is it possible to be a global grant bovey?

ninky_2

Thrugelmir wrote: »

The UK no longer has the benefit of the British Empire to generate wealth.

that doesn't make sense as an excuse for borrowing. if we genuinely had no means of generating wealth then our credit rating would already be shot, wouldn't it?

ninky_2

ILW wrote: »

Sounds like you are advocating the end of all public spending and a "look after yourself" state. Surpised to hear that from you.

i'm full of surprises.

but not the "look after yourself" state. more a ground up co-operation / equilibrium than a top down interventionist.

ILW

ninky wrote: »

surely that's not the real reason the government borrows money? i was assuming it was to grow the economy. there's not point in just borrowing money to pay for stuff you can't afford anyway. no logic in that whatsoever.

Wish you had said that to Gordon Brown ten years ago.

ILW

ninky wrote: »

i'm full of surprises.

but not the "look after yourself" state. more a ground up co-operation / equilibrium than a top down interventionist.

It would never work due to human nature. Even now there are many that chose to just live off the effort of others.

ninky_2

ILW wrote: »

It would never work due to human nature. Even now there are many that chose to just live off the effort of others.

the point with free market capitalism of the model we have now is that there is a tendency for money (ergo power) to be concentrated after a time (e.g. the power of the corporate etc). combine that with the nanny state and you encourage freeloading (why bother working if you feel like a slave and can get money for free). however if you allow the natural check of the collective force of labour to offset the collective force of capital you massively reduce that imho.

i think it's no suprise that the demise of unions has gone hand in hand with the rise of benefits as lifestyle.

personally i'd do away with unions in the public sector (you can't have the public as workforce vying against the public as governance) but reintroduce collective bargaining to the private sector. i'd be more than happy to have just about everything run by the private sector if the limits on the collective power of labour were removed.

Generali

ninky wrote: »

so why are we more worried about the state of our credit national credit rating than the state of our public services / economic situation of the general population?

it sounds like state bankruptcy is preferable to a generation of economic hardship.

Well the easiest way to avoid default (countries can't go bankrupt although you often see the term used) is to avoid getting into debt in the first place.

There really is no good reason for the UK to have such a massive level of debt right now. For decades, UK Governments have spent money without taxing enough to provide the funds to pay for what they're spending. This isn't an anti-Labour rant, Tory Governments have done the same thing. At present the UK issues 30 year debt. Today's textbooks will still be being paid off long after they've fallen apart!

The trouble with a state default is the knock-on effects. You asked before who owned the bonds. Well the owners fall into 3 main groups: banks (banks hold the largest part of their reserves in Gilts), pension (and other investment) funds and annuity providers.

If the UK Government did a Full-Bovey and just said, "We're not paying" then annuity payments, the vast majority of which go to pensioners, would cease, UK banks would be instantly insolvent as most of their reserves would be suddenly worthless and pension funds would have a lot less in the pot than they thought they had.

ninky_2

Generali wrote: »

If the UK Government did a Full-Bovey and just said, "We're not paying" then annuity payments, the vast majority of which go to pensioners, would cease, UK banks would be instantly insolvent as most of their reserves would be suddenly worthless and pension funds would have a lot less in the pot than they thought they had.

could the annuity providers not just move their money before that happened?

(i guess the problem is there isn't as much pillow talk between the treasury and pension funds as between grant and anthea).

Thrugelmir

ninky wrote: »

that doesn't make sense as an excuse for borrowing. if we genuinely had no means of generating wealth then our credit rating would already be shot, wouldn't it?

We are where we are today for reasons.

For example. BP was born out of the oil fields in Persia (Iran). The UK Government having the major shareholding from 1914 to 1977 when it started to reduce and ultimately sell its entire holding. For the next 30 years the benefit of this has flowed in the UK's coffers in terms of taxation revenues and dividend income into pension funds as the Company expanded.

Generali

ninky wrote: »

could the annuity providers not just move their money before that happened?

Who would they sell to? It may sound like a daft thing to say but for every seller there must be a buyer.

ILW

Ninky

I think the point is that defaulting on the countries debt is not likely to improve public services or the economic situation of most. It would be very tough for many.