’t the debt level.surrey_commuter said:
There are many countries which have shrunkrick_chasey said:
yes, growth can continue forever and in macro economics yes, do you rack up debt forever. Countries don't die.focuszing723 said:
DEBT DOES MATTER, YOU CAN'T RACK UP DEBT FOREVER, SOMETHING WILL EVENTUALLY BREAK.rick_chasey said:surrey_commuter said:
it went on for so long that it was normal for anybody under the age of 40focuszing723 said:You can't look at chart and say things were normal.
Rick's belief that it would be wrong not to borrow up to the eyeballs and beyond was mainstream thinkingDebt Doesn't Matter. Growth Matters.
CAN GROWTH CONTINUE FOREVER?
IT'S ANOTHER !!RICKTOPIA!!
It’s the no growth over the last decade.
Everything else flows from that. Austerity was a really big contributor to that and that austerity was driven by a focus on the debt and not the growth.
Your point up until 3 moths ago was that we should focus on debt servicing costs. The point of austerity was to make sure that you weren’t spending an ever increasing % of your budget on debt servicing costs.
Growth achieved through increased Govt spending is pointless.
Improving the long term trend rate of growth is a hard and long (decades) process and in a mature economy success would look like a 0.5% uplift. Returning trend rate to 2-2.5% is not going to get rid of your debt mountain
However, the need for prudence is really because of poor growth not monster debt, right?
So all these things like Brexit reduce the fiscal room *only because they slow growth*.
There is no unfixable reason why Britain is the only G7 nation that can’t grow post pandemic.
We need a talk about what good growth looks like
Less than 1% is stagnant
1-2% is oh my God what can we do
2-2.5% is OK but how do we do better
3%+ - great but is it sustainable
There is no magic wand. If for example the Govt decided to become a member of EEA to boost trend rate of growth by 0.5% then I do not think I would see the benefits in my lifetime.
If there was an obvious way to increase growth then every country would do it. I honestly think the best a Govt can do is less harm0
