Nervousness from Scotland Yard

[The_Equalizer]

Or you could argue that the above benefits were bought with illusory wealth created by an out-of-control financial sector (encouraged by the govt) and that since the bubble has burst and the liabilities have been transferred to the public sector, today's young people will end up paying for them in the future through higher taxes and weaker public services, with no chance of ever obtaining those benefits that older generations enjoyed at their expense.

Not that I'm arguing that of course.

I have a sneaky feeling that no one has any real handle on the amount of paper money/debt that's actually floating about out there. Ironically, a lot of this has been made possible because of the rise of computing power.

Then again, if you look in terms of history we really have never had it anywhere near as good as this.

[Ignis Fatuus]

I have a sneaky feeling that no one has any real handle on the amount of paper money/debt that's actually floating about out there. Ironically, a lot of this has been made possible because of the rise of computing power.

Then again, if you look in terms of history we really have never had it anywhere near as good as this.

A bit of historical perspective on debt would be useful too. For example, when Macmillan used the phrase "never had it so good" in 1957, UK debt was substantially over 100% of GDP, and about twice what it is now.

Freamon, you could argue that. I'm listening. But merely to state that something was bought with "illusory" wealth, is hardly an argument that it was paid for by someone else. All money wealth is illusory.

[Freamon]

A bit of historical perspective on debt would be useful too. For example, when Macmillan used the phrase "never had it so good" in 1957, UK debt was substantially over 100% of GDP, and about twice what it is now.

Indeed, UK debt peaked at over 200%, but this was just after WW2 - the money spent had been used to win a war, and the post-war reconstruction pushed GDP growth to bring the debt back down. Very different situation now, much harder to see where that kind of growth would come from.

Freamon, you could argue that. I'm listening. But merely to state that something was bought with "illusory" wealth, is hardly an argument that it was paid for by someone else. All money wealth is illusory.

Not all money wealth is illusory. Some of it is backed up by real, actual wealth (goods, services, knowledge etc). But in a credit bubble, money wealth rises far more quickly than the real wealth that backs it up (people borrow from the future by taking on debt). Normally, these debts have to be paid back by those that borrowed them. This time around, they won't be - the liabilities have been transferred to the state, meaning that those that borrowed the money will simply walk away, and leave tomorrow's taxpayers holding the bag.

[The_Equalizer]

A bit of historical perspective on debt would be useful too. For example, when Macmillan used the phrase "never had it so good" in 1957, UK debt was substantially over 100% of GDP, and about twice what it is now.

Freamon, you could argue that. I'm listening. But merely to state that something was bought with "illusory" wealth, is hardly an argument that it was paid for by someone else. All money wealth is illusory.

That haven't had it so good bit was more a reflection of the present day standard of living, partly based on cheap energy and advances in technology. Macmillan's statement was indeed correct, however, Europe's growth through the European Coal and Steel Community had been even more impressive.

[DimPrawn]

Indeed, UK debt peaked at over 200%, but this was just after WW2 - the money spent had been used to win a war, and the post-war reconstruction pushed GDP growth to bring the debt back down. Very different situation now, much harder to see where that kind of growth would come from.


Not all money wealth is illusory. Some of it is backed up by real, actual wealth (goods, services, knowledge etc). But in a credit bubble, money wealth rises far more quickly than the real wealth that backs it up (people borrow from the future by taking on debt). Normally, these debts have to be paid back by those that borrowed them. This time around, they won't be - the liabilities have been transferred to the state, meaning that those that borrowed the money will simply walk away, and leave tomorrow's taxpayers holding the bag.

Stick around, you talk sense.

[TimberWolf]

Stick around, you talk sense.

Everyone talks sense for the first few posts.

[DimPrawn]

Everyone talks sense for the first few posts.

**** off, I never did.