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But if we have to borrow money to expand the economy then we not only have the debt to deal with at a later date but we have the interest on top of it to compound (scuse the pun) the problem in the future.If the government were borrowing the cash to invest in huge infrastructure projects then there might be a case for it but they seem to be just trying to keep the engine running at the moment. We have to have the pain at some point. Now is as good a time as any.
I'm not disagreeing with this Im just saying its not as simple as we must always live with in our means and never borrow money.
The creation of banking in renaissance Italy and the ability to borrow money in the hope of increasing future revenue is one of the main reasons Europe managed to economically pull ahead of civilisations.
The creation of banking in renaissance Italy and the ability to borrow money in the hope of increasing future revenue is one of the main reasons Europe managed to economically pull ahead of civilisations.
If you ask me the Medici's have a lot to answer for.
growth can not be sustained indefinitely, which by virtue of the limitations of our little planet
But resources dont have to be physical that can be knowledge based as advances in technology are made hopefully we can do more with less.
There might well be a point in the future were technological advances fail to support human populations levels but we cant be sure when this will be.
Our entire economic model is based on never ending growth, it has to be or we will eventualy default on our debts as all money is intrisically created from debt. Borrowing more just perpetuates the problem. There really is no other way our of it other than to shrink the economy to a point where it's value is based on the material wealth we can create. Everyhting else is just delaying the inevitable
Ah - the no growth society - I can buy into that but from the green point of view ( how many more cars and washing machines do we need?)- however that is a radical realignment of the economy far beyond what is being done here.
scu98rkr - I think we are thinking along the same lines here, I just believe that inevitably we are going to have to suffer a huge readjustment, and the longer we wait, the worse it is going to be. We can mortgage our futures to the hilt if we like but we no longer have the option of enslaving half of the world to ensure that our books balance. We are going to have to get used to being a much poorer, much smaller and much less thrusting little country.
From what I understand until fairly recently banking was backed by something - gold, silver, etc. With the introduction of fractional reserve banking those clever people in the city have been able to leverage more and more, as a result a lot of their balance sheets are based on debt. A tipping point has to be reached where the debt can never be repaid. IMO we are at or close to that point, which is when large scale defaults occur, perhaps at a sovereign level (see Greece, Portugal etc).
I think that's what Cameron's govt are trying to address.
But resources dont have to be physical that can be knowledge based as advances in technology are made hopefully we can do more with less.
I agree, but the bottom line is you can't eat ideas and food is rapidly becoming one of the major issues we have to deal with.
Sorry I am so argumentative at the moment. It must be my time of the month.
Natural part of the housing bubble cycle I'm afraid. Nothing to get too worked up about really.
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TandemJeremy - Member
Double Dip is certainly the fault of the Condems - no doubt at all. (If it happens - not that its here yet)
Under Labour the recovery had started but was clearly fragile...
There's an iceberg sized hole in the Titanic that's our economy. Changing the government was never going to make any difference.
Hopefully this govt or the next Labour govt will fix it.
By the way, there's a shortage of lifeboats analogy too. Sorry.