Public Debts in % of the GDP - Page 2 - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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By Paradigm
#13746114
Bosnjak wrote:Why has Greece such troubles and Japan not?

Simple: Japan controls its own currency, whereas Greece is subject to the Euro. Greece is therefore more comparable to a US state than a sovereign country. If the state of Texas had the kind of public debts Greece has, it'd be in trouble, too. Unlike the EU, however, the US government has enough consolidated central power to make sure it doesn't suffer the same fate.
By Kman
#13746118
Paradigm wrote:Simple: Japan controls its own currency, whereas Greece is subject to the Euro.


Share with me the great benefit of this please.

Paradigm wrote:Unlike the EU, however, the US government has enough consolidated central power to make sure it doesn't suffer the same fate.


Tell me the magical thing which makes a large country of 300 million (like the US) different from a smaller country of 10 million (Greece). How exactly does ''centralized power'' make the economic situation of a country better?
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By Paradigm
#13746137
Kman wrote:Share with me the great benefit of this please.

A country with its own sovereign currency never has to default on its debts, unless those debts are owed in foreign currency. It can simply move money from the debit column to the credit column. That's the beauty of credit money. It then can use taxation to avoid any inflation this might otherwise cause.

Tell me the magical thing which makes a large country of 300 million (like the US) different from a smaller country of 10 million (Greece). How exactly does ''centralized power'' make the economic situation of a country better?

The thing that makes the US different is, as I already explained, the fact that it is sovereign in its own currency. So when speaking of centralized power, I am not talking about US vs. Greece. I'm talking about US vs. EU. The US has much stronger political union than the EU, and therefore would be much more capable of getting its act together if Texas found itself in Greece's situation. The federal government can even take on the debts of the states, as was Alexander Hamilton's solution for the state debts after the American Revolution. See, I know that magic is about the only thing you can understand, but there's nothing magical about this at all. It's simply common sense. Maybe you'll magically gain some reading comprehension skills, but I doubt it.
By Kman
#13746753
Paradigm wrote:A country with its own sovereign currency never has to default on its debts, unless those debts are owed in foreign currency. It can simply move money from the debit column to the credit column. That's the beauty of credit money. It then can use taxation to avoid any inflation this might otherwise cause.


Using a printing press to pay off your interest payments is a form of default since it lowers the value of the currency being printed which causes the lender to get back less purchasing power than he gave out originally.
Also taxation doesnt do jack shit against inflation unless ofc the government starts destroying the money that it collects in taxes but what government in human history has ever done that?

Paradigm wrote:The thing that makes the US different is, as I already explained, the fact that it is sovereign in its own currency. So when speaking of centralized power, I am not talking about US vs. Greece. I'm talking about US vs. EU. The US has much stronger political union than the EU, and therefore would be much more capable of getting its act together if Texas found itself in Greece's situation.


So in your world ''getting your act together'' = rewarding irresponsible behavior? :roll:

Paradigm wrote:The federal government can even take on the debts of the states, as was Alexander Hamilton's solution for the state debts after the American Revolution.


Yes reward states for spending more money than they have, then you will just encourage them to do it again, what a brilliant plan. :moron:

Paradigm wrote:See, I know that magic is about the only thing you can understand, but there's nothing magical about this at all. It's simply common sense. Maybe you'll magically gain some reading comprehension skills, but I doubt it.


The only one believing in magic here is you, you are the one who thinks you can print money into an economic system and not have it create inflation (as long as the government shuffles it around which magically makes this money disappear). This sort of thinking is about as logically sound as thinking you can pump air into a ballon forever without having it burst.
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By valormae
#13750535
@Bosnjak
Greece is a currency user. Japan is a currency issuer.

In the former case, your debt is denominated in whatever foreign currency you're beholden to. Thus, you have external constraints and can become insolvent.

In the latter, your debt is denominated in your own currency. In this case, insolvency is never a matter of ability to pay on the debt, but rather willingness to pay.
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By Takkon
#13750548
Kman, when you print more money, this causes inflation. When you tax people, this causes deflation since money is being pulled out of circulation. If you disagree with neither of those statements, then you are essentially agreeing with what paradigm is saying.
By Kman
#13750554
Takkon wrote:Kman, when you print more money, this causes inflation.


Correct.

Takkon wrote:When you tax people, this causes deflation since money is being pulled out of circulation.


If the government spends this money on paying out pensions or the wage of some bureaucrat then it does not get taken out of circulation, the only way for taxation to be deflationary would be if the government taxed people and then destroyed the money or put it into a vault somewhere to not be spent, but what government actually does that these days?
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By Takkon
#13750563
If the government spends this money on paying out pensions or the wage of some bureaucrat then it does not get taken out of circulation, the only way for taxation to be deflationary would be if the government taxed people and then destroyed the money or put it into a vault somewhere to not be spent, but what government actually does that these days?

Pensions and wages are a portion of government spending, of course. The point is though that when government receives taxes and does not inject those taxes back into the money supply, then it's not injected back into the supply of money. Pretty self-evident, I'd say. Plus, you are not considering that what you are describing is exactly what the fed does, that is they are constantly injecting and removing money into the economy to correct for deflation and inflation respectively. It's probably not an easy thing to figure out, which is why they have experts that figure out what the proper ratio is and what the proper action is at a given point of time.

Assuming fiat money, that's just how you make it work, and as paradigm outlined there are certain advantages to doing that.
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By Bosnjak
#13752951
My Opinion is Japan is far overrated, the Japanese have huge debts. A shrinking and aging population. The retirement system will collapse.


Japan sounds alarm on birth rate

The Japanese government says urgent policy changes are needed to persuade women to have more children.

Japan currently has one of the lowest birth rates in the world. Discrimination in the workplace and poor government policies have been blamed for deterring many Japanese women from having children.


But the government says that unless the trend is reversed quickly, the shortage of children risks doing damage to the economy.


The decline in Japan's birth rate is so severe they have invented a word for it - 'shoshika', meaning a society without children.

Unless women here start having more babies, the population in Japan is expected to shrink more than 20% by the middle of this century. Nearly half would be elderly, placing impossible burdens on the health and pension systems.
http://news.bbc.co.uk/2/hi/4065647.stm




And now Fokushima.
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By Rei Murasame
#13753033
It's better to have the downward population size adjustment now, rather than postponing it until desperate times later on. Looking at the big picture, an ageing population is a good sign because it means the ridiculous baby boom is finally being corrected.

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