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Why Paying Off The National Debt Won't Work.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

debt isnt the problem

its the settlement of credit thats the problem...money just circulates.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

This appears to be correct. When a loan is made and repayed someone else has to borrow money into the economy so that the interest can be paid.

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This appears to be correct. When a loan is made and repayed someone else has to borrow money into the economy so that the interest can be paid.

no. money is only needed to settle.

any amount of credit can be issued to settle minor details like interest. limited only by law.

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Guest DissipatedYouthIsValuable

Oh come on, this has been done to death.

Non-interest bearing money creation.

There you go, done.

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Guest Steve Cook

To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact.  This interest portion appears to be paid off but is in reality merely shifted to others in the economy.*  Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio.  In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio.  Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong.  The idea of paying off the national debt under the current system is a smokescreen.   What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.  

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

Yep

The debt can never be repaid because it would require new growth and new issuance of new debt to do so. The days of growth are over.

It's not going to end well

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Yep

The debt can never be repaid because it would require new growth and new issuance of new debt to do so. The days of growth are over.

It's not going to end well

Will we still be allowed to sing or dance if we want to?

p-o-p

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Guest Steve Cook

Will we still be allowed to sing or dance if we want to?

p-o-p

In the long run yes. In the medium run, I wouldn't be surprised if the answer to your question is no.

Edited by Steve Cook

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In the long run yes. In the medium run, I wouldn't be surprised if the answer to your question is no.

I'm older than most posters so it doesn't look good for me. Glad to know the kids will be OK though.

p-o-p

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This 97% - not doubting - just wonder how you worked it out?

If the Govt reaches a surplus in tax revenues and decides to buy back Gilts in reverse auctions - not with printed dosh, but with actual receipts - how does the interest still remain or get shifted to others in the economy?

Does your Malthusian growth-limit assertion relate to oil or something else? Could you work me through that one as well?

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Guest Steve Cook

This 97% - not doubting - just wonder how you worked it out?

If the Govt reaches a surplus in tax revenues and decides to buy back Gilts in reverse auctions - not with printed dosh, but with actual receipts - how does the interest still remain or get shifted to others in the economy?

Does your Malthusian growth-limit assertion relate to oil or something else? Could you work me through that one as well?

Primarily oil and the other hydrocarbons. However, hydrocarbons are implicated in the processing of all other resources and so, in effect, the decline of hydrocarbons equals the decline of most other resources at the same time.

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Primarily oil and the other hydrocarbons. However, hydrocarbons are implicated in the processing of all other resources and so, in effect, the decline of hydrocarbons equals the decline of most other resources at the same time.

I wouldn't worry about it tbh. Man has invented a million ways to overcome logical problems such as this, it's this talent alone that has made us so successful as a species. As long as the market is free to run without too much interference from the state I dount even the decline of hydrocarbons will hold us back, even if it does prove to be the apocolyptic scenario that you suggest there's nothing that can be done anyway apparently, so again, no need to worry.

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Guest Steve Cook

I wouldn't worry about it tbh. Man has invented a million ways to overcome logical problems such as this, it's this talent alone that has made us so successful as a species. As long as the market is free to run without too much interference from the state I dount even the decline of hydrocarbons will hold us back, even if it does prove to be the apocolyptic scenario that you suggest there's nothing that can be done anyway apparently, so again, no need to worry.

You seem unclear in your thinking here.

Do you think that there is not a problem looming or do you think that there is a problem looming but there is nothing to be done so eat, drink and be merry for tomorrow....?

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I wouldn't worry about it tbh. Man has invented a million ways to overcome logical problems such as this, it's this talent alone that has made us so successful as a species. As long as the market is free to run without too much interference from the state I dount even the decline of hydrocarbons will hold us back, even if it does prove to be the apocolyptic scenario that you suggest there's nothing that can be done anyway apparently, so again, no need to worry.

one way nature deals with a shortage of resource is by allowing the consumer to die out.

works every time.

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What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

Spot on.

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one way nature deals with a shortage of resource is by allowing the consumer to die out.

works every time.

There is no shortage of resource, total oil production may be decreasing (it may even be inecreasing) but oil isn't the only form of energy available.

It would be dirt cheap if it wasn't taxation, indicating an abundence.

Edited by Chef

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Spot on.

Money has to be debt based, think about it. Why would we want something that indicated how wealthy we were? The very wealth itself - food, cars, houses etc - would be more than sufficient.

Money is just a form of debt and there's nothing fundamentally wrong with that, as long as people are getting into debt out of their own free will.

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Guest DissipatedYouthIsValuable

That is not the issue. Principal goes out the front door, interest goes out the back. All assets and liabilities net off to zero at all times. Just don't worry about it.

The issue as I have said many times before and has now become mainstream is one of BALANCE between trading entities.

It's the amount going out the back and the relative autonomy that this removes from the majority of the population that is the problem.

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Guest DissipatedYouthIsValuable

Money has to be debt based, think about it. Why would we want something that indicated how wealthy we were? The very wealth itself - food, cars, houses etc - would be more than sufficient.

Money is just a form of debt and there's nothing fundamentally wrong with that, as long as people are getting into debt out of their own free will.

State and media control of psychology is not developing free will.

Where are the compulsory school lessons on money creation and real economics?

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Primarily oil and the other hydrocarbons. However, hydrocarbons are implicated in the processing of all other resources and so, in effect, the decline of hydrocarbons equals the decline of most other resources at the same time.

And the answer is.....................?

And to get people to belive in the solution?

Stevie boy, why the feck do you think governments invented mmgw?

At the end of the day you have always made your position clear, you want capitilism to fail. You are clever enough to figure out the models failings but constantly ignore the solutions.

Man will find a way of dealing with the issue of finite resources, jeepers we have endlessly talked about some of the technological solutions and even this week we learn that we can now 'create' life. Bugs, that could unleash tremendous potential not least the ability to 'create' fuel are just one of many solutions.

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It's the amount going out the back and the relative autonomy that this removes from the majority of the population that is the problem.

That's nothing to do with money creation though. Bog standard taxation and state borrowing are mostly to blame for this.

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State and media control of psychology is not developing free will.

Where are the compulsory school lessons on money creation and real economics?

Statist solutions to statist problems, was it ever thus?

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Guest DissipatedYouthIsValuable

Statist solutions to statist problems, was it ever thus?

Ok, so you advocate having a dim population to plunder? As has happened.

Relatively I'd rather have kids at school not blind to economic reality, instead of, for example having compulsory religious education.

Edited by DissipatedYouthIsValuable

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Money created as debt and inflation of the money supply is a way to stop hoarding and put money to use.

Otherwise it would just sit around doing nothing and people would hide it from you to stop you collecting taxes.

shame the people who issued all the credit are now hoarding it the real stuff.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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