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The Whole World is in Debt !

Discussion in 'Random Discussion' started by John Bull, Jan 26, 2011.

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  1. John Bull

    John Bull Banned Thread Starter

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    Scouts honour and hope to die - I promise this is ALL my own work. No cribbing, copying or cheating.
    ====================================================

    The thing about this subject to me is that it is so ridiculous that any educated person finds it too baffling for intelligent common sense to understand.

    Simple analogy tells me that running a country is no different to running a home, but on a larger scale and infinitely more complex, but the basic principles are the same. You spend money, either you have it, or you borrow it. If you borrow it, then the lender makes sure you pay it back by consistent threats of reprisals or legal action. It is all very clear.

    Nobody lends money unless they have the mechanism to get it back - WITH INTEREST !

    In this context, it seems that every country spends money they have not got to a tune of $57 Trillion world-wide and I have`nt a single clue where this borrowed money comes from. The US is currently showing $14 Trillion+ debt and the tiny piffling, insignificant UK a colossal debt of $1,428 Billion.

    One thing is certain, no financial fund in the whole world can sustain a deficit of that magnitude. So where does this inexhaustible amount of cash come from ? Who pays it ? How can the richest nations on Earth not afford to keep their books in order ?

    Why are the richest nations the ones with the highest debts ? Why do they have to borrow at all ? How the hell can you be the richest nation when you have the biggest debt ?
    Where do they borrow this colossal sum from ?

    Where are the lenders legal threats to regain this cash ?

    The entire picture is Mickey Mouse and more reflective of Alfred Hitchcock than a serious portrayal of the sheer artistry of financial control.

    None of the nations in the 200 listed will ever pay off their deficit, including the US. So what happens to the lost cash ? It is no more than a sick joke. Many of the debts concerning the third world are progressively written off, but written off by whom and who pays the bill ?

    Third world countries incur a huge debt - what happens ? The debt is written off and who pays ? Do the Western countries then inherit these depts and also the interest payments on them ? Why should we pay for third world despot hand-out extravaganzas which they spend on their crap military, keep their despot leaders in luxury, feed their scumbag militia`s and let their people starve? The third world will ALWAYS be the third world whilst the West keeps pumping money into their pockets - ad infinitum.

    A total world debt of $57 Trillion bucks will NEVER be paid off during the finite life of Planet Earth. The entire scenario is reminiscent of a nightmare and makes a mockery of human intelligence.

    World "economy" ? What world economy ? There IS NO world economy, just a damned big mess that nobody understands and have not a single clue how to either comprehend it or get out of it. And while the debt can be summed up at any point in time, it goes jogging on at ever increasing rates. A cumulative road to complete economical and financial destruction and the ENDGAME for civilisation. Unless we are simply playing Monopoly and finite values mean nothing.

    World Bank ? What World Bank ? Where do they get their money from ?
    Do member countries pay an annual premium just to borrow it back at extortionate interest rates ?
    The whole thing is preposterous, an unbelievable nonsense.

    I give up, but would love to hear your logical opinions on this crazy economical situation of utter crap that infests our daily lives and is actually treated as a serious subject by those in power. Holy Cow ! it is no more than a joke ! The difference is that it does not generate any laughs.


    If you feel up to it, by all means give your views.
    I suspect it is a matter of irresponsible house-keeping by all the Western nations trying to police the World and ease their consciences by looking after all the ailing third world nations. Very moral, but all it amounts to is a self inflicted wound and forcing economic suffering on their own populations.

    To cap it all ! What the hell are we doing in Iraq and Afghanistan, spending billions of dollars each month at a cost to the poor taxpayer ? To achieve what ? No wonder they gave to borrow colossal sums in order to play expensive games in other peoples countries and sacrifice thousands of US and Alliance young lives to do it.

    Verdict - LOOK AFTER YOURSELF FIRST AND IF THERE IS ANY CRUMBS LEFT OVER, GIVE THEM TO OTHERS. Rather like feeding the local pigeons.

    Have a look at :-
    http://en.wikipedia.org/wiki/List_of..._external_debt
    or
    https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html
    or
    http://www.brillig.com/debt_clock/
    or
    http://www.debtbombshell.com/



    John

     
  2. Stoner

    Stoner Banned

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    Good to see you have gone to a serious topic.
    The forum has discussed many aspects of this debt/credit issue.
    We have a member that is an economist and two lawyers experienced in economics that have addressed economic/debt issues.

    You are asking many questions ( that can be Googled) but what is your debate challenge?

    You posted this:
    Personally, I'm not very interested in a " look at this , now debate it" format.


    Is this your challenge?
    This came up earlier in debate......the tremendous State ( US ) obligations ( edit: pensions to public employees ) that are going ballistic to the point that they could bankrupt the US at a state level before the Feds become unable to pay it's own debt obligations.
    There is recent talk of Federal bailout money going to the States.
    China is also reported to be in a squeeze concerning their social security system.
    I imagine Europe isn't any better off.
    Greece is certainly in turmoil.

    That 57T debt may be quite a lowball estimate of the world's economic problems, though.

    The 'solution/result' may wind up being default and economic collapse of many nation's economies.

    As long as the public wants .....and politicians promise .....quick fixes......I doubt there will be acceptable results.
    Few want to implement long term conservative financial planning .
    Most seem to want to spend their way out of debt using credit as the mechanism.
    That's not working.
     
  3. pyritechips

    pyritechips Gone but Never Forgotten

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    First Name:
    Jim
    I also suggest John, that you use standard font size. Using such a large font for an entire post implies shouting, and it is also difficult to read.
     
  4. Gabriel

    Gabriel Account Closed

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    One of the things I noticed about debt beyond the individual, is that there is no point of certainty how and where it sprang from. That is, no one seems to stand accountable. It is like a system of some sort is set up, and everyone is out to lunch, and no one ever comes back.
    Another thing I observe (loosely) is that often another debt is stacked on the preceeding one...to remedy the previous debt. Then there is the invisible monetary base that I cannot quite grasp to begin with. That is that something must back up what is being spent...or something like that. I could never understand, and still do not why we can't just make/print more money. We can't spend it all at once simultaneously, so it is never flowing in any full force consistancy....I guess in a way borrowing is like printing extra money, and there is no real base to support it, but getting what one wants at the moment (I am talking about irresponsible borrowing, not accountable borrowing) is the goal....so I guess if I look at printing more money like borrowing what does not exist, the way I think won't work either.
    I just hope that we do not get bar codes on us to control what we do...so I aim my individual stuff at being accountable, and it is a struggle in a world of quick fixes and such.
    It is very confusing, and the facade of ownership of many of my cohorts is fading. Many either have or are literally losing it all....or at best barely staying afloat among refinancing and loans and improving properties that are losing value in hopes that those bubbles will again expand. I don't think it will help if they do, as they'll do it all over again when they feel the danger is over, and we will all fall deeper into the quagmire.
     
  5. Paquadez

    Paquadez

    Joined:
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    Perhaps nation state debt is best explained by reference to this story, written by the wonderfully amusing and tart Canadian humorist, Stephen Leacock.

    (Mods: no concern over copyright: it is freely published under creative commons on the 'Net. Paq)

    How to Borrow Money

    by Stephen Leacock

    Have you ever, dear readers, had occasion to borrow money? Have you ever borrowed ten dollars under a rigorous promise of your word of honor as a Christian to pay it back on your next salary day? Have you ever borrowed as much as a million at a time?

    If you have done these things, you cannot have failed to notice how much easier it is to borrow ten thousand dollars than ten, how much easier still to borrow a hundred thousand, and that when you come at last to raising an international loan of a hundred million the thing loses all difficulty.

    Here below are the little scenes that take place on the occasion of an ascending series of loans.

    TABLEAU NO. I

    The scene in which Hardup Jones borrows ten dollars till the first of next month from his friend, Canny Smith

    "Say, look here, old man, I was wondering whether perhaps you wouldn't mind letting me have ten dollars till the end of the month--"

    "Ten dollars!!"

    "Oh, I could give it back all right, for dead sure, just the minute I get my salary."

    "Ten dollars!!!"

    "You see, I've got into an awful tangle--I owe seven and a half on my board, and she said yesterday she'd have to have it. I couldn't pay my laundry last week, so he said he wouldn't leave it, and I got this cursed suit on the installment plan and they said they'd seize my trunk, and--"

    "Say, but Gol darn it, I lent you five dollars, don't you remember, last November, and you swore you'd pay it back on the first and I never got it till away after New Year's--"

    "I know, I know. But this is absolutely sure. So help me, I'll pay it right on the first, the minute I get my check."

    "Yes, but you won't--"

    "No, I swear I will--"

    And after about half an hour of expostulations and protests of this sort, having pledged his soul, his body, and his honor, the borrower at last gets his ten dollars.

    TABLEAU NO. II

    The scene in which Mr. McDuff of the McDuff Hardware Store in Central City (pop. 3,862) Borrows $1,000 from the local bank

    The second degree in borrowing is represented by this scene in which Mr. John McDuff, of McDuff Bros. Hardware Store (Everything in Hardware), calls on the local bank manager with a view to getting $1,000 to carry the business forward for one month till the farmers' spring payments begin to come in.

    Mr. McDuff is told by one of the (two) juniors in the bank to wait--the manager is engaged for the moment.

    The manager in reality is in his inner office, sorting out trout flies. But he knows what McDuff wants and he means to make him wait for it and suffer for it.

    When at last McDuff does get in, the manager is very cold and formal.

    "Sit down, Mr. McDuff," he says. When they go fishing together, the manager always calls McDuff "John." But this is different. McDuff is here to borrow money. And borrowing money in Central City is a criminal act.

    "I came in about that loan," says McDuff.

    The manager looks into a ledger.

    "You're overdrawn seventeen dollars right now," he says.

    "I know, but I'll be getting my accounts in any time after the first."

    Then follows a string of severe questions. What are McDuff's daily receipts? What is his overhead? What is his underfoot? Is he a churchgoer? Does he believe in a future life?

    And at last even when the manager finally consents to lend the thousand dollars (he always meant to do it), he begins tagging on conditions:

    "You'll have to get your partner to sign."

    "All right."

    "And you'd better get your wife to sign."

    "All right."

    "And your mother, she might as well sign too--"

    There are more signatures on a country bank note for one month than on a Locarno treaty.

    And at last McDuff, of Everything in Hardware, having pledged his receipts, his premises, his credit, his honour, his wife, and his mother--gets away with the thousand dollars.

    TABLEAU NO. III

    How Mr. P.0. Pingpoint, of the great financial House of Pingpoint, Pingpong and Company, New York and London, borrows a million dollars before lunch

    Here the scene is laid in a fitting setting. Mr. Pingpoint is shown into the sumptuous head office of the president of the First National Bank.

    "Ah, good morning," says the president as he rises to greet Mr. Pingpoint, "I was expecting you. Our general manager told me that you were going to be good enough to call in. Won't you take this larger chair--you'll find it easier."

    "Ah, thank you. You're very comfortable here."

    "Yes, we rather think this a pleasant room. And our board room, we think, is even better. Won't you let me show you our board room?"

    "Oh, thanks, I'm afraid I hardly have the time. I just came in for a minute to complete our loan of a million dollars."

    "Yes, our executive vice-president said that you are good enough to come to us. It is very kind of you, I'm sure."

    "Oh, not at all."

    "And you are quite sure that a million is all that you care to take? We shall be delighted, you know, if you will take a million and a half."

    "Oh, scarcely. A million, I think, will be ample just now; we can come back, of course, if we want more."

    "Oh, certainly, certainly."

    "And do you want us to give any security, or anything of that sort?"

    "Oh, no, quite unnecessary."

    "And is there anything you want me to sign while I am here?"

    "Oh, no, nothing, the clerks will attend to all that."

    "Well, thanks, then, I needn't keep you any longer."

    "But won't you let me drive you up town? My car is just outside. Or, better still, if you are free, won't you come and eat some lunch with me at the club?"

    "Well, thanks, yes, you're really extremely kind."

    And with this, quite painlessly and easily, the million dollars has changed hands.

    But even that is not the last degree. Eclipsing that sort of thing, both in case and in splendor, is the international loan, as seen in--

    TABLEAU NO. IV

    The scenes which accompany the flotation of an Anglo-French loan in the American Market, of a hundred million dollars, by the Right Hon. Samuel Rothstein of England and the Vicomte Baton Rouge de Chauve Souris of France

    This occurrence is best followed as it appears in its triumphant progress in the American press.

    NEW YORK, Friday. An enthusiastic reception was given yesterday to the Right Hon. Mr. Samuel Rothstein, of the British Cabinet, and to the Vicomte de Chauve Souris, French plenipotentiary, on their landing from the Stacquitania. It is understood that they will borrow $100,000,000. The distinguished visitors expect to stay only a few days.

    NEW YORK, Saturday. An elaborate reception was given last evening in the home of Mrs. Bildermont to the Right Hon. Samuel Rothstein and the Baron de Chauve Souris. It is understood that they are borrowing a hundred million dollars.

    NEW YORK, Monday. The Baron de Chauve Souris and the Right Hon. Samuel Rothstein were notable figures in the Fifth Avenue church parade yesterday. It is understood that they will borrow a hundred million dollars.

    NEW YORK, Tuesday. The Baron de Chauve Souris and the Right Hon. Samuel Rothstein attended a baseball game at the Polo Grounds. It is understood that they will borrow a hundred million dollars.

    NEW YORK, Wednesday. At a ball given by Mr. and Mrs. Ashcoop-Vandermore for the distinguished English and French plenipotentiaries, Mr. Samuel Rothstein and the Baron de Chauve Souris, it was definitely stated that the loan which they are financing will be limited to a hundred million dollars.

    NEW YORK (WALL STREET), Thursday. The loan of $100,000,000 was subscribed this morning at eleven o'clock in five minutes. The Right Hon. Mr. Rothstein and the Baron Baton Rouge de Chauve Souris left America at twelve noon, taking the money with them. Both plenipotentiaries expressed their delight with America.

    "It is," said the Baron--"how do you call it?--a cinch."

    EPILOGUE

    And yet, six months later, what happened? Who paid and who didn't?

    Hardup Jones paid $5.40 within a month, $3.00 the next month and the remaining one dollar and sixty cents two weeks later.

    McDuff Bros. met their note and went fishing with the manager like old friends.

    The Pingpoint Syndicate blew up and failed for ten million dollars.

    And the international loan got mixed up with a lot of others, was funded, equated, spread out over fifty years, capitalized funded again--in short, it passed beyond all recognition.

    And the moral is, when you borrow, borrow a whole lot.

    (Note: published way back in 1928: however, nothing much has changed: excepting in the size of national debts!)
     
  6. buffoon

    buffoon

    Joined:
    Jul 16, 2008
    Messages:
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    You explained it yourself nicely, a sentence or two onwards.:)

    Simply printing money is ok as long as it stays among friends. If you write me a note that you'll lend me a million and I write you an IOU by which I owe you a million, we're ok. That's what money is, the promise that somebody will pay what's denominated on the note. Then I go and buy something for a million and present your letter of intent as payment and my creditor comes to you to check on the availability of that million and you present my IOU and anyone with half a mind will tell us both to go see a good doctor. But my creditor wants to do business and won't miss an opportunity so he agrees to sell me something for 500 K if I wait a day or so and then goes off to somebody who likes fast money as well and offers him your letter of intent for 750 K (so he'll make 1 mio. on cash day, i.e. 250 k profit) and when the other guy looks dubious, my creditor goes to see Gossip Betsy down the road and gets her to say (for a fee, of course) that both you and I have always come good on our promises. Now Gossip Betsy (aka rating agency) might be a distasteful old trout, what with all the rumours she spreads, but it all ususally turns out to be true, so this other guy says ok. Then lends my creditor 750 K of which I get 500 K, Gossip Betsy gets a fee and whaddya reckon you get?

    Now replace both your letter of intent to me and my IOU with YOUR HOUSE or whatever else you had the imprudence to put up for collateral, and things begin to sound familiar. Variate this model into any direction and add as many players as you like and increase the circle infinitely.

    Last man standing wins. Not because he's such a tough guy or such a scoundrel or both. Nope, because he convinces everyone down to yourself that there needs to be someone left standing. Since if he falls, everything does. Your house gets taken BTW but you're still in debt for the rest of your life as well. So are your kids if you have any but if you don't it won't matter. Somebody'll be found.

    I was going to explain at great length the imprudence of any government simply printing more money and the galloping inflation that would incur. Forget it, you're absolutely right. Cut out the middle players, they only confuse the issue. Print directly, at least that'll shorten the agony in that everyone will be broke much faster. And it'll also topple that jerk still standing.;)
     
  7. John Bull

    John Bull Banned Thread Starter

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    @ Stoner

    Whilst I appreciate your comments as being a fine but possibly misguided contribution to these discussions, do you have to dismember everybody's post as if it was a laboratory frog ?

    Most of your highlighted items are fairly nonconstructive in subject matter and mainly amount to personal criticism. Keeps the pot boiling, but nothing more.

    John
     
  8. John Bull

    John Bull Banned Thread Starter

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    My apologies for the font size, it is certainly not intentional and I do not like it either.

    I tend to do my longish draft copies on OE6, then when OK, copy and paste onto the Forum. This huge font size is the result for this Forum only, it never has done this on all other Forums or cases of copy/paste like Emails etc. Cannot understand it.

    I use
    Tahoma
    font, size 16 on OE6. Usually the receiving end corrects this into the standard font, but not in this case. I am not going to alter my OE6, but next time will try
    Googlemail
    - I think that will be OK.

    John
     
  9. 1956brother

    1956brother

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    how long are they going to put you away for this time:D
     
  10. valis

    valis Moderator

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    heyya john.

    I realize that this was not 'at' me, but I again want to point out your logical fallacies. Stoner's arguments are both completely constructive and highly logical. His wont is to parse the argument into bite-sized nuggets; it may not be palatable to others, but it is definitely within his right in a debate to do so.

    Again, I must call into question your desire to debate, or your desire to stir the pot. Either way is perfectly fine with me; I love a good debate, and I also love to read the news. That said, reading the news is NOT a debate. Judging from what you state, I would imagine that you are possessed of the talent to be able to hold a debate. You've certainly made the statements to that fact. As yet, however, all I've seen are drive-by postings that are seriously lacking in matter, substance, and most of all, debate.

    In short, pony it up, or shut it up. :) And yes, that's merely a suggestion. It would be nice to have some fresh minds in a debate forum, but if those minds are disinclined to debate those topics that they bring up, well, I would have to surmise that those are not so fresh minds at all, would you not agree?

    A few key points that must be made, to wit:

    Stoner and I disagree on just about everything this side of which way the sun will set in the evening, so you can discount nepotism on that front.

    Buffoon and Paq have some unholy amounts of fiduciary learnings betwixt the two of them; anytime that they begin to talk about finances I realize that I am in a pond consisting of two great white sharks and a goldfish, and I'm neither of the sharks, so you may want to defer to their knowledge on the matter.

    And finally, comments such as "Most of your highlighted items are fairly nonconstructive in subject matter and mainly amount to personal criticism" are nothing more than the age-old ad hominem attack. This ties in with the statement I made earlier about wishing to debate a topic; if you wish to do so, it will take a bit more effort than that.

    peace.

    v
     
  11. 1956brother

    1956brother

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    nobody wants to cut spend, close tax loop holes, or above all raise revenue because, it will harm their constituents.

    if changes have to be made they want to start at the bottom and not at the top. changes need to be made across the board. tough choices need to be made.

    change is going to have to be forced upon the politicians in this country in order or them to truely act. they need to grow up as well.

    politicians still see debt as a piece of paper.
     
  12. Gabriel

    Gabriel Account Closed

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    If it is votes that are the catalyst for their change, than they still remain self-serving and will lapse back into whatever mode they started with. People should grow up before they serve society...not the other way around. I assume by growing up you mean take responsibility for how your actions affect others, and act according to the reflection of their expressed desires, and not just your personal ambition and pocketbook.
     
  13. Bastiat

    Bastiat

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    They get it right now and again but not to worry I'm here to correct their errors.
    ;)
     
  14. Gabriel

    Gabriel Account Closed

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    Whoa...self newsflash...I just figured out they got the word debt from the word debit...or visa versa....:eek:
    Some of us know haw many years that took. I am definitely a product of this world which is an insane asylum for the cosmos.
     
  15. Stoner

    Stoner Banned

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    Hi Gabriel :)
     
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