Cheshirechappie
Established Member
Think we all have to be a wee bit careful discussing 'debt' and international finance.
As far as bankers go, let's make a distinction between the retail banks (or the retail arms of some of the big banking firms), who have no more control over interest rates than you or I. It's not really fair to lump them in with the idiots who drove the big banks to insolvency in the last decade when decrying 'the bankers'. Also worth bearing in mind that it was politicians (with the involvement of civil servants) who decided to use public money to bail out banks; no banker has any control over how public money is spent.
If government borrows money, the value of the money it borrows remains the same; a pound will still buy the same amount of goods or services that pound did before the loan was agreed. If a government prints money, there are now more pounds in circulation, but the same amount of goods or services. Thus, more pounds will be needed to buy the same amount of goods or services after money-printing than before; inflation will result from money printing (as it did with QE in the UK). If taken to extremes, you end up with what happened to Weimar Germany between the world wars, or Argentina and Zimbabwe more recently. QE may be a powerful tool for central banks, but it is one with very great risks.
Finally, as far as you or I are concerned, a debt has to be paid back with interest. Anybody who believes that debt is just an illusion should try convincing their bank or mortgage provider, and see how far they get.
As far as saving up for something goes - I agree wholeheartedly! If nothing else, having to save up means you think carefully about what you really need or want, and appreciate it much more when you can finally afford it. I recognise that in these days of 'have it all now', that's a rather old-fashioned concept, but it actually works rather well, particularly if it avoids longer-term large debts!
As far as bankers go, let's make a distinction between the retail banks (or the retail arms of some of the big banking firms), who have no more control over interest rates than you or I. It's not really fair to lump them in with the idiots who drove the big banks to insolvency in the last decade when decrying 'the bankers'. Also worth bearing in mind that it was politicians (with the involvement of civil servants) who decided to use public money to bail out banks; no banker has any control over how public money is spent.
If government borrows money, the value of the money it borrows remains the same; a pound will still buy the same amount of goods or services that pound did before the loan was agreed. If a government prints money, there are now more pounds in circulation, but the same amount of goods or services. Thus, more pounds will be needed to buy the same amount of goods or services after money-printing than before; inflation will result from money printing (as it did with QE in the UK). If taken to extremes, you end up with what happened to Weimar Germany between the world wars, or Argentina and Zimbabwe more recently. QE may be a powerful tool for central banks, but it is one with very great risks.
Finally, as far as you or I are concerned, a debt has to be paid back with interest. Anybody who believes that debt is just an illusion should try convincing their bank or mortgage provider, and see how far they get.
As far as saving up for something goes - I agree wholeheartedly! If nothing else, having to save up means you think carefully about what you really need or want, and appreciate it much more when you can finally afford it. I recognise that in these days of 'have it all now', that's a rather old-fashioned concept, but it actually works rather well, particularly if it avoids longer-term large debts!
