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Snugglybear

Money Is Debt, And We're Heading For Another Crash

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Broadly sound though he fails to mention the roles that shadow banking and globalisation have played and continue to play in our national decline.

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In the fiat world in which we live, crashes are caused by credit bubbles (deliberately inflated or otherwise) popping. Housing is more often than not the culprit.

People like the feeling of "being rich" especially on just paper. It's highly addictive and the fiat monetary system is ideal. No wonder the ancient world had debt jubilees.

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Its completely false though, as it always negates to mention the level to which private organizations are indebted to other private organizations and simply concentrates solely on the debt interactions between the private and public sectors.

ie, it ignore's approximately 4/5ths of reality.

What it does say is not wrong, but it's very limited. What disturbs me is that the guardians conclusion from it seems to be 'look how irresponsible Osbourne wants the private sector to be - lets ensure the public sector is equally irresponsible.'

We know how damaging throwing money at mortgage lending has been, throwing money at the NHS doesnt seem to result in much else. Higher salaries, higher inefficiency, falling productivity.

The real goal must be making sure the quarterly debt loads added by either, never stray more than about 0.4% from the zero line (ie, around long run productivity growth) anything above that, and you have inefficiency/inflation.

The only way to achieve that is to have a highly capitalist economy where all debts are expunged the moment they go bad and creditors are left out of pocket (IMO a very desirable thing, but highly unlikely in a democracy) or else the termination of debt as money, which hopefully is possible.

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The only way to achieve that is to have a highly capitalist economy where all debts are expunged the moment they go bad and creditors are left out of pocket (IMO a very desirable thing, but highly unlikely in a democracy) or else the termination of debt as money, which hopefully is possible.

That is the solution, on both points implemented. But because we have regulatory capture, the creditors (banks) will never allow their "assets"(which they conjured for free out of thin air) to be written off. It is the job of the taxpayer to protect them, secured via the banks lobbying and buying off the govt. That is fascism and that is our lot.

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In the fiat world in which we live, crashes are caused by credit bubbles (deliberately inflated or otherwise) popping. Housing is more often than not the culprit.

or tulips.

or train line.

it would be dog poo if the newspaper told people it would make them rich

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Its completely false though, as it always negates to mention the level to which private organizations are indebted to other private organizations and simply concentrates solely on the debt interactions between the private and public sectors.

ie, it ignore's approximately 4/5ths of reality.

What it does say is not wrong, but it's very limited. What disturbs me is that the guardians conclusion from it seems to be 'look how irresponsible Osbourne wants the private sector to be - lets ensure the public sector is equally irresponsible.'

We know how damaging throwing money at mortgage lending has been, throwing money at the NHS doesnt seem to result in much else. Higher salaries, higher inefficiency, falling productivity.

The real goal must be making sure the quarterly debt loads added by either, never stray more than about 0.4% from the zero line (ie, around long run productivity growth) anything above that, and you have inefficiency/inflation.

The only way to achieve that is to have a highly capitalist economy where all debts are expunged the moment they go bad and creditors are left out of pocket (IMO a very desirable thing, but highly unlikely in a democracy) or else the termination of debt as money, which hopefully is possible.

You can't equate the apocalyptic folly of the mortgage market with the alleged productivity shortcomings of the NHS. They're on different scales altogether.

Fact is, we already have a highly capitalist economy. That's the problem. Banks and non-banks alike are permitted to create money and dispose of nonperforming loans in shadow markets and tax avoidance jurisdictions far beyond the reach of any regulator. Until these supra-legal iniquities are addressed there can be no meaningful change.

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The idea of the government running a surplus is one of those notions that look superficially appealing unless you think through the implications- just like the idea that a country is like a big household in which-if they chose- everyone could stop spending and save instead- overlooking the fact that in this household one members spending is another members income.

I think Graeber is wrong in one respect though- the idea that our money supply is created via the creation of corresponding debt is totally alien to majority of the population, who see the two as diametrically opposed ideas.

One of the great ironies of our age is the fact that so many people spend their lives worrying about- and trying to amass- money, without the slightest understanding of what money is and how it is brought into existence.

How many people would continue to regard their debts as a moral obligation if they really understood that the bank they borrowed from simply created that debt at the stroke of keyboard?

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Broadly sound though he fails to mention the roles that shadow banking and globalisation have played and continue to play in our national decline.

Judging by some of the comments, even the high level stuff seemed beyond most. Heavens don't complicate their minds further.

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That OBR HP prediction graph is mental

Probably more what they hope will happen.

Their household income vs mortgage debt graph may be rather generous too. This is for disposable income......

Is the UK’s household debt to income ratio the highest in the world?

https://fullfact.org/factchecks/is_uk_household_debt_to_income_ratio_highest_in_the_world-2986

imf%20-%20household%20debt%20as%20percen

Edited by onlyme2

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Nevertheless, government actions are based on OBR forecasts - that's why the OBR was set up.

It's a target.

And totally mental.

When the system collapses the perpetrators hope they will have left the stage with enough loot not to worry.

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