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Interesting article in the Guardian written in 2004, not only does it confirm the amount of 0's for the trillion, lol, which says Sash was right, it also give a bit of hindsight into how seriously for-warned we have been that things were getting worse but being constantly ignored and how much worse things have actually got in 5 years, far worse than most people would have probably thought imaginable.
Interesting article in the Guardian written in 2004, not only does it confirm the amount of 0's for the trillion, lol, which says Sash was right, it also give a bit of hindsight into how seriously for-warned we have been that things were getting worse but being constantly ignored and how much worse things have actually got in 5 years, far worse than most people would have probably thought imaginable.
Mama Mia Thank you Sash and Detmah, good job I'm sitting down
If I've now got it right, 1.5 trillion pounds equalls £1000,000,000,000,500,000,000,000. A somewhat unpleasant thought for tomorrows generation My personal view is, sack the whole useless lot with no index linked pensions. For years I've criticised people who did not vote, now I think I owe them an apology, there was no point. May I suggest this thread be copied to our elected leaders - MPs and Councillors ?
at an extremly rough gues I would say thats within an order of magnitude of the sum of whole nations mortgages, wich for example is like 20 million houses at £75k each.
where has this money actually gone though ? ie it must of finaly ended up somewhere.
i certainly havnt got it, do we have any suspicious looking trillionars here in the UK ?
It's not "real" money. It's presumed equity. It only becomes real money for the brief period between when you sell this house and buy the next. As houses around you sell for more, your equity goes up, and when the prices go down, your equity goes down. The problem is amplified when you have a mortgage company who has loans on one side of their books, and the value of the homes on the other. When the value of the homes go down, their books get out of whack and they have to come up with cash to balance the books.
So while the economic and accounting principals that create and support the concept of equity are quite real, equity itself is quite ephemeral.
Thanks for the correction Lexxys, is there really anyone clever enough outside the world of finance to calculate what the next generation owe ?
I don't think there is anyone inside or outside of the world of finance or world economics capable of calculating exactly where the worlds finance go next, estimations have been so wrong so often in the last twelve months that it surely means that any future estimating is purely guess work.
Many of the leading economists have recently been stating that things were starting to level out, yet yesterday saw both the ftse and down-jones drop at a rate that even a decompression chamber couldn't help with... Bloody noses and the bends all round after yesterday methinks.
It's about as reliable as asking Punxsutawney Phil about weather, in fact... With Phil having pretty much a 50-50 chance of getting it right, i'd say the odds would be stacked seriously in the wee beasties favour.
"I don't think there is anyone inside or outside of the world of finance or world economics capable of calculating exactly where the worlds finance go next, estimations have been so wrong so often in the last twelve months that it surely means that any future estimating is purely guess work"
Exactly This puts me back on my hobby-horse, cut Government spending ruthlessly so as to act as some kind of insurance against the worst effects of possible and complete disaster.
what makes you think that will have the effect you desire ?
it would put a lot more people out of work for a start.
history may have lots of examples which suggest it might work but the conditions we face now I think are rather different to conditions in the past.
and for the reasons Det said I now think of it as close to a 50/50 chance.
generally the issue of big government or small government is whether to give control of spending a considerable amount of money to the public and the free market or to spend it from a central source.
obviously essential services cant be readily changed and to cut back on things like education or law and order would be a huge mistake. health care is also a joke, its spent so inefficiently, spending more here would actually save money for the whole country, as long as it isn't just spent on extra middle managers.
also I think the problems we face now are due to the free market instability and so I don't think its wise relying on the market to spend it.
to cut back on things like education or law and order would be a huge mistake. health care is also a joke, its spent so inefficiently
At no time have I suggested any sort of cut back in essential services Read my proposals again at the top of this thread and you will see that there would be a lot more money available for these services That's why I didn't mention things like education, health care etc..etc.. Really meow !
Last edited by Detomah; 03-03-2009 at 15:40..
Reason: fixed broken quote
Interest Payments. The cost of paying interest on the government’s debt is very high. In 2008 Debt interest payments will be £31 billion a year (est 2.5% of GDP). In 2009, they will be £35 billion (similar to defence budget). Public sector debt interest payments could be be the 4th highest department
And i would imagine that is before all the bank bailout money is taken into consideration, since some of it is money we haven't paid out yet, just money the Government has promised to pay out if/when bank loans/mortgages are defaulted on.
I'm also not 100% certain how up to date that page is, the date at the top says 22 Jan 2009, but it has been updated since, i'm just not sure when.
At no time have I suggested any sort of cut back in essential services Read my proposals again at the top of this thread and you will see that there would be a lot more money available for these services That's why I didn't mention things like education, health care etc..etc.. Really meow !
Perhaps, but you seem to ignore the fact that the gov't is one of the biggest employers and spenders in the economy. Any significant cut back would make the current situation worse. And if it's not a significant change, then I'm missing your point.
It's one of the most difficult parts of stabilizing the economy, or your own finances - spend more when the economy is doing poorly, and save more when it's robust.
The whole recession and boom thing is cyclical, you could almost set your clock to it. Regardless of what legislation is put in place or taken away boom and bust happens.
The problem with this one is that there was denial for at least the past 4-5yrs or so. The housing market was already too inflated by 2005 and people had 2 choices, either have a loan to value mortgage of 100% or more or do not buy a house. Either option eventually would have led to a crash in the market as first time buyers have to enter the market to keep it going, and the rest have to sell their houses to 1st timers to move on.
Anywho, the banks are largely to blame, both in America and UK. Usually finance follows a certain set of rules and formulas, and they do work very well once understood, the problem was that banks were selling part of the lons to other banks at in flated prices, and those banks selling same loans on and on, until at some point someone wants their money back. Fanny May and Freddie Mac were at the end of the line as well as the start, it was a sort of "what goea around, comes around" they probably ended up buying up their own original debt after it passed through many other hands. A classic recession scenario.
Now I know very little of banking or finance, but i like to think i have some common sense. And that tells me the recession was always going to come, not just because of poor practices but because it is almost impossible to achieve steady continuous growth in perpetuity. Once again we are a product of "greed is good", deregulation while often helps, also hinders. A sad indictment on all of our governments short sightedness and indeed of business who in the west generally cannot accept gradual growth.
I understand the idea that you have to continually grow to keep static, but the concept for me is a false positive, it isnt simply supply and demand, we still demand more houses than ever but no-one is willing to supply, but there is a recession despite that same demand.
The solution? There are again 2 options;
1) do nothing and let the market correct itself, it will always correct itself, it did in the 1930's, 60's, 70's 80's and 90's. Indeed these past 10yrs have been almost a re-run of the '70's decade almost to the letter. But we dont know how long it will take, typically 2-3yrs from diagnosis.
2) Intervene; throw trillions of dollars into the market and shore up corporations deemed to be too important to lose, the idea being it will shorten the time of the recession, or slow the rate of recession. But there is very little evidence it works because how do you know?
Capitalism is fine, i have no problem with it, I want to get rich too, but it is not acceptable for a corporation to generate growth on debt, i dont know who these people are who run companies but whatever they learned at Harvard or Yale etc it seems to be obviously wrong. Capitalism supposed to be the generation and retention of wealth, unfortunately most businesses havent got that idea and believe it is only through acquisition can wealth and growth be had.
I dont hold that view, for me a profit is a profit is a profit. A $1 profit is a profit, shareholders are very purile and short sighted if they believe that the share value must increase to realise a profit. A share value is only worth anything when you sell them or have another company take it over, otherwise a shareholder should be happy with the dividend, or in some cases no dividen if it is rigth for a company to improve.
My final thoughts are that we can and should have a social capitalist system. I know that many right wing conservative Americans baulk at the idea of sharing the wealth as if its a communist thing and the antithesis freedom etc, but they couldnt be more wrong. Ensuring that you have a population of people who are receiving a fair days pay for a fair days work should be the goal, everyone is entitled to a certain standard of life. It's in the declaration of human rights (though that is now eroded by certain religious nonsense, and is another topic altogether), and it's in the US constitution and European directives and charters. Why the hell shouldn't people share in wealth?
Lastly, my solution would be do nothing, yes, it would mean a very hard time, and maybe big corporations fail, but they need to fail, it is they that caused the problem in the first place. Regulation needs to be enforced, government must arbiter business and control it. Remember Enron? Business leaders are responsible for all apsects of that business and must be liable for failure, bonus must not be paid for failure, nor stupid retirement agreements. The excuse that you cant get the best people unless you pay the best salaries is a ludicrous argument, it is precisely these highy paid idiots that caused the problem.
Let them fail, or nationalise companies and run them to a standard rigourously checked.
At no time have I suggested any sort of cut back in essential services Read my proposals again at the top of this thread and you will see that there would be a lot more money available for these services That's why I didn't mention things like education, health care etc..etc.. Really meow !
sorry lol, i just got that from view the couple of comments you made most recently, it was a while since i read the first post and its too much text to read again.
however a great many attempts and promises have been made to simplify government etc, however these have nearly always involved great expense and been largely unsuccessful.
if you think you could do so much better you should run for prime minister lol, however we all know ability to run things has nothing to do with success in politics.
My main point was about whether big government or small government is the right way to go, it wasn't really meant as a criticism as such but a real question.
Perhaps, but you seem to ignore the fact that the gov't is one of the biggest employers and spenders in the economy. Any significant cut back would make the current situation worse. And if it's not a significant change, then I'm missing your point.
Not at all, I'm only talking about the top jobs / managerial appointments / MPs etc. Apart from size, there is one distinct difference between us and America, proportionally they are far less 'top-heavy' than us. Only France is worse than us for non-producers of wealth. Indeed, I would expect more factory floor employment to emerge with my proposals. If you look up the grades and appointments I'm talking about cutting, not one of them has a remunaration package uder £70, 000 per anum. Most are in excess of £90,000.
Not at all, I'm only talking about the top jobs / managerial appointments / MPs etc. Apart from size, there is one distinct difference between us and America, proportionally they are far less 'top-heavy' than us. Only France is worse than us for non-producers of wealth. Indeed, I would expect more factory floor employment to emerge with my proposals. If you look up the grades and appointments I'm talking about cutting, not one of them has a remunaration package uder £70, 000 per anum. Most are in excess of £90,000.
Can you run the math(s)? 1000 execs at £100,000 totals £100,000,000 (100 million). That's not going to have a significant affect on the economy one way or another.
Can you run the math(s)? 1000 execs at £100,000 totals £100,000,000 (100 million). That's not going to have a significant affect on the economy one way or another.
I completely agree that the effect of reducing the amount of execs within companies in this country would be absolutely minimal.
However, a few of these would sharp bump that figure up:
Thank you Sash and Detmah, good job I'm sitting down 
My personal view is, sack the whole useless lot with no index linked pensions. For years I've criticised people who did not vote, now I think I owe them an apology, there was no point. May I suggest this thread be copied to our elected leaders - MPs and Councillors ?
This puts me back on my hobby-horse, cut Government spending ruthlessly so as to act as some kind of insurance against the worst effects of possible and complete disaster.
That's why I didn't mention things like education, health care etc..etc.. Really meow !
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