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   sj_zero (sj_zero@social.fbxl.net)'s status on Tuesday, 02-Jan-2024 17:07:51 JST sj_zero
   England is at something like 22% poverty rate, and is being forced to cut social spending regardless. It'll get worse before it gets any better. Austerity is a dirty word, but if you spend money you don't have forever eventually you're spending all your money taking care of bankers instead of children.
   
   If you spend money you don't have, you typically do so by creating bonds which are then purchased by banks. Just like a credit card, the banks don't take those for free, they lend money in exchange for being paid back more than was borrowed. Moreover, national governments don't just borrow money then pay it back, they borrow money, then borrow money to pay back the money borrowed. When rates are low, countries can borrow for fairly low amounts of money but just like when you rack up a credit card more and more the minimum payment grows and grows until you can't even pay that. If you also have a situation where interest rates rise, then suddenly your minimum payment is rising even faster than you rack up new debts. The interest on bonds is just money being handed to the banks, and it's tax money that cannot be spent on anything else. In 2024, Fitch projects that number will rise to 176 billion gbp, up 60-odd billion, and it'll continue to rise from there. It already makes up more money than the day to day operation cost of the NHS which was 171 billion in 2022/2023 (compares to a total budget including long term capital of 181 billion).
   
   Some people think you can print your way out of such a situation, but ask a briton how they like the high inflation of the past while, whether it makes them feel richer or poorer. Print your way out of a debt crisis, and you print your way into a currency crisis, making your situation more difficult, as we've seen in many south American economies.
   
   Some people say the state isn't like people when it comes to debt, and they're right -- it's far worse. If I foolishly rack up debt, it dies with me, but if my government foolishly racks up debt, the obligation passes to my children whether they benefited or not. This is why I call getting into perpetual debt selling your kids into slavery. You get money today at the cost of their future.
   • BowserNoodle ☦️ likes this.
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     BowserNoodle ☦️ (bowsacnoodle@poa.st)'s status on Tuesday, 02-Jan-2024 17:19:21 JST BowserNoodle ☦️

     in reply to
     @sj_zero Government debt is the safest way to fund pension programs in a capitalist system. Nationalized resources work well too, like Norway. Per Wikipedia:
     >The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector. As of September 2023, it had over US$1,477 billion in assets,[1] and held on average 1.5% of all of the world's listed companies, making it the world's largest single sovereign wealth fund in terms of total assets under management.[2][3] This translates to roughly US$270,000 per Norwegian citizen.
     I can't imagine how it would be if the USA had social security funded at 10% of that level.
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     mike805 (mike805@fosstodon.org)'s status on Tuesday, 02-Jan-2024 19:05:48 JST mike805

     in reply to

     @sj_zero Another way to look at it is money is like water and credit is like alcohol. You need water to live. Drinking alcohol will make you feel good, but you need water to make up for it later. And if you are dying of thirst, alcohol might make you feel better for a minute but it will make you worse off long term.

     All of the above also applies to stuffing credit down the throat of an economy that desperately needs money.

     ✙ dcc :pedomustdie: :phear_slackware: likes this.