Tag Archives: deficit

Sunday 4/8/2019


This Sunday on Facebook: It’s impossible to separate money from inflation in a fiat money world, then it is also impossible to separate money from the gold standard if the rate of exchange is determined by the State.

Money, it’s a crime
Share it fairly, but don’t take a slice of my pie
Money, so they say
Is the root of all evil today
But if you ask for a rise, it’s no surprise
That they’re giving none away

Pink Floyd’s lyrics, “Share it fairly but don’t take a slice of my pie“, hold as true today as nearly 50 years ago when the song was written. A ‘slice of my pie’ is always the issue. In my post of 2011, I wrote that the war reparations of WWI that were imposed on Germany 100 years ago caused the resignation of John Maynard Keynes from the British delegation. In Keynes’ book The Economic Consequences of the Peace Keynes pointed out that the principle of accumulated wealth based on inequality was a vital part of the pre-First World War order of Society and ‘progress’ as it was understood then. Echoing a principle common in todays world that it is unnatural for a population minority to accumulate such huge wealth when so few enjoyed the comforts of life.

The hyperinflation brought about by The Weimar Republic, compounded by the Treaty of Versailles a 100 years ago, being tempered by the thought that it couldn’t happen to money in the UK. Of course I didn’t count on the Bretton Woods Agreement introducing fiat money to the world in 1971.  In my naivety (I was very young at the time), I assumed that politicians acted as the representative of their electorate. Instead the State’s public debt is a common function of all working economies. There has been an increase in the debt to GDP ratios throughout the world in past decades and yet The U.S. Dollar Still Dominates Global Reserves.

Perhaps it is time that the eccentric heroine of Christopher Isherwood’s novella Sally Bowles is resurrected — thought I doubt very much that any new terms will be invented for the inflation created by the State in a fiat money world.

Part of the fascination of Weimar Berlin lies in the mirror it holds up to our own time. In Cabaret, fictional Nazis beat up the gay hero and kill cabaret owners who dare to criticise, or simply to make people laugh at, pomp and stupidity. If the musical is at last being staged in a Berlin that never made much of Isherwood, then it may be because the producers want to emphasise alarming parallels. A newly vibrant German and European capital, Berlin today has record unemployment and recession is a returning threat. Some of the young have embraced the violent right, with its hatred of foreigners and permissiveness, and parade menacingly through the streets. Wicked joys (2004)

 

Sunday 28/7/2019


I did consider withdrawing this post, but it has made me look at ‘Measuring Worth‘ in a new light and is useful to me. Specifically it made me consider how complex the issue of inflation actually is in a fiat money world. Especially in the light of the Retail Price Index and the Consumer Price Index that comprise the items making up the UK’s ‘shopping baskets’.

The best that I could do was to measure the value of one pound (UK) using three sequential periods from 1947 until 1970 and from 1972 until 2018. I missed out 1971 as it was the year that fiat money was introduced into the global economy. Even so the cost of inflation to the consumer for a basket of goods not included in the RPI or CPI indices was hard to identify. This is particularly true of groceries that are considered to be a necessary expenditure. Food is approximately 10% of the basket depending on the percentage variability of the other included items.  The following notes below point out that measurements of inflation are based on a fiscal policy that is related to the RPI, CPI indices.

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UK Pensions & Politicians


This week on Facebook: Politicians in the UK (and elsewhere) apparently assume that economic recovery is achievable through austerity and a reduction in public debt. However, a self-serving governing elite ensure that deficit financing ensnares us all while they remain immune to the austerity measures imposed. This is particularly true of pension inequality when UK members of parliament have their pensions determined by a notionally¹ Independent Parliamentary Standards Authority (IPSA). Read more of this post

Cassandra on Money & Debt


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Cassandra on the greatest illusion!


¯This week on Facebook: The ascendancy of unconstrained finance has always been a feature of wealth and poverty, exacerbated in 1981 (and since) by the cost of a social welfare programme. With deficit financing used to increase the inevitable shortfall in government budgets and the cost being borne by a fiscal policy that is an increasing burden on the taxpayer already burdened with government financial errors.

The greatest illusion held in the UK and becoming prevalent globally, is that the State will always provide a social welfare programme that mitigates its users from the effects of any austerity.

State prediction of economic growth have not been realised and the general public have, of recent years, mostly been subjected to austerity. This austerity is created by debts encouraged by The City and low incomes encouraged by State fiscal policy.

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Welfare on a Global Scale?


This week on Facebook: The 1948 Universal Declaration of Human Rights by the United Nations (UN) makes reference to social security and the economic, social and cultural rights of ‘the common people’¹. The UN’s writing of economic rights first is to my mind quite deliberate, in that without them any social and cultural rights look set to fall. However, finding a meaningful definition of economic and cultural rights has been difficult and resulted in my resorting to podcasts. While the podcasts have the titles ‘Economic Rights’ and Cultural Rights in the 20th Century, both lead to the question of human rights (4).

The European Union (EU) attaches great importance to the interdependence of all human rights and consider economic, social and cultural rights as part of a social welfare program that may well constrain the development of the EU (5). These issues also constrain the actions of the United Nations (UN) to a degree but are an essential part of any Group of 20 (G20) social welfare programmes, where the ratio of gross domestic product (GDP) to any social welfare programme that a G20 State has affects the forecast of future economic growth.

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Public Investment?


This week on Facebook: In 2008 I wrote an article about privatisation under a New Labour government, in which The Guardian newspaper figured prominently. Some eight years later I am still writing about the sale of pubic assets, with the media on the left now writing in support of a ‘Labour’ opposition party and highly critical regarding the sale of public assets. At least this time around The Guardian has been more honest, if still remaining somewhat circumspect↔ about the part that the New Labour Administration played in the sale and funding  of public assets (1). Read more of this post

Cassandra on debt


This week on Facebook: I can’t think of an answer to a financial dilemma constantly driven by political imperatives and am not so conceited that I would ever try to suggest one¹Regression at my age is a common occurrence and my diffuse dissatisfactions increase day by day, with my belief that the world “is going to hell in a handcart”. On becoming an octogenarian next May what other view would I hold! Perhaps my interest in history is an expression of that regression. I constantly regard events as being a case of “one step forward two steps back” and history replete with stories of debt.  Read more of this post

Cassandra on World Debt


This week on Facebook: I am repeating myself here, in my 2011 post with the title ‘A Universal Debt!’ I recalled, “That someone looked into world indebtedness and facetiously drew the conclusion that The Earth must be in debt to the rest of The Universe. This was because every country in the world had an external debt load (barring about three). Obviously the earth is not in debt to someone else in the universe — unless you are a conspiracy theorist — but it is true that there is a global indebtedness.  What really matters, is not the debt, but the ability to pay off the debt with the interest that the debt accrues and the consequences of any inability to do this.” [sic]

All classes alike thus build their plans, the rich to spend more and save less, the poor to spend more and work less. John Maynard Keynes (1919)

For those of us living in the Western world global debt is something that the majority of its citizens do not take seriously as no end is foreseen to the ever increasing economic growth of the Western world. Today global debt is increased and the global citizenry has increased along with its indifference to deficit finance becoming the norm. Matt’s following cartoon repeats that joke, but as Yanis Varoufakis writes in his book ‘Adults In The Room’, politicians and their financiers are using world debt to ensnare us all in a global plutocracy.

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China & USA debt


This week on Facebook:  Posting an article on ‘Xi Jinping’s Vision for Global Governance by Kevin Rudd’, prompted a colleague in the USA to remark that perhaps China was not as financially stable as was assumed and that the tariffs introduced by President Trump are to China’s disadvantage. Another colleague in the USA probably shares that view and would add to it the financial, military and political superiority that is assumed by the USA. Yet it the Western World’s hunger for a continuance of their debt based economic growth that led to the post WWII hegemony of the USA is now being challenged by China. Read more of this post

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Martin Widlake's Yet Another Oracle Blog

Oracle performance, Oracle statistics and VLDBs

The Land Is Ours

a Landrights campaign for Britain

The Bulletin

This site was created for members and friends of My Telegraph blog site, but anyone is welcome to comment, and thereafter apply to become an author.

TCWG Short Stories

Join our monthly competition and share story ideas...

The Real Economy

Blogs and stuff from Ed Conway

Public Law for Everyone

Professor Mark Elliott

Bleda

Am I my Brothers keeper?

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