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Tax is mainly Interest Payments, not for the poor or sick?


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Hat-tip to Viceroy for this link - Martin Armstrong discusses most national debt gets paid out as interest- not to the poor or sick.

It's got me thinking do we know where it goes- what do we know?

 

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39 minutes ago, TonyJ said:

When interest payments on the national debt become so large there is nothing left to spend on anything else,

This is the ticking time bomb. Everyone complains about the cuts but all I see is the national debt still climbing. 

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3 hours ago, Thorn said:

Hat-tip to Viceroy for this link - Martin Armstrong discusses most national debt gets paid out as interest- not to the poor or sick.

It's got me thinking do we know where it goes- what do we know?

 

 

Bank of England issues the debt for the interest to flow to their owners. Of course, several freedom of information acts have been refused over the years, on grounds of National Security, as to who exactly are the bond holders of the holding company, Bank of England Nominees, registered in Delaware State, US. However, the small number of families who are the majority owners are informally known, if you believe the conspiracy theories. Suffice as to say, they also have controlling interests in several of the largest Banks and Exchanges, so issuing debt is very much in their personal interests. Heavily indebted citizens and sky high land values are very much in their interests. Coincidence that several central banks around the world were given 'independence' around the same time, 20 years ago? I think not.

In the case of the UK central Bank, it did seem to fall into public ownership just after the War right up just until 1997 independence.... just as the last major WW2 debt repayments were made. Now there's a surprise.

Edited by frankvw
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Delaware is a popular PO Box address for Corporations to register, due to tax and privacy reasons specific to that state. Some of the world's largest corporations have headquartered in Delaware, while their 'Real' head office maybe somewhere else like Manhattan, London, Tokyo, etc.,

The Royal family are believed to be 'junior' directors in the company but as to the others, you can search that out easily enough from the history of the BoE, amongst other sources. It can be thought to be culturally sensitive, so it's best to research yourself as forums like zerohedge rapidly divert into other topics when the BoE and Fed are discussed in this respect. Which personally I dislike. The only issue is that indebted citizens, sky high land values and wage surppression are very much in the interests of the Bank of England as it makes their owners pretty much some of the wealthiest folk on the planet.

Under state ownership, the BoE issued debt to build infrastructure after the devastation of WW2, to rebuild the country, including a massive house building programme. Once the citizenry built the place back up again, issuing bond debt for national infrastructure was no longer a priority. Hence the large privatization of public assets and bank of england 'independence'.

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You can read online the various freedom of information acts refused over the years about BoE and BoE Nominees. The specific question that has never been answered relates to :

 

The Bank of England Act 1946 does not mention the words Own or Ownership.

According to the act, Bank of England's Stock is to be Held by for the treasury by a third party and the Bank of England must pay 25% of it's profits to the treasury.

To hold an item is not the same as owning and item. When the BoE blurb says 'wholly owned', this is questioned as to where, in any of the legal statutes, does it use the words owned or ownership. 'Wholly Owned is crouched in a bunch of legalise and provisos in their literature but they have never expilicitly shown how this relates to the wording of the statutes and its articles, which clearly never mention state ownership.

There is another act relating to the Bank of England which protects the privacy of the owners of the Bank of England and so to make the list of owners of the Bank of England public would be a violation of that act.

Edited by frankvw
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7 hours ago, TonyJ said:

When interest payments on the national debt become so large there is nothing left to spend on anything else, such as health or benefits, public spending will be forced to a complete halt.

So people calling for an end to austerity are paradoxically calling for a halt to public spending. Bizarre.

Well it's bizarre when the youth vote for parties that will spend today. Don't they get it, the tax receipts come when you are old...pension, social care, health care, subdised public sector final salary packages. Their funeral if they vote for Chile in a few decades. Boomers are grateful for your altruism. The old should like debt, they don't have to repay it.

Edited by crashmonitor
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23 hours ago, dropbear said:

This is the ticking time bomb. Everyone complains about the cuts but all I see is the national debt still climbing. 

which is why I think Sterling is set for major drops. They'll never raise base rates even if there's a mass sell off of sterling. 

That would mean that existing "benefits and pensions" will collapse in real value... but paradoxically it would make the UK a much better place for international business... 

With double digit inflation... there'll be double digit economic growth and growth in "nominal" sterling taxes coming into the government coffers to help pay down the debt. Eventually the debt as a percentage of GDP will fall massively despite being a much larger figure nominally. 

They'd probably fudge RPI to rein in index linked gilts payments.

Edited by hayder
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On 29/03/2018 at 12:43 PM, dropbear said:

This is the ticking time bomb. Everyone complains about the cuts but all I see is the national debt still climbing. 

The problem I've had with this brand of austerity is that it's ideologically driven NOT economically sensible. We've spent more hiring companies to kick sick folk off benefits than we've saved. We haven't looked at the long-term or local implication of cuts or incentives.

It's all been mind-boggling slapdash and haphazard. And on top of all that, it's been done as cheaply as possible.

No wonder it hasn't worked really isn't it?

 Even the most basic impact assessments don't seem to have been carried out.

Benefit cuts? Great. But poor people don't just eat the money. In fact the vast majority gets spent locally (and no, not just all on fags and booze).

And a lot of that ends up trickling back up to the treasury. So the real saving is never anywhere near what is trumpeted. And then MPs sit around scratching their heads as to why the economy is suddenly so sluggish and not performing as predicted....

If your math was wrong to start with the errors are only going to get further apart and more pronounced as time goes on.

Basically so much of austerity is innumeric...

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On 29/03/2018 at 11:57 AM, TonyJ said:

When interest payments on the national debt become so large there is nothing left to spend on anything else, such as health or benefits, public spending will be forced to a complete halt.

So people calling for an end to austerity are paradoxically calling for a halt to public spending. Bizarre.

But it has never happened despite libertarian loons crying out for decades. 

Most AAA sovereign debt is held in pension funds so to say it is wasted money is debatable.

Hedge funds that have basic understanding of MMT have made fortunes when vigilantes short nations that still have the printing press as they know they cannot default.

Austerity, as we know it today, has nothing to do with fiscal responsibility. It is to prevent a market attack resulting from a perceived trading opportunity that is the upshot of private banks that are too big to bail. The asset footprint of these institutions is multiples of GDP and many of the are leveraged into sovereign debt at high ratios. This is all underpinned by the same credit rating agencies that triple A rated sub prime.

And why are the banks too big to bail? Because successive governments have relied on them to furnish the economy with private debt instead of using public debt. It's come around full circle and chewed their ****. The real wealth has been pawned to private interests and rented back to us and the nation held to ransom while they made off with the cash.

 

Edited by dom
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Which party will actually fix the economy?

The Tories have privatised more things I didn't want privatised, made a bunch of people destitute, closed a bunch of libraries, and spent a load of money on nuclear weapons, on a failed computer system, and on making houses even more unaffordable.

One woman on QT was enough to get them to abandon reform of tax credits.  For some reason people don't see tax credits as a benefit - they think they are a kind of tax refund.  But they have nothing to do with how much tax you pay.  But just try telling mumsnet that.

I'd love to vote for a party willing to balance the books.  But 'austerity' ended up being the worst way to do it, and they just couldn't resist the idea that the way to win elections was to make London houses cost a million pounds each.

I'll never vote for them, now.

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On 29/03/2018 at 11:57 AM, TonyJ said:

When interest payments on the national debt become so large there is nothing left to spend on anything else, such as health or benefits,

IIRC,  according to the teaching of Nobel prize winning economists Reinhart & Roggoff , is that the point of no return for  a country's economy is when DEBT:GDP ratio reaches 90% . Britain's such factor is in the late 80% bracket (87-89?).

Should their hypothesis be correct, Britain is on the 'toast' horizon.

Both Italy and Japan make interesting academic examples of  the above.

 

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20 hours ago, ZeroSumGame said:

IIRC,  according to the teaching of Nobel prize winning economists Reinhart & Roggoff , is that the point of no return for  a country's economy is when DEBT:GDP ratio reaches 90% . Britain's such factor is in the late 80% bracket (87-89?).

Should their hypothesis be correct, Britain is on the 'toast' horizon.

Both Italy and Japan make interesting academic examples of  the above.

 

 

Public-Debt-UK_GDP.png

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58 minutes ago, dom said:

 

Public-Debt-UK_GDP.png

Nice graph. What are you trying to tell me?

 

Quote

In March 2017, UK general government gross debt was 86.7% of gross domestic product (GDP), 26.7 percentage points above the reference value of 60% set out in the Protocol on the Excessive Deficit Procedure

source : the ONS.

Quote

Carmen Reinhart, now a professor at Harvard Kennedy School, and Kenneth Rogoff, an economist at Harvard University, seemed to provide an answer. They argued that GDP growth slows to a snail’s pace once government-debt levels exceed 90% of GDP.

 

 TheEconomist

 

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On 3/29/2018 at 11:57 AM, TonyJ said:

When interest payments on the national debt become so large there is nothing left to spend on anything else, such as health or benefits, public spending will be forced to a complete halt.

So people calling for an end to austerity are paradoxically calling for a halt to public spending. Bizarre.

Bizarre indeed. They don't get it, yet its Labour policy. I don't understand why you have said you would vote Labour. You clearly understand about the national debt.

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1 hour ago, BuyToLeech said:

No nobel prize, and their work on this was discredited. 

Nobel nominees, not winners.

Quote

Nobel prize-winning economist Paul Krugman, a critic of Reinhart and Rogoff's research, also jumped into the debate late on Tuesday.

"The fact is that when you compare the results head to head, (Reinhart and Rogoff) looks very off," Krugman said on his New York Times blog of the new research published by the University of Massachusetts. "Something went very wrong, and pointing to your other results isn't a good defense."

Faulty excel spreadsheet calculations, apparently growth averages 2.2%.

No need for austerity then. Print away.! Debt to the moon. !!

 

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On 3/29/2018 at 11:18 AM, Thorn said:

Hat-tip to Viceroy for this link - Martin Armstrong discusses most national debt gets paid out as interest- not to the poor or sick.

It's got me thinking do we know where it goes- what do we know?

 

Two quick facts for the record.

1. Martin Armstrong is a convicted criminal who has spent several years behind bars for conspiracy to commit fraud. He orchestrated a a $3 billion Ponzi scheme through his investment fund, Princeton Economics International.

See here and here for details

2. The UK currently pays out only 6% of its tax receipts as debt interest. A large part of this comes straight back to the government as it holds a significant proportion of the public debt from its QE programme, therefore the true figure is even lower. source

 

pie chart.png

Edited by InlikeFlynn
added link to source of pie chart
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25 minutes ago, InlikeFlynn said:

Two quick facts for the record.

1. Martin Armstrong is a convicted criminal who has spent several years behind bars for conspiracy to commit fraud. He orchestrated a a $3 billion Ponzi scheme through his investment fund, Princeton Economics International.

See here and here for details

2. The UK currently pays out only 6% of its tax receipts as debt interest. A large part of this comes straight back to the government as it holds a significant proportion of the public debt from its QE programme, therefore the true figure is even lower. source

 

pie chart.png

Good to know many thanks InlikeFlynn

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On ‎02‎/‎04‎/‎2018 at 6:27 PM, InlikeFlynn said:

Two quick facts for the record.

1. Martin Armstrong is a convicted criminal who has spent several years behind bars for conspiracy to commit fraud. He orchestrated a a $3 billion Ponzi scheme through his investment fund, Princeton Economics International.

See here and here for details

2. The UK currently pays out only 6% of its tax receipts as debt interest. A large part of this comes straight back to the government as it holds a significant proportion of the public debt from its QE programme, therefore the true figure is even lower. source

 

pie chart.png

Oh god facts and $hit. Be off with ya.....

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