I'm looking at the debt clock again and if you look really closely, you can see how credit card debt, student loan debt, mortgage and other personal debt literally dwarf what the public debt is right now by huge margins. I think if anything, that's also quite a big issue that this country needs to address. I wouldn't mind if they came up with the means to even forgive some of it depending on the context. The national assets are clearly there and when you look at the debt clock that way, there is still more of that go around than what the public debt actually is.
@WanderingVagabond There's several schools of thought- here's mine (if it helps)
The debt is a symptom of an advanced stage of economic 'financialization'.
Any capitalist country requires a base amount of growth to maintain it's living standards. The U.K needs 3%, The U.S needs about 4% (i think) and china needs a massive 7%. If you don't achieve constant growth, your economic system stagnates or contracts. People are suddenly out of work and industries fail. That situation needs to be mitigated.
(Some people thought it could be avoided all together. That's a discussion for another time)
Now, something happened to the economy during the mid-to-late 90's to the early 2000's. 'financialization' occurred. Banks, private investors and hedge funds started taking up more of the economic pie. Finance is a necessary component of capitalism (Access to credit allows growth, etc), but it acquired a cancerous hold on the economy. This is due party to the increasingly complex financial instruments proliferating investment banking. These instruments made lots of money quickly, but were very unstable. Loans that would be considered toxic were bundled with 'good' money and sold as as CDO's or 'options', like derivatives (etc). Many of these practices were essentially fraud.
Now If you're playing fast and loose with your morals- you might also start lending to people and corporations you shouldn't, even if their financial status isn't stable enough. Considerations like this were ignored, so bad money flowed like cocaine. All of this extra cancerous money that got pumped into the economy covered up the west's slowly depleting manufacturing base, increased automation of tasks that used to require human labor and spiraling wage inequality. Several sector bubbles were generated from it (think the housing crash of 08-09, that was compounded by the financial instruments).
A good chunk of the public debt (at least here) Was accumulated by saving the economy, the rest by PFI projects and war spending (amongst other smaller things)
The leading political party of my country (New Labour bastards) made sure that the necessary deregulation occurred to make it all run smoothly. The conservatives like to position themselves as historically opposed to the frenzy of fraud and debt, but they were more than happy to accommodate all of this. They even supported the public spending of labour during these years!
The economy still functions the same now. More bad loans are given out, the traded instruments are worse than ever and most importantly nobody cares. The leading narratives don't include private debt as a problem. I think this has something to do with how democracy works. Ask yourself the question- "What would I do if I was told all these fires were my fault?" if you weren't paying attention, would you vote for the person who said that? People in my country don't care. They could have reigned in the banks, put some controls in, and/or dealt with the other problems (wage gap, etc). They let the situation get out of control and now they want cheep scapegoats.
That's the situation basically. At least the way my eyes see it.
That's another aspect worth discussing!
Your fed (and our bank of England) have spent almost half a decade executing Q.E (qualitative easing). That's just fancy jargon for printing money and drip feeding into the economy*. If you're going to do Q.E, then you're supposed to do it in short bouts. They've been at it for 6 years, especially your fed. Those efforts we're combined with an almost 0% interest rate to get finance lending more to the 'real' economy.
What's fascinating is how none of these efforts had their intended effect. Q.E got swallowed up by the big banks. If things were peachy they would have passed it out as economic stimulus. They didn't because they need that money to protect their balance sheets from the bad debts they themselves generated (The Instruments)
The fed (and BoE) now are massively leveraged. They got nothing out of this apart from giving a few higher-ups at Bank of America a cheaper lunch
There's considerable debate about whether they meant to do that too....
(*By buying financial assets and government debt)
Man you really understand this quite well. I thought of QE as giving the banks their own bailout, something that you aren't gonna see a lot of these "End the Fed" guys acknowledge at all.That's another aspect worth discussing!
Your fed (and our bank of England) have spent almost half a decade executing Q.E (qualitative easing). That's just fancy jargon for printing money and drip feeding into the economy*. If you're going to do Q.E, then you're supposed to do it in short bouts. They've been at it for 6 years, especially your fed. Those efforts we're combined with an almost 0% interest rate to get finance lending more to the 'real' economy.
What's fascinating is how none of these efforts had their intended effect. Q.E got swallowed up by the big banks. If things were peachy they would have passed it out as economic stimulus. They didn't because they need that money to protect their balance sheets from the bad debts they themselves generated (The Instruments)
The fed (and BoE) now are massively leveraged. They got nothing out of this apart from giving a few higher-ups at Bank of America a cheaper lunch
There's considerable debate about whether they meant to do that too....
(*By buying financial assets and government debt)
Thank you!
I sympathize with people who hate the fed. They've know allot the same shit I know and have come to the 'tear it down' conclusion. I think they're wrong on a technical level but I do understand their sentiment. The fed has basically facilitated fraud at this point.
Speaking of that, Bank and America and others have been part of drug cartels before. Not many people in jail from that or all the insider trading and other bullshit that went on during the financial crisis. They can literally get away with murder here.
Sort of off topic, but I'm impressed with your knowledge about these issues from a technical standpoint. Did you happen to study some kind of economics, accounting or finance or have you just done a lot of research in your spare time about this?