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You are now throwing in irrelevant references in an attempt to support your claims.
That reference which you supplied has no relevance whatever to your comment.
conservatives are
- Thread starter transam
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That reference which you supplied has no relevance whatever to your comment.
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What are you on about. You have no clue. Please explain it to me. I am still waiting for the economic theory reference from you.
You have provided nothing so far. Still waiting
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Page?
It was you who suggested that outsourcing and identification of core business was an economic theory.
I argue that it is a strategic decision.
I provided a supporting comment from your reference about Apple's outsourcing.
D
Doggit
Yes, I have a house, and I've had mortgages, but they've only ever been ones that I can afford. They were for a set time, and paid off at the end of that term. Govenment debt seems to be more akin to a credit card whereby the borrowing limit keeps going up to keep the inflated lifestyle going.
The housing crash in America was caused by lending to people that couldn't aford to live within their means. The Uk defecit is running at 89.3% of GDP, but no bank would ever allow you to run your personal lifestyle at that level, so why do government think it's okay. And whilst we're not as bad as some, that still doesn't justify anything. We are currently paying back interest on the debts at £40bn a year, and thats money that could go towards desperately needed services. The recent governments have traded debt for growth, and it's a house built on poor foundations.
But if we haven't got the resouces because we're living beyond our means, then there aren't the resources to allocate. You seem to be advocating a "borrow to be able to continue spending" policy, and ignore the consequences.
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As Doggit said.
Most homeowners get a mortgage to bring forward their desired lifestyle to the present, with the intention of fully paying it off.
They also mostly do so, with the intention to be able to service that debt.
Governments do not seem to ever intend to even reduce their debt levels, let alone eliminate them.
Most homeowners get a mortgage to bring forward their desired lifestyle to the present, with the intention of fully paying it off.
They also mostly do so, with the intention to be able to service that debt.
Governments do not seem to ever intend to even reduce their debt levels, let alone eliminate them.
Plus, a mortgage isn't really a real debt; it's more hire purchase where, if you default, the goods are repossessed.
Governments reduce their debts by allowing inflation to diminish their value.
D
Doggit
There's no question that that's a way of looking at it, but it still needs paying back, and the interest is still a heavy bruden.
That did happen with the American war loans, but that was a fixed amount that didn't keep increasing, but yes, it was pretty worthless when it finally got paid off.
There is also the column headed "written off".
Doesn't that also effectively apply to personal debt too though?
D
Doggit
It depends on the term if the debt, and if it's being paid off on a regular basis, in which case the effect is negligable. If the debt were frozen, and then paid off at the end of a set period, then the effect would be magnified.
Personal debtors do not have the ability to devalue the currency.
Governments do.
They can also issue bonds with no maturity date (for example, War Loan issued to finance WWI, which was recently repaid when market interest rates fell below the rate on the bonds)
Interest rates on your savings are currently less than half the inflation rate, so your savings are being eroded.
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D
Doggit
But how does that help. If you've borrowed from a foreign nation, then you have to pay even more back. And if it's an internal debt through the issuance of bonds, then the value of the debt is reduced as well as the value of the currency.
On War Loan, the UK government paid its patriotic citizens an interest rate below market rates for nearly a hundred years, then repaid at par.
So the £10 your great-grandad contributed in 1914 to buy shells would have been worth £751.53 in 2004 if it had kept pace with inflation. Instead, the War Loan he left you in his will was redeemed at £10.
source: http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx
Inflation averaged 4.9% a year.
So the £10 your great-grandad contributed in 1914 to buy shells would have been worth £751.53 in 2004 if it had kept pace with inflation. Instead, the War Loan he left you in his will was redeemed at £10.
source: http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx
Inflation averaged 4.9% a year.
That's why I used the word "effectively". Although the personal debtor can't set inflation, they do benefit from it.
Both I and the government borrow at an interest rate.
Both of our debts are diminished by inflation.
I aim to pay off my total debt burden, at some point.
While the government may pay off some individual debts, its total debt burden appears to be unendingly increasing.
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