Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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It's not a what if, that's exactly where the money came from. The interesting comparison is the Spanish empire which was even more purely extractive.surrey_commuter said:
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.
The post Napoleonic slump was a big deal at the time. There was a big property crash with half-finished buildings standing empty for over a decade, so I'm not suggesting there are not consequences. But I think other factors have more influence, rather than a simple relationship of debt to GDP ratio>100%=bad.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
My hypothesis is that as a mature economy there might not be any long periods of rapid economic growth which has averaged 2.2% since 1949. In that scenario it would take a great many years of balanced budgets to significantly reduce or debt to GDP ratio.rjsterry said:
It's not a what if, that's exactly where the money came from. The interesting comparison is the Spanish empire which was even more purely extractive.surrey_commuter said:
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.
The post Napoleonic slump was a big deal at the time. There was a big property crash with half-finished buildings standing empty for over a decade, so I'm not suggesting there are not consequences. But I think other factors have more influence, rather than a simple relationship of debt to GDP ratio>100%=bad.
That ignores the fact that there is no poltical will to run a balanced budget.0 -
Well exactly. Wishing it were so ain't going to change that.surrey_commuter said:
My hypothesis is that as a mature economy there might not be any long periods of rapid economic growth which has averaged 2.2% since 1949. In that scenario it would take a great many years of balanced budgets to significantly reduce or debt to GDP ratio.rjsterry said:
It's not a what if, that's exactly where the money came from. The interesting comparison is the Spanish empire which was even more purely extractive.surrey_commuter said:
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.
The post Napoleonic slump was a big deal at the time. There was a big property crash with half-finished buildings standing empty for over a decade, so I'm not suggesting there are not consequences. But I think other factors have more influence, rather than a simple relationship of debt to GDP ratio>100%=bad.
That ignores the fact that there is no poltical will to run a balanced budget.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
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I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?0 -
There's no run on Japanese gov't debt, so I wonder what the scaremongering is about if that is what you are worried about.
But let's be clear, you're still only looking at one side of the equation, as the charts above illustrate.0 -
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
The total level of debt did not used to matter because it was all about debt servicing costs but Rick moved the goalposts. Now we just need to decisively beat the US navy and rule the waves for a century.rjsterry said:
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive0 -
Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.0 -
So the answer is to take spending on health, education and social security back to pre-war levels
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Well spotted. That is inexcusable.surrey_commuter said:
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive
This forum needs a hall of shame thread for bad graphs.0 -
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
It is only a small piece of the pie because we are not at war.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
Sure. But the social side of spending isn't going to disappear. I mean, we have an NHS for starters.surrey_commuter said:
It is only a small piece of the pie because we are not at war.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
https://ifs.org.uk/social-security-spendingSocial security is the largest single component of public spending. Spending on social security has steadily increased in real terms and as a share of national income since the modern welfare state was introduced after the Second World War, as shown in Figures 1a and 1b. In 1948–49, social security spending accounted for around 3.3% of national income; by 2009–10, it had reached 12.5%. Social security has also taken up an ever-increasing proportion of public spending: in 1948–49 it accounted for around a tenth of all spending, whereas today it accounts for closer to 30%.0
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Look at the graph you provided.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.
I've drawn one possible conclusion.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
You will have to confirm what you are arguingrick_chasey said:
Sure. But the social side of spending isn't going to disappear. I mean, we have an NHS for starters.surrey_commuter said:
It is only a small piece of the pie because we are not at war.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
That we need to take the makeup of government spending into account when we're drawing conclusions from the past.surrey_commuter said:
You will have to confirm what you are arguingrick_chasey said:
Sure. But the social side of spending isn't going to disappear. I mean, we have an NHS for starters.surrey_commuter said:
It is only a small piece of the pie because we are not at war.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
...0
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In that case my conclusion is that we would be double fvcked as the war spending would be in additionrick_chasey said:
That we need to take the makeup of government spending into account when we're drawing conclusions from the past.surrey_commuter said:
You will have to confirm what you are arguingrick_chasey said:
Sure. But the social side of spending isn't going to disappear. I mean, we have an NHS for starters.surrey_commuter said:
It is only a small piece of the pie because we are not at war.rick_chasey said:
No that's a cop out. Come on, the logic is there. What's wrong with the logic?pblakeney said:
It might be, it might not be.rick_chasey said:
You need to take the historical context into account however.pblakeney said:Is it not a concern that our debt to GDP ratio is trending towards wartime ratios while we are not at war? Ukraine plays a part but we are not that involved, yet.
Alternate and worrying theory, war follow debt increase. 😱
Back in the day, the military was basically the only major cost for the government, other than lining the pockets of royals. It's only really *since* ww2 does military spending not make up the bulk of all spending, and even then it was much higher as a proportion than it is now.
Nowadays, military spending is only a small piece of the pie, and instead it is social, so it stands to reason that the correlation between government spending and warmongering is broken.
Time will tell.0 -
It's the same curve!surrey_commuter said:
The total level of debt did not used to matter because it was all about debt servicing costs but Rick moved the goalposts. Now we just need to decisively beat the US navy and rule the waves for a century.rjsterry said:
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
We are obviously looking at different things. My second graph starts 200 years prior and looks like the Alpsrjsterry said:
It's the same curve!surrey_commuter said:
The total level of debt did not used to matter because it was all about debt servicing costs but Rick moved the goalposts. Now we just need to decisively beat the US navy and rule the waves for a century.rjsterry said:
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive0 -
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In my world the Govt needs to leave itself head room for when they have no choice but to get the cheque book out.rick_chasey said:I still don't understand what criteria SC uses to establish when govt debt is too much.
Where is this "head room" well that is the gap up to the "tipping point" which can only be identified with hindsight. Symptons of approaching the tipping point are the markets losing confidence and debt servicing costs rising. Once you are past the tipping point then these costs will spiral out of your control.
Currently annual debt servicing costs ae £100bn which the Govt was unable to do anything to stop it from rising.
Truss was a window into the future.0 -
One is just a zoomed in extract of the other. It's the same dataset.surrey_commuter said:
We are obviously looking at different things. My second graph starts 200 years prior and looks like the Alpsrjsterry said:
It's the same curve!surrey_commuter said:
The total level of debt did not used to matter because it was all about debt servicing costs but Rick moved the goalposts. Now we just need to decisively beat the US navy and rule the waves for a century.rjsterry said:
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
With an inconsistent timeline which is unforgivable.rjsterry said:
One is just a zoomed in extract of the other. It's the same dataset.surrey_commuter said:
We are obviously looking at different things. My second graph starts 200 years prior and looks like the Alpsrjsterry said:
It's the same curve!surrey_commuter said:
The total level of debt did not used to matter because it was all about debt servicing costs but Rick moved the goalposts. Now we just need to decisively beat the US navy and rule the waves for a century.rjsterry said:
Strong sense of deja vu.surrey_commuter said:
I am going to ignore the first graph as I think you only chose it for the screwed up nature of the X axis.rick_chasey said:
Eeeerr...surrey_commuter said:
That ignores the fact that there is no poltical will to run a balanced budget.
Chart two is interesting as it shows we took a 100 years to reduce debt after the Napoleonic wars and that was in our period of unprecedented prosperity. If we take the two world wars as one event it took 50 years to get that back down. Now in peacetime we have been steadily increasing it for 20 years.
Why do you not see Japan as our canary down the mine?
It's two views of the same chart by the way. First one is just the recent bit on the right hand side.
my problem with the first graph is that the left hand side is in 4 yearly intervals and then switches to annual, which makes the fall look far more impressive0 -
So when is too much too much? What measures are you using?surrey_commuter said:
In my world the Govt needs to leave itself head room for when they have no choice but to get the cheque book out.rick_chasey said:I still don't understand what criteria SC uses to establish when govt debt is too much.
Where is this "head room" well that is the gap up to the "tipping point" which can only be identified with hindsight. Symptons of approaching the tipping point are the markets losing confidence and debt servicing costs rising. Once you are past the tipping point then these costs will spiral out of your control.
Currently annual debt servicing costs ae £100bn which the Govt was unable to do anything to stop it from rising.
Truss was a window into the future.0 -
Well the Bond markets got rid of Truss. You and I may think that is a good idea but others mayfeel it is a sign that debt levels are too high.rick_chasey said:
So when is too much too much? What measures are you using?surrey_commuter said:
In my world the Govt needs to leave itself head room for when they have no choice but to get the cheque book out.rick_chasey said:I still don't understand what criteria SC uses to establish when govt debt is too much.
Where is this "head room" well that is the gap up to the "tipping point" which can only be identified with hindsight. Symptons of approaching the tipping point are the markets losing confidence and debt servicing costs rising. Once you are past the tipping point then these costs will spiral out of your control.
Currently annual debt servicing costs ae £100bn which the Govt was unable to do anything to stop it from rising.
Truss was a window into the future.
We have the highest rate of tax for 70 years which others may feel is sign that debt levels are too high.
Public sector strikes and hundreds of thousands of unfilled vacancies could be seen as a sign that debt levels are too high.0
