Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Kopfkino]

2 hours ago, Rogstanley said:

Inflation will pay it off as long as UK gov can borrow at a lower rate, as it can currently. The WW2 debt was paid off the same way.

 

It's just not even true. 

 

You can either read a full paper

https://bfi.uchicago.edu/sites/default/files/research/9_Reis Paper.pdf

 

A short article on said paper

https://voxeu.org/article/will-us-inflate-away-its-public-debt

 

A really great piece of analysis that explains it well by John Cochrane

https://johnhcochrane.blogspot.co.uk/2017/04/inflating-our-troubles-away_24.html

 

Or take this article showing numerous people telling you you're an idiot

https://www.globalresearch.ca/the-idiotic-economic-theory-thats-causing-governments-to-blow-up-their-economies/5417573

 

Ricardo's further expansion to analyse what CB can do to alleviate fiscal burdens

http://personal.lse.ac.uk/reisr/papers/17-HofCB.pdf

 

And of course there is the fact that as inflation rises, the more inflation-indexed bonds (GOAT introduced them in '81 so debt couldn't be inflated away) we end up issuing, as has happened this year. 

 

And I'm sure you'll say well look it says increasing g will help this and of course we know it is absolutely concrete that a Corbyn government will deliver 10% growth every year. Or that the UK has longer weighted maturity dates than the US and would be probably the best argument(even if its noted as poor measure). Or you could try to make the argument that well it assumes the last 8 years aren't now the norm. Or you might just say well Europe is set to fair a little better, or even just well its the US not Europe. It would basically be motivated reasoning though. 

[Rogstanley]

4 minutes ago, Kopfkino said:

 

It's just not even true. 

 

You can either read a full paper

https://bfi.uchicago.edu/sites/default/files/research/9_Reis Paper.pdf

 

A short article on said paper

https://voxeu.org/article/will-us-inflate-away-its-public-debt

 

A really great piece of analysis that explains it well by John Cochrane

https://johnhcochrane.blogspot.co.uk/2017/04/inflating-our-troubles-away_24.html

 

Or take this article showing numerous people telling you you're an idiot

https://www.globalresearch.ca/the-idiotic-economic-theory-thats-causing-governments-to-blow-up-their-economies/5417573

 

Ricardo's further expansion to analyse what CB can do to alleviate fiscal burdens

http://personal.lse.ac.uk/reisr/papers/17-HofCB.pdf

 

And of course there is the fact that as inflation rises, the more inflation-indexed bonds (GOAT introduced them in '81 so debt couldn't be inflated away) we end up issuing, as has happened this year. 

 

And I'm sure you'll say well look it says increasing g will help this and of course we know it is absolutely concrete that a Corbyn government will deliver 10% growth every year. Or that the UK has longer weighted maturity dates than the US and would be probably the best argument(even if its noted as poor measure). Or you could try to make the argument that well it assumes the last 8 years aren't now the norm. Or you might just say well Europe is set to fair a little better, or even just well its the US not Europe. It would basically be motivated reasoning though. 

 

Aren’t you supposed to be a student? Haven’t your teachers told you about quality of sources yet? Because it’s pretty damn obvious you’ve just searched google for things which doubt the possibility of inflating away debt, posted them all regardless of them having extremely dubious credentials, and then sprinkled a bit of commentary around it to make it look like a structured argument. You’re fooling nobody, I’m afraid.

[Guest]

15 minutes ago, Kopfkino said:

 

It's just not even true. 

 

You can either read a full paper

https://bfi.uchicago.edu/sites/default/files/research/9_Reis Paper.pdf

 

A short article on said paper

https://voxeu.org/article/will-us-inflate-away-its-public-debt

 

A really great piece of analysis that explains it well by John Cochrane

https://johnhcochrane.blogspot.co.uk/2017/04/inflating-our-troubles-away_24.html

 

Or take this article showing numerous people telling you you're an idiot

https://www.globalresearch.ca/the-idiotic-economic-theory-thats-causing-governments-to-blow-up-their-economies/5417573

 

Ricardo's further expansion to analyse what CB can do to alleviate fiscal burdens

http://personal.lse.ac.uk/reisr/papers/17-HofCB.pdf

 

And of course there is the fact that as inflation rises, the more inflation-indexed bonds (GOAT introduced them in '81 so debt couldn't be inflated away) we end up issuing, as has happened this year. 

 

And I'm sure you'll say well look it says increasing g will help this and of course we know it is absolutely concrete that a Corbyn government will deliver 10% growth every year. Or that the UK has longer weighted maturity dates than the US and would be probably the best argument(even if its noted as poor measure). Or you could try to make the argument that well it assumes the last 8 years aren't now the norm. Or you might just say well Europe is set to fair a little better, or even just well its the US not Europe. It would basically be motivated reasoning though. 

Can you explain, in your own words, how Britain went from having it's biggest ever debt post WW2 to building council housing, an integrated education system, motorways and the nhs, whilst at the same time reducing the national debt massively?

[Webbo]

14 minutes ago, Rogstanley said:

 

Aren’t you supposed to be a student? Haven’t your teachers told you about quality of sources yet? Because it’s pretty damn obvious you’ve just searched google for things which doubt the possibility of inflating away debt, posted them all regardless of them having extremely dubious credentials, and then sprinkled a bit of commentary around it to make it look like a structured argument. You’re fooling nobody, I’m afraid.

Most of those papers were written by Economics professors?

 

No offence, if I wanted to know the ingredients of a Big Mac you'd be the first person I'd ask but when it comes to anything intelligent I'll listen to people who know what they're talking about. 

[Rogstanley]

9 minutes ago, Webbo said:

Most of those papers were written by Economics professors?

 

No offence, if I wanted to know the ingredients of a Big Mac you'd be the first person I'd ask but when it comes to anything intelligent I'll listen to people who know what they're talking about. 

And likewise if I wanted to know how to use a paintbrush I’d be straight round yours but when it comes to interpreting the validity of economic arguments i’d sooner ask my goldfish.

Edited 26 January 2018 by Rogstanley

[Webbo]

3 minutes ago, Rogstanley said:

And likewise if I wanted to know how to use a paintbrush I’d be straight round yours but when it comes to interpreting the validity of economic arguments i’d sooner ask my goldfish.

Did you actually read any of those academic papers? Have a try. We'll help you with the long words.

[Strokes]

24 minutes ago, toddybad said:

Can you explain, in your own words, how Britain went from having it's biggest ever debt post WW2 to building council housing, an integrated education system, motorways and the nhs, whilst at the same time reducing the national debt massively?

 

41 minutes ago, Kopfkino said:

 

And of course there is the fact that as inflation rises, the more inflation-indexed bonds (GOAT introduced them in '81 so debt couldn't be inflated away) we end up issuing, as has happened this year. 

 

 

[Rogstanley]

2 minutes ago, Webbo said:

Did you actually read any of those academic papers? Have a try. We'll help you with the long words.

Yeah, did you read the bit where Warren Buffett says you can inflate away debt? Should I listen to Warren Buffett, or Webbo off foxestalk. Tough one.

Edited 26 January 2018 by Rogstanley

[Webbo]

7 minutes ago, Rogstanley said:

Yeah, did you read the bit where Warren Buffett says you can inflate away debt? Should I listen to Warren Buffett, or Webbo off foxestalk. Tough one.

If you had managed more than the first couple of sentences you would also have read this;

 

Quote

 

Indeed, the whole idea that we can inflate our way out of debt trap is fatally flawed …

UBS economist Paul Donovan shows that governments can’t inflate their way out of debt traps:

The problem with the idea of governments inflating their way out of a debt burden is that it does not work. Absent episodes of hyper-inflation, it is a strategy that has never worked.

Megan McArdle points out:

It is a commonplace on the right that we’re going to have enormous inflation, not because Ben Bernanke will make an error in the timing of withdrawing liquidity, but because the government is going to try to print its way out of all this debt.

Joe Weisenthal notes that it doesn’t quite work this way:

As this chart shows, instances of declining debt-to-GDP rarely coincide with periods of inflation. If it did If it did, we’d see more dots in the lower right-hand quadrant.

The bad news for central bankers is that creating currency isn’t like, say, diluting shareholders in a company. You’re always rolling your debt, and the market’s response to an inflationary strategy is (not surprisingly) higher interest rates. It’s a treadmill, and it’s extremely hard to get ahead.

Inflating your way out of debt works if you’re planning to run a pretty sizeable budget surplus–big enough that you won’t have to roll your debt over. Otherwise, your debt starts to march upward even faster, as old notes come due, and you have to roll them at ruinous interest rates. Hyperinflation might wipe out that debt, but also your tax base.

 

Now with your BA in chip frying perhaps you could explain why you're right and they're wrong?

[Rogstanley]

3 minutes ago, Webbo said:

If you had managed more than the first couple of sentences you would also have read this;

 

Now with BA in chip frying perhaps you could explain why you're right and they're wrong?

Meghan McArdle and Joe Weisenthal are both ten-a-penny journalists. Neither of them are economists.

 

Paul Donovan’s original article is unfortunately behind a paywall, so I can’t see the context or detail behind his comments.

 

What’s the best technique for spreading paste onto the back of paper?

[Sharpe's Fox]

Me every time I open this thread

 

[Webbo]

7 minutes ago, Rogstanley said:

Meghan McArdle and Joe Weisenthal are both ten-a-penny journalists. Neither of them are economists.

 

Paul Donovan’s original article is unfortunately behind a paywall, so I can’t see the context or detail behind his comments.

 

What’s the best technique for spreading paste onto the back of paper?

You've not mentioned 

Jens Hilscher
Brandeis University

Alon Raviv
Brandeis University

Ricardo Reis
Columbia University

 

John Cochrane

Senior fellow at the Hoover Institute.

 

Pretty good sources I'd have though?

 

 

There are a few techniques, brush, roller and even a machine that'll paste the paper for you.

[Rogstanley]

8 minutes ago, Webbo said:

You've not mentioned 

Jens Hilscher
Brandeis University

Alon Raviv
Brandeis University

Ricardo Reis
Columbia University

 

John Cochrane

Senior fellow at the Hoover Institute.

 

Pretty good sources I'd have though?

 

 

There are a few techniques, brush, roller and even a machine that'll paste the paper for you.

Seems to me that the crux of the argument against inflating away debt is that government's can't create the circumstances in which debt can be inflated away without causing seperate negative consequences. That's not a problem for us because we don't need to create the situation, it already exists.

 

Edited 26 January 2018 by Rogstanley

[Rogstanley]

28 minutes ago, Strokes said:

 

 

Only a third of gilts (excluding the massive amount of debt held by the BOE) are index linked. Of those, many are negative ie they guarantee a rate slightly below inflation, effectively locking in the government's ability to inflate away debt.

Edited 26 January 2018 by Rogstanley

[Buce]

 

The FoxesTalk definition of an expert:

 

Someone who says what you want to believe.

[leicsmac]

6 minutes ago, Buce said:

 

The FoxesTalk definition of an expert:

 

Someone who says what you want to believe.

As much as this may or may not be true, contempt for experts in some specific fields isn't necessarily a good thing.

[Buce]

1 minute ago, leicsmac said:

As much as this may or may not be true, contempt for experts in some specific fields isn't necessarily a good thing.

 

I didn't suggest that it was.

 

However, it's very noticable that expert opinion is lauded when it suits a certain narrative and decried when it doesn't.

[leicsmac]

2 minutes ago, Buce said:

 

I didn't suggest that it was.

 

However, it's very noticable that expert opinion is lauded when it suits a certain narrative and decried when it doesn't.

Yeah, no disagreement there.

 

I've said it before about economics: if you ask five different leading economists about the best economic policy for a state to pursue now or at any other time you'd get ten different answers and a punch-up.

[ealingfox]

To be fair using a post-war landscape 70 years ago isn't an especially useful comparison for the present day.

[Strokes]

39 minutes ago, Buce said:

 

I didn't suggest that it was.

 

However, it's very noticable that expert opinion is lauded when it suits a certain narrative and decried when it doesn't.

By all sides.

[leicsmac]

Mistrust of experts is only justified when a significant plurality of those experts themselves disagree, IMO.

[Guest]

2 hours ago, Strokes said:

 

 

Even if the post war argument isn't applied, i still haven't seen anything to contradict the idea that investment can itself be offset through the benefits of that investment. It's targeting investment in areas that will dividends that is important. Ultimately, we can't not invest so we need to invest in areas where real benefits can be realised.

[Guest MattP]

6 hours ago, toddybad said:

World growth is 3.9%

This is wonderful. Look at this.

 

Exactly why our future is outside the EU - the economic growth is stagnant in the cartel and thriving outside, let's get out into it.

 

4 hours ago, Buce said:

No movement from the coffin-dodgers or the Little Englanders though.

That poll was actually 52-48 on referendum day towards remain.

 

So it's a swing towards leave since the vote which delights me, I'd imagine a lot of middle aged remain voters have finally realised they were told a pack of lies by the bankers, tories, blarites etc and moved over making up for the coffin dodgers who have died.

 

As more of Cameron and Gideons predictions go down the toilet I'm sure we'll move more towards leave.

 

3 hours ago, toddybad said:

Can you explain, in your own words, how Britain went from having it's biggest ever debt post WW2 to building council housing, an integrated education system, motorways and the nhs, whilst at the same time reducing the national debt massively?

Errr...because the average life expectancy was about 70 and we had just lost millions of young men?

 

How did that slip your mind?

 

1 hour ago, ealingfox said:

To be fair using a post-war landscape 70 years ago isn't an especially useful comparison for the present day.

It's frightening people think it's comparable, desperation. 

[Guest MattP]

24 minutes ago, toddybad said:

Even if the post war argument isn't applied, i still haven't seen anything to contradict the idea that investment can itself be offset through the benefits of that investment. It's targeting investment in areas that will dividends that is important. Ultimately, we can't not invest so we need to invest in areas where real benefits can be realised.

Can you expand on this and tell us which areas you'll invest in?

[Kopfkino]

3 hours ago, Rogstanley said:

 

Aren’t you supposed to be a student? Haven’t your teachers told you about quality of sources yet? Because it’s pretty damn obvious you’ve just searched google for things which doubt the possibility of inflating away debt, posted them all regardless of them having extremely dubious credentials, and then sprinkled a bit of commentary around it to make it look like a structured argument. You’re fooling nobody, I’m afraid.

 

Well 2 of those papers are by a Professor who teaches one of my courses, got them from his reading list. But yes a man who studied and worked at Columbia, is now a Professor at LSE and has won awards for being the best economist under 40.

 

Then John Cochrane is a distinguished economist at Stanford.

 

One is an aggregation of various sources.

 

But yes it's definitely them that have dubious credentials and not Rog on Foxestalk.