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Sad to see economies fail in the same way time and again. Simple lessons to prevent this: 1. Only take on debt or issue bonds in your own currency. 2. Only bo

Sad to see economies fail in the same way time and again. Simple lessons to prevent this: 1. Only take on debt or issue bonds in your own currency. 2. Only borrow for short-term extra spending (like a disaster). 3. Every couple of years all debt should be annulled. That way people don't walk around with a mountain of debt. And companies only give loans for what they can reasonably expect to be paid back within said ”sabbat year”. 4. Need more money than you earn? Chance spending habits instead of ”plastering over” problems by taking on more debt. 5. Taxation should be fair and easy to understand. 6. All expenditure should be fair and easy to understand.

wrong_variable 8y ago
Its not at all simple as that ... Taking on debt in your currency means you won't be able to access international markets, and international market are not just going to allow you to sell bonds in your currency without an extremely steep interest payment, some players won't even invest due to the enormous risk they would be taking. Your point 3,4 makes it seem you are unaware of how money or wealth works - would you like it if every three years the govt just striped you of your ownership of your house ? All debt is someone else's saving, introducing a ”sabbat year” on the debt side also reflects on the ownership side - it would not be possible to own anything long term. Your point 4 would mean companies like Amazon, FB, Google would literally be impossible to create. Its very hard to distinguish between good and bad debt ( its the reason analysts are paid so well ). I agree with your last two points.
Spooky23 8y ago
#3 is exactly what happens in these cycles. Take on a mountain of debt, and inflate out of it.
geezerjay 8y ago
> Only take on debt or issue bonds in your own currency. That means that the borrower would control how much he owed, as governments of nations with their own national currency are able to devalue their currency. Understandingly, potential lenders do frown upon that possibility. Similarly, lenders don't accept judicial arbitration in the jurisdiction that the lender controls.

wrong_variable 8y ago

Its not at all simple as that ... Taking on debt in your currency means you won't be able to access international markets, and international market are not just going to allow you to sell bonds in your currency without an extremely steep interest payment, some players won't even invest due to the enormous risk they would be taking. Your point 3,4 makes it seem you are unaware of how money or wealth works - would you like it if every three years the govt just striped you of your ownership of your house ? All debt is someone else's saving, introducing a ”sabbat year” on the debt side also reflects on the ownership side - it would not be possible to own anything long term. Your point 4 would mean companies like Amazon, FB, Google would literally be impossible to create. Its very hard to distinguish between good and bad debt ( its the reason analysts are paid so well ). I agree with your last two points.

Spooky23 8y ago

#3 is exactly what happens in these cycles. Take on a mountain of debt, and inflate out of it.

geezerjay 8y ago

> Only take on debt or issue bonds in your own currency. That means that the borrower would control how much he owed, as governments of nations with their own national currency are able to devalue their currency. Understandingly, potential lenders do frown upon that possibility. Similarly, lenders don't accept judicial arbitration in the jurisdiction that the lender controls.