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how to pay for this (globally) when its all over



im not an economist but couldnt every recognised country in the world agree to say inkect the equivelent of 100% GDP into their economy and then devalue their currency by 50%? If this was done globally then the exchange rates would remain at status quo (i think) so each country shows no net impact. It means that they can effectively write off the one-off costs the are incurring to both maintain the economy now and the likely ongoing costs once some form of normality returns but with a much higher unemployment rate.

Im sure there are a few people of NSC who are either good at explaining economics or are great accountants that can (probably) blast me with maths why this wont work but surely it would be better than the world all going into recession when they may have a away to avoid the worst of it with something like this approach.???
 


beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,265
you have to devalue your currency against another, so everyone cant do that. injecting large% of GDP in some ways is what they are doing, in other ways could do more and yet other ways could lead to rampant inflation.
 


Weststander

Well-known member
NSC Patreon
Aug 25, 2011
63,407
Withdean area
Haven’t governments borrowed off the gilt markets for this, which on the other side of the deal, includes 100’s millions of individuals globally directly or via their pension schemes/ISA’s, or owed to cash-rich states such as Norway and Kuwait.

That’s real debt that needs repaying, or at least servicing the interest payable.

Only 1970’s levels of inflation could shrink that overnight, but it would crush the savings and pension dreams/income of half the country.

There’s no such thing as a free lunch. Except for grocery shoplifters.
 


yxee

Well-known member
Oct 24, 2011
2,521
Manchester
Two downsides to this plan. 1. You double the price of everything in shops, and nobody can pay their bills/buy food anymore. 2. You bankrupt a huge amount of investors in the country, which includes pension funds etc.

I think this is called inflating your way out of debt and it is possible if the national government control both the debt issuance and monetary policy. That excludes quite a lot of countries.
 


knocky1

Well-known member
Jan 20, 2010
12,948
im not an economist but couldnt every recognised country in the world agree to say inkect the equivelent of 100% GDP into their economy and then devalue their currency by 50%? If this was done globally then the exchange rates would remain at status quo (i think) so each country shows no net impact. It means that they can effectively write off the one-off costs the are incurring to both maintain the economy now and the likely ongoing costs once some form of normality returns but with a much higher unemployment rate.

Im sure there are a few people of NSC who are either good at explaining economics or are great accountants that can (probably) blast me with maths why this wont work but surely it would be better than the world all going into recession when they may have a away to avoid the worst of it with something like this approach.???

Most exchange rates now float on the global market apart from a few fixed exchange rates such as , Morocco and one or two others.

A good Wilson devaluation cannot be played with floating rates since 1976 and would, as you say, only achieve parity if all were to be dropped together.

It’s going to be a bouncy tightrope.
 






Machiavelli

Well-known member
Oct 11, 2013
16,560
Fiveways
It’s just going to take a very very long time to pay back. The debts we racked up in WW2 took decades to clear. No need for austerity, just a long payback term.


http://news.bbc.co.uk/1/hi/uk/6215847.stm

Well, this is the best answer so far. What's happening is that there's a massive increase in government debts. In the short term, the government will pay for that but, you don't need a Tory minister to tell you that it's not the government's money, and it will need to be repaid. The OP has at least had the foresight to pose a question that has been missing. The last spike in government spending has been paid for by public service provision, which has severely depleted the NHS as supply has not kept up with demand. The disabled were cruelly hit by austerity, ditto local government, social care (impacting on the NHS) and much else besides.

Public services are cut to the bone, and without extremely radical and unpalatable measures (abolishing pensions, privatising the NHS), this is not something that can stand up to a further wave of austerity. That leaves taxes, which will need to be increased. Ideally labour/income should be kept away from this as far as possible, as this is what will get us out of this crisis. After four decades of the redistribution of wealth from the poor to the rich, redistribution needs to move in the other direction. That leaves two sources:

-- taxes on assets, and even better the global wealth tax proposed by Piketty, who should be regarded as the leading economist at present
-- taxes on carbon to address the climate crisis -- as one example, everyone gets a flight 'ration' (eg a mid-distance return flight a year), and thereafter taxes escalate rapidly
 


beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,265
-- taxes on assets, and even better the global wealth tax proposed by Piketty, who should be regarded as the leading economist at present
-- taxes on carbon to address the climate crisis -- as one example, everyone gets a flight 'ration' (eg a mid-distance return flight a year), and thereafter taxes escalate rapidly

dont let a crisis go to waste eh? i dont know who'll pay for assets when markets and economies have been decmiated, and tax on carbon flights etc, is the last thing the travel indstury needs. its fine if you dont want those industries to return, because they are as good as gone, but i dont see where the jobs are replaced anytime soon. what you propose will exacerbate recession and prolong recovery.
 




knocky1

Well-known member
Jan 20, 2010
12,948
dont let a crisis go to waste eh? i dont know who'll pay for assets when markets and economies have been decmiated, and tax on carbon flights etc, is the last thing the travel indstury needs. its fine if you dont want those industries to return, because they are as good as gone, but i dont see where the jobs are replaced anytime soon. what you propose will exacerbate recession and prolong recovery.

Yes. Unfortunately dealing with Climate Change will be put aside as the world struggles to pick up and has to deal with social unrest.
 




bhafc99

Well-known member
Oct 14, 2003
7,051
Dubai
I'd plump for outlawing the parasitical web of shell companies and offshore tax havens that only exists to help companies hide mind-boggling amounts of money that would otherwise be taxable, but, hey, that ain't gonna happen. So let's slaughter public services and tax the average person some more.
 




Machiavelli

Well-known member
Oct 11, 2013
16,560
Fiveways
dont let a crisis go to waste eh? i dont know who'll pay for assets when markets and economies have been decmiated, and tax on carbon flights etc, is the last thing the travel indstury needs. its fine if you dont want those industries to return, because they are as good as gone, but i dont see where the jobs are replaced anytime soon. what you propose will exacerbate recession and prolong recovery.

You've conveniently neglected that there are giant pools of wealth sloshing around the system, which have been created in the last few decades, in no small part because the rate of return on capital has exceeded growth rates. This is why an extremely progressive global tax on wealth is the best answer, as Piketty has been proposing for a long time. If you read him, you might enhance your understanding of economics, moving it away from the neoliberal bubble.
The airline industry is still operating, and will be able to handle an aggressive tax on frequent flyers. They might be 'rationalised' as a result of CV19, but they've achieved remarkable growth in the last half century.
 


Machiavelli

Well-known member
Oct 11, 2013
16,560
Fiveways
I'd plump for outlawing the parasitical web of shell companies and offshore tax havens that only exists to help companies hide mind-boggling amounts of money that would otherwise be taxable, but, hey, that ain't gonna happen. So let's slaughter public services and tax the average person some more.

Yes, spot on, the precursor to a global wealth tax is that there is transparency, and a wealth register. These tax havens, shell companies, etc thrive on the basis of anonymity.
 


nicko31

Well-known member
Jan 7, 2010
17,523
Gods country fortnightly
I think we can't rule out some countries making raids on bank deposits, it happened in Cyprus back in 2013 and I suspect it will happen again.

In the UK I'd be surprised if we ever saw that but we could see an annualised wealth tax. Or a property taxes maybe, in this country such taxes are pretty low. You might pay £3k p.a for a penthouse in Chelsea, its very little

In the US for example some states charge in excess of 1% annually on property or land values. That might even encourage downsizing for empty nesters which can't be a bad thing...
 




beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,265
You've conveniently neglected that there are giant pools of wealth sloshing around the system,

wealth is in assets, buildings, stocks, bonds, etc. there is very little in cash sitting around doing nothing. personal wealth of the very rich is tied up in business and their assets. if you apply a tax that means less cash for investment, less growth. if you want to tax the billionaire out of existance as Piketty proposes, you might spread some wealth from top 0.1% to 1%, you might also destroy the wealth as you go. there might be an appetite for some taxes, not by following dressed up socialist ideals to take everything in the state.

the airline industry is mothballing thousands of planes, parked up on airfields across the country, no flights, no passenger taxes, no jobs for tens of thousands of staff. follow on is the tourism industry, med countries will be hit hard by loss of that sector if theres no travel. that remarkable growth wiped out in a season with nothing to replace it.
 
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Machiavelli

Well-known member
Oct 11, 2013
16,560
Fiveways
wealth is in assets, buildings, stocks, bonds, etc. there is very little in cash sitting around doing nothing. personal wealth of the very rich is tied up in business and their assets. if you apply a tax that means less cash for investment, less growth. if you want to tax the billionaire out of existance as Piketty proposes, you might spread some wealth from top 0.1% to 1%, you might also destroy the wealth as you go. there might be an appetite for some taxes, not by following dressed up socialist ideals to take everything in the state.

the airline industry is mothballing thousands of planes, parked up on airfields across the country, no flights, no passenger taxes, no jobs for tens of thousands of staff. follow on is the tourism industry, med countries will be hit hard by loss of that sector if theres no travel. that remarkable growth wiped out in a season with nothing to replace it.

Piketty isn't proposing to tax billionaires out of existence. You obviously haven't read him, so don't attribute things to him that patently are not the case.
Of course wealth isn't sitting around underneath mattresses. The whole point of capitalism is to put capital to work, and the wealthiest understand that better than most. Your whole argument on a wealth tax is just bizarre (why would it only go from the top 0.1% to the top 1%, for instance?).
But you haven't even offered an alternative. I get it that you don't want the richest to pay, because you're their most effective cheerleader on here. So, what does that leave: the poor? Are you going to be honest enough to admit that, or are you claiming that there is nothing to repay?
 


Simster

"the man's an arse"
Jul 7, 2003
54,110
Surrey
Piketty isn't proposing to tax billionaires out of existence. You obviously haven't read him, so don't attribute things to him that patently are not the case.
Of course wealth isn't sitting around underneath mattresses. The whole point of capitalism is to put capital to work, and the wealthiest understand that better than most. Your whole argument on a wealth tax is just bizarre (why would it only go from the top 0.1% to the top 1%, for instance?).
But you haven't even offered an alternative. I get it that you don't want the richest to pay, because you're their most effective cheerleader on here. So, what does that leave: the poor? Are you going to be honest enough to admit that, or are you claiming that there is nothing to repay?

Fully agree. What annoys me is that his argument is always that the wealthy don't have money floating around, it's all tied up in capital. Er, we KNOW. But capital assets can be sold if they are needed to pay tax.

I underpaid my tax last year and the HMRC had the temerity to tell me I still owed some money. When I said "I'm sorry, it's all tied up in houses and cars", they didn't say "ah well that's that then". Funnily enough, they still expected their money, and if I needed to liquidate my assets, that was no concern of theirs.
 


Billy in Bristol

Well-known member
Mar 25, 2004
1,409
Bristol






Harry Wilson's tackle

Harry Wilson's Tackle
NSC Patreon
Oct 8, 2003
49,341
Faversham
Haven’t governments borrowed off the gilt markets for this, which on the other side of the deal, includes 100’s millions of individuals globally directly or via their pension schemes/ISA’s, or owed to cash-rich states such as Norway and Kuwait.

That’s real debt that needs repaying, or at least servicing the interest payable.

Only 1970’s levels of inflation could shrink that overnight, but it would crush the savings and pension dreams/income of half the country.

There’s no such thing as a free lunch. Except for grocery shoplifters.

Just when I thought I was winning....

My pension is fully paid up. Would you suggest I carry on working, as I had intended, and keep my head down, or rush to take the maximum allowable tax free lump sum now before it is Maxwelled by the zeitgeist, and keep my fingers crossed that whatever I will be able to draw monthly, later, won't be half a pint of cat piss?
 



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