4 ms·

Stupid use of funds for the most part, it's not re-invested in the country, just the American stock market. It's not like they had to buy solid gold rolls royce

by Mizza 3y ago

Stupid use of funds for the most part, it's not re-invested in the country, just the American stock market. It's not like they had to buy solid gold rolls royces, but there's no reinvestment internally other than oil and fish. Norway is a hedge fund with the F-35.

paddim8 3y ago
Their economy is going fantastically. It's clearly working out for them.
- marvin 3y ago
  21% of working-age population on various forms of welfare, 33% working in the public sector and a whooping 33% working in the private sector. Taxation rates among the highest in the world. There's plenty to criticize about the Norwegian economy. The taxation of the oil wealth is definitely a great success story, but how that money is used from year to year is very much a mixed bag. We have per-capita public expenditures approximately twice those of Sweden. Average household debt at 114% of income, third place globally. We don't build housing, same as California. Oil money contributions to the national budget were approximately $6500 per capita in 2022, and on top of this we have a total taxation percentage on the order of 40% of income on average, if you do the honest calculation and look at all payments to the governments. In addition we have an energy production infrastructure that's nominally almost 100% publicly owned, but now sell electricity to citizens at EU prices (~300% markup) with the surplus going into public budgets - this is additional taxation we're not talking about. It could be worse and there are many things going right, but selling Norway as an unquestionable economic success story doesn't completely reflect reality.
matsemann 3y ago
Using it internally would not be a good idea, though. That amount of money fueled directly into the economy would make our inflation even worse than it is.
- Mizza 3y ago
  I think this really highlights the attitude - don't invest money because it might harm the money. Money is for putting in foreign assets, so that rather than a large amount of money now, you can have a small trickle of money later.
  - vidarh 3y ago
    Rather so that you can have the "small trickle" perpetually.
    - Mizza 3y ago
      Yeah, countries always have this, they're called taxpayers. If you invest in them, they can pay you more taxes than you put in. If you make their lives good, then people can even make _more_ people! Instead, Norway invests in American businesses in order to get that slow trickle, so instead of investing in their own people and industries, they have a slow trickle which can gives pension to a population in decline.
      - unyttigfjelltol 3y ago
        Maybe that's the real nub of the "resource curse"-- any effort to improve the lives of its citizens will be wrong and bad, so just invest in foreign assets and otherwise preserve things as they are.
        knodi123 3y ago
        Nasruddin was riding his donkey to the market, with his son walking along beside him. As he passed a group of travelers going in the opposite direction, he overheard one of them saying "look at this cruel old man, riding in comfort while his son has to walk." Caring very much for the opinion of others, he got off of the donkey and told his son to ride. He passed another group of travelers, and overheard one whisper "look at the silly old man, walking his life away while his young, strong son rides in comfort." He tried riding behind his son, but overheard people criticizing his cruelty towards the overburdened beast. He tried having them both walk, and was criticized for not realizing that donkeys could be ridden. Finally, in frustration, he ordered his son to help him carry the donkey. As they both struggled to lift the large and uncooperative beast, another group of travelers approached, staring at him in confusion. Before they could say anything, he shouted at them "Shut up, I don't want to hear it!"
ceejayoz 3y ago
I wish my country would make "stupid" investments to the tune of $250,000 per citizen set aside for a rainy day (or decade).
- Mizza 3y ago
  It's better than the poke in the eye, that's for sure, I just don't think it's optimal and I'm tired of the way this story gets trotted out every now and then. I think there's a middle ground between solid gold rocket cars and rainy-day austerity. Norway is quite under developed in many ways, many services you'd think would be better just aren't, once the oil gets switched off they don't have much modern industry as an alternative, which wouldn't be the problem if they spent some of the money to diversify.
  - ceejayoz 3y ago
    Oil's far more likely to taper off. A trillion dollars in the bank will cushion that transition quite well.
  - kwhitefoot 3y ago
    > many services you'd think would be better just aren't Perhaps you could enlighten us about which services are lacking and how they are so much better in those countries that just spent the North Sea oil revenue internally?
    - Mizza 3y ago
      Today, I'd pick Posten. It seems like you're a proud nationalist and I don't want to start a fight.
      - ubercore 3y ago
        Posten is a mixed bag. Ease of access at places like grocery stores, and general service is great. But delivery can often be weirdly delayed. Sometimes we get notice of bills _after_ they're due. But overall, I prefer it to the US postal service I'm used to, so it doesn't feel like a slam dunk example to me. Spend some of that money on training and paying more GPs, and you'd have my interest...
haasted 3y ago
They're probably trying to avoid some of the economic mistakes made by the Dutch when they started producing natural gas: https://en.wikipedia.org/wiki/Dutch_disease https://en.wikipedia.org/wiki/Dutch_disease
kwhitefoot 3y ago
I suspect that the people arguing here that Norway should direct that huge volume of money internally are not Norwegian residents. Those of us who live in Norway, most of us anyway, recognize that doing that would be a disaster and would just fund short term spending and fuel inflation. The UK and the Dutch just spent the money they got from the North Sea oil and at least the UK has little to show for it. Anyway, the Norwegian economy is doing just fine without it, we bounced back from COVID faster than practically everywhere else and everywhere I look there are new commercial and industrial buildings going up.
- marcosdumay 3y ago
  There must be some way that a honest government can spend a lot of money improving a country. The ideas that this decision can not be made in a hurry and that the spending can jump in size too quickly are reasonable. But the ones that there is absolutely nothing better to do with the money, and that most of it will be there in a large crisis when they need to withdraw are both ridiculous.
  - vlovich123 3y ago
    The larger your economy, the more of a financial cushion you should create and the longer your investment horizon needs to become. If you want to have a resilient society anyway. Political pressures though count against it and demagoguery can make it extremely appealing to reap short term benefits at the cost of long term investment in your own society. It’s why I was really sad to see the Canadian government give up on its Crown corporations. Sure, they got tens of billions of dollars for it. But that wealth took a really long time to acquire in the first place and the market cap of having a complete monopoly can’t have been priced in correctly (otherwise the private market wouldn’t have been all lathered up at the opportunity to take over).

by Mizza 3y ago

paddim8 3y ago

Their economy is going fantastically. It's clearly working out for them.

marvin 3y ago
21% of working-age population on various forms of welfare, 33% working in the public sector and a whooping 33% working in the private sector. Taxation rates among the highest in the world. There's plenty to criticize about the Norwegian economy. The taxation of the oil wealth is definitely a great success story, but how that money is used from year to year is very much a mixed bag. We have per-capita public expenditures approximately twice those of Sweden. Average household debt at 114% of income, third place globally. We don't build housing, same as California. Oil money contributions to the national budget were approximately $6500 per capita in 2022, and on top of this we have a total taxation percentage on the order of 40% of income on average, if you do the honest calculation and look at all payments to the governments. In addition we have an energy production infrastructure that's nominally almost 100% publicly owned, but now sell electricity to citizens at EU prices (~300% markup) with the surplus going into public budgets - this is additional taxation we're not talking about. It could be worse and there are many things going right, but selling Norway as an unquestionable economic success story doesn't completely reflect reality.

matsemann 3y ago

Using it internally would not be a good idea, though. That amount of money fueled directly into the economy would make our inflation even worse than it is.

Mizza 3y ago
I think this really highlights the attitude - don't invest money because it might harm the money. Money is for putting in foreign assets, so that rather than a large amount of money now, you can have a small trickle of money later.
- vidarh 3y ago
  Rather so that you can have the "small trickle" perpetually.
  - Mizza 3y ago
    Yeah, countries always have this, they're called taxpayers. If you invest in them, they can pay you more taxes than you put in. If you make their lives good, then people can even make _more_ people! Instead, Norway invests in American businesses in order to get that slow trickle, so instead of investing in their own people and industries, they have a slow trickle which can gives pension to a population in decline.
    - unyttigfjelltol 3y ago
      Maybe that's the real nub of the "resource curse"-- any effort to improve the lives of its citizens will be wrong and bad, so just invest in foreign assets and otherwise preserve things as they are.
      - knodi123 3y ago
        Nasruddin was riding his donkey to the market, with his son walking along beside him. As he passed a group of travelers going in the opposite direction, he overheard one of them saying "look at this cruel old man, riding in comfort while his son has to walk." Caring very much for the opinion of others, he got off of the donkey and told his son to ride. He passed another group of travelers, and overheard one whisper "look at the silly old man, walking his life away while his young, strong son rides in comfort." He tried riding behind his son, but overheard people criticizing his cruelty towards the overburdened beast. He tried having them both walk, and was criticized for not realizing that donkeys could be ridden. Finally, in frustration, he ordered his son to help him carry the donkey. As they both struggled to lift the large and uncooperative beast, another group of travelers approached, staring at him in confusion. Before they could say anything, he shouted at them "Shut up, I don't want to hear it!"

ceejayoz 3y ago

I wish my country would make "stupid" investments to the tune of $250,000 per citizen set aside for a rainy day (or decade).

Mizza 3y ago
It's better than the poke in the eye, that's for sure, I just don't think it's optimal and I'm tired of the way this story gets trotted out every now and then. I think there's a middle ground between solid gold rocket cars and rainy-day austerity. Norway is quite under developed in many ways, many services you'd think would be better just aren't, once the oil gets switched off they don't have much modern industry as an alternative, which wouldn't be the problem if they spent some of the money to diversify.
- ceejayoz 3y ago
  Oil's far more likely to taper off. A trillion dollars in the bank will cushion that transition quite well.
- kwhitefoot 3y ago
  > many services you'd think would be better just aren't Perhaps you could enlighten us about which services are lacking and how they are so much better in those countries that just spent the North Sea oil revenue internally?
  - Mizza 3y ago
    Today, I'd pick Posten. It seems like you're a proud nationalist and I don't want to start a fight.
    - ubercore 3y ago
      Posten is a mixed bag. Ease of access at places like grocery stores, and general service is great. But delivery can often be weirdly delayed. Sometimes we get notice of bills _after_ they're due. But overall, I prefer it to the US postal service I'm used to, so it doesn't feel like a slam dunk example to me. Spend some of that money on training and paying more GPs, and you'd have my interest...

haasted 3y ago

They're probably trying to avoid some of the economic mistakes made by the Dutch when they started producing natural gas: https://en.wikipedia.org/wiki/Dutch_disease https://en.wikipedia.org/wiki/Dutch_disease

kwhitefoot 3y ago

I suspect that the people arguing here that Norway should direct that huge volume of money internally are not Norwegian residents. Those of us who live in Norway, most of us anyway, recognize that doing that would be a disaster and would just fund short term spending and fuel inflation. The UK and the Dutch just spent the money they got from the North Sea oil and at least the UK has little to show for it. Anyway, the Norwegian economy is doing just fine without it, we bounced back from COVID faster than practically everywhere else and everywhere I look there are new commercial and industrial buildings going up.

marcosdumay 3y ago
There must be some way that a honest government can spend a lot of money improving a country. The ideas that this decision can not be made in a hurry and that the spending can jump in size too quickly are reasonable. But the ones that there is absolutely nothing better to do with the money, and that most of it will be there in a large crisis when they need to withdraw are both ridiculous.
- vlovich123 3y ago
  The larger your economy, the more of a financial cushion you should create and the longer your investment horizon needs to become. If you want to have a resilient society anyway. Political pressures though count against it and demagoguery can make it extremely appealing to reap short term benefits at the cost of long term investment in your own society. It’s why I was really sad to see the Canadian government give up on its Crown corporations. Sure, they got tens of billions of dollars for it. But that wealth took a really long time to acquire in the first place and the market cap of having a complete monopoly can’t have been priced in correctly (otherwise the private market wouldn’t have been all lathered up at the opportunity to take over).