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Economy
In reply to the discussion: Stock Market Watch, Tuesday July 30, 2013 [View all]xchrom
(108,903 posts)20. If you think you know what 'debt' is, read on
http://www.theguardian.com/commentisfree/2013/jul/29/think-you-know-what-debt-is
'None of the mainstream parties are offering any radical or innovative solutions to deal with the root causes of chronic debt. They simply offer versions of huge debt, carefully disguised in complex jargon.' Photograph: John Kobal Foundation/Getty Images
Few people understand what debt is. We may understand the scaled-down metaphors that politicians serve up "household debt", or "maxed-out credit cards". But the core issues relating to debt on a larger scale the interaction between public and private, its circular and illusory nature, its connection to money creation are too complex for most people to get their heads around.
And yet, these are critical points in informing the debate of how to deal with debt. A recent ComRes poll revealed that only 6% of the public understand that Britain's public debt is continuing to rise by £600bn during the course of this administration, to be precise and is due to hit £1.4tn by 2015. By ignoring the real root causes, because they are too complex or esoteric or just plain boring, and focusing instead on fictional Romanian migrants and benefit fraudsters with drawn curtains, we deny ourselves any possibility of finding real solutions.
Fewer still seem to be asking the question: to whom do we owe this money, exactly? Even taking the government's "household in debt" comparison, any debt advice service would recommend making a list of creditors so that one may assess where high-interest urgent obligations are, the possibility of consolidation, restructuring or default, negotiated solutions in short, an overview. Most importantly, such an overview would permit shrewd, critical analysis of how one ended up in this position and how to prevent a repeat. By avoiding the analysis, we condemn ourselves to sleepwalking into the next crisis and the one after that.
A global view is a good place to start in order to understand the illusory nature of debt. At the end of last year, according to the CIA factbook, the accumulated external world debt was $72.8tn. At the same time the gross world product (the total of countries' GDPs) was $71.8tn. Quite a milestone, you might think, all countries globally owing more externally than they produce. Yet, this is gross debt, meaning if A owes B $100 and B owes C $100 and C owes A $100, it shows as $300 cumulative debt when, in truth, it cancels itself out. On a broader view therefore, since all this money is owed to entities within this global community, it could just as credibly be said that "the world owes this money to itself", and so owes nothing.
'None of the mainstream parties are offering any radical or innovative solutions to deal with the root causes of chronic debt. They simply offer versions of huge debt, carefully disguised in complex jargon.' Photograph: John Kobal Foundation/Getty Images
Few people understand what debt is. We may understand the scaled-down metaphors that politicians serve up "household debt", or "maxed-out credit cards". But the core issues relating to debt on a larger scale the interaction between public and private, its circular and illusory nature, its connection to money creation are too complex for most people to get their heads around.
And yet, these are critical points in informing the debate of how to deal with debt. A recent ComRes poll revealed that only 6% of the public understand that Britain's public debt is continuing to rise by £600bn during the course of this administration, to be precise and is due to hit £1.4tn by 2015. By ignoring the real root causes, because they are too complex or esoteric or just plain boring, and focusing instead on fictional Romanian migrants and benefit fraudsters with drawn curtains, we deny ourselves any possibility of finding real solutions.
Fewer still seem to be asking the question: to whom do we owe this money, exactly? Even taking the government's "household in debt" comparison, any debt advice service would recommend making a list of creditors so that one may assess where high-interest urgent obligations are, the possibility of consolidation, restructuring or default, negotiated solutions in short, an overview. Most importantly, such an overview would permit shrewd, critical analysis of how one ended up in this position and how to prevent a repeat. By avoiding the analysis, we condemn ourselves to sleepwalking into the next crisis and the one after that.
A global view is a good place to start in order to understand the illusory nature of debt. At the end of last year, according to the CIA factbook, the accumulated external world debt was $72.8tn. At the same time the gross world product (the total of countries' GDPs) was $71.8tn. Quite a milestone, you might think, all countries globally owing more externally than they produce. Yet, this is gross debt, meaning if A owes B $100 and B owes C $100 and C owes A $100, it shows as $300 cumulative debt when, in truth, it cancels itself out. On a broader view therefore, since all this money is owed to entities within this global community, it could just as credibly be said that "the world owes this money to itself", and so owes nothing.
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xchrom
Jul 2013
#12
"In the end, the choice rests with Mr. Obama. The facts are entirely on Ms. Yellen’s side."
Demeter
Jul 2013
#15