4 ms·

oh that and the worst post war debt coupled with unprecedented economic downturn..

by bayeslaw 6y ago

Traster 6y ago
I mean... the UK has been running a budget deficit since 2001, and the Uk has had record debt every year since 2007.
- bpodgursky 6y ago
  Not every bad is equally bad
  - dundarious 6y ago
    Interest rate payments are lower now than they were pre-pandemic, even though total debt has spiraled. CoE is not signaling for a return to austerity, and hopefully nobody will in future. WW2 debt was paid off even while creating the NHS, etc.
    - nprateem 6y ago
      > Interest rate payments are lower now than they were pre-pandemic For now. But some major ingredients of inflation are on the way: currency devaluation and more expensive imports, both due to a no deal/shit deal for Brexit. And if inflation goes up, interest rates will increase to try to control it (or even more government spending which will rack up even more debt). > CoE is not signaling for a return to austerity How else will we repay the enormous debt? They won't call it austerity just like they're now using the euphemism "Australia-style deal" instead of "no deal", but austerity is coming alright (that along with tax hikes).
      - disgruntledphd2 6y ago
        What debt? The Bank of England has created most of the money, there's really no-one to pay it back to. Certainly you should pay back the debt owed to external agencies, but there's no need to pay back that owed to your Central Bank. If that's too crazy, then refinancing all of the debt over 30 yrs is probably the best solution, as it provides time for the economy to recover. Conversely, given that demand from the private sector has dropped, if you introduce austerity then it will take longer to pay the debt back.
- jeofken 6y ago
  What incentive is driving this trend is democracies? In UK, America, Japan, pretty much every other western/European democracy the government debt is ever growing and money printing is only growing and growing.
  - freeone3000 6y ago
    Increased spending with no matching increase in taxes.
  - lordnacho 6y ago
    > What incentive is driving this trend is democracies? I guess you're getting at election politics? Spend money that's borrowed so you don't need to increase taxes, point at all the good things you've done. Some people think this is kicking the can down the road, but again, if the bomb doesn't explode in my hands it's fine.
  - rsynnott 6y ago
    This is incorrect. The EU as a whole shows sovereign debt to GDP falling fairly smoothly since 2014 (though it will rise this year). The UK and Japan have had static or slightly falling debt since around then too (though the UK's will _skyrocket_ over the next couple of years). The US is rising a little. Given the market for sovereign debt right now, there's no strong incentive to pay it off aggressively as long as it's not rising too sharply.

oh that and the worst post war debt coupled with unprecedented economic downturn..

Traster 6y ago

I mean... the UK has been running a budget deficit since 2001, and the Uk has had record debt every year since 2007.

bpodgursky 6y ago
Not every bad is equally bad
- dundarious 6y ago
  Interest rate payments are lower now than they were pre-pandemic, even though total debt has spiraled. CoE is not signaling for a return to austerity, and hopefully nobody will in future. WW2 debt was paid off even while creating the NHS, etc.
  - nprateem 6y ago
    > Interest rate payments are lower now than they were pre-pandemic For now. But some major ingredients of inflation are on the way: currency devaluation and more expensive imports, both due to a no deal/shit deal for Brexit. And if inflation goes up, interest rates will increase to try to control it (or even more government spending which will rack up even more debt). > CoE is not signaling for a return to austerity How else will we repay the enormous debt? They won't call it austerity just like they're now using the euphemism "Australia-style deal" instead of "no deal", but austerity is coming alright (that along with tax hikes).
    - disgruntledphd2 6y ago
      What debt? The Bank of England has created most of the money, there's really no-one to pay it back to. Certainly you should pay back the debt owed to external agencies, but there's no need to pay back that owed to your Central Bank. If that's too crazy, then refinancing all of the debt over 30 yrs is probably the best solution, as it provides time for the economy to recover. Conversely, given that demand from the private sector has dropped, if you introduce austerity then it will take longer to pay the debt back.
jeofken 6y ago
What incentive is driving this trend is democracies? In UK, America, Japan, pretty much every other western/European democracy the government debt is ever growing and money printing is only growing and growing.
- freeone3000 6y ago
  Increased spending with no matching increase in taxes.
- lordnacho 6y ago
  > What incentive is driving this trend is democracies? I guess you're getting at election politics? Spend money that's borrowed so you don't need to increase taxes, point at all the good things you've done. Some people think this is kicking the can down the road, but again, if the bomb doesn't explode in my hands it's fine.
- rsynnott 6y ago
  This is incorrect. The EU as a whole shows sovereign debt to GDP falling fairly smoothly since 2014 (though it will rise this year). The UK and Japan have had static or slightly falling debt since around then too (though the UK's will _skyrocket_ over the next couple of years). The US is rising a little. Given the market for sovereign debt right now, there's no strong incentive to pay it off aggressively as long as it's not rising too sharply.