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Interesting chart on national debt

darkkermit
Posts: 11,204
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6/7/2013 11:50:52 AM
Posted: 3 years ago
http://en.wikipedia.org...

This has been UK's debt since 1692. Notice something quite interesting about it? It's been over 200% of GDP in its history. Yet despite its high GDP/debt ratio in its past, it has been a superpower throughout most of world history, and in modern day still remains a nation with a strong GDP per capita.
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DanT
Posts: 5,693
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6/7/2013 5:07:59 PM
Posted: 3 years ago
At 6/7/2013 11:50:52 AM, darkkermit wrote:
http://en.wikipedia.org...

This has been UK's debt since 1692. Notice something quite interesting about it? It's been over 200% of GDP in its history. Yet despite its high GDP/debt ratio in its past, it has been a superpower throughout most of world history, and in modern day still remains a nation with a strong GDP per capita.

A.) How much is domestic and how much is foreign?
B.) So long as you have a line of credit, you are good. Once the credit is gone, you are screwed.

If the line of credit runs out, and the terms of the debt cannot be paid (such as failure to pay interest), than the nation defaults.

Inflation can actually help the debt crisis by devaluing the currency, while deflation can lead to default by increasing the value of the debt owed.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
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6/7/2013 8:44:22 PM
Posted: 3 years ago
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

correlation =/= causation

I would be more inclined to believe that they have a higher debt so they can maintain their superpower. A nation only acquires debt when taxes are not sufficient.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
wrichcirw
Posts: 11,196
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6/7/2013 11:17:25 PM
Posted: 3 years ago
At 6/7/2013 11:50:52 AM, darkkermit wrote:
http://en.wikipedia.org...

This has been UK's debt since 1692. Notice something quite interesting about it? It's been over 200% of GDP in its history. Yet despite its high GDP/debt ratio in its past, it has been a superpower throughout most of world history, and in modern day still remains a nation with a strong GDP per capita.

During the 1800s
1) The debt was accumulated during the Napoleonic wars.
2) The debt may have been the deciding factor in increasing opium production in India to trade to China, an extremely morally questionable, if not extremely profitable, act.

During the 1900s
The debt coincided with the British ceding empire to America.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
RoyLatham
Posts: 4,488
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6/8/2013 12:45:01 AM
Posted: 3 years ago
What is missing are graphs of GDP growth, inflation, and saving rates. It's not enough to say that Britain survived and generally prospered.

The US had enormous debt in WWII, but the saving rates were extremely high and high GDP growth after the war enabled it to be paid back. Japan has been running high deficits for many years, funded by very high savings rate. Now US savings rates are low, and Japanese savings rates are deteriorating, so what happens remains to be seen.

The UK had the industrial revolution in the 1800s that certainly helped make the debt manageable. In current times, surging economies would resolve the debt crisis. However, if government control of the economies through extreme regulation prevent strong growth, then the end result will be massive inflation. There are plenty of examples of debt-ridden countries sinking by inflation.
YYW
Posts: 36,263
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6/8/2013 12:51:50 AM
Posted: 3 years ago
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

To an extent, yes. Borrowing large sums of money gives developed countries the capital to invest in its own development. This is obviously common sense, and not correlation/causation as another user suggested (rofl, btw.).
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darkkermit
Posts: 11,204
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6/8/2013 1:38:49 AM
Posted: 3 years ago
At 6/8/2013 12:51:50 AM, YYW wrote:
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

To an extent, yes. Borrowing large sums of money gives developed countries the capital to invest in its own development. This is obviously common sense, and not correlation/causation as another user suggested (rofl, btw.).

Not true at all. Most of American government money goes towards social services like medicare, medicaid, and social security. While one might argue whether they are beneficial to the US citizens as a whole or not, they are hardly forms of "investments" and really forms of consumption.

If the money went mainly to building infrastructure, research or even imperialistic goals that would be one thing. But the majority of the money isn't.
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YYW
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6/8/2013 1:58:32 AM
Posted: 3 years ago
At 6/8/2013 1:38:49 AM, darkkermit wrote:
At 6/8/2013 12:51:50 AM, YYW wrote:
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

To an extent, yes. Borrowing large sums of money gives developed countries the capital to invest in its own development. This is obviously common sense, and not correlation/causation as another user suggested (rofl, btw.).

Not true at all.

Oh, this will be fun.

Most of American government money goes towards social services like medicare, medicaid, and social security.

Mandatory spending does make up the majority of governmental spending... which leads to various kinds of economic development (like medical infrastructure, etc.).

While one might argue whether they are beneficial to the US citizens as a whole or not, they are hardly forms of "investments" and really forms of consumption.

I use the term "investment" loosely. I'm more or less articulating the economic impact that governmental spending has. So, here, it seems we've had a lovely miscommunication.

If the money went mainly to building infrastructure, research or even imperialistic goals that would be one thing. But the majority of the money isn't.

I think you're not understanding how governmental spending works...
Tsar of DDO
jimtimmy2
Posts: 403
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6/8/2013 3:25:16 AM
Posted: 3 years ago
At 6/8/2013 1:58:32 AM, YYW wrote:
At 6/8/2013 1:38:49 AM, darkkermit wrote:
At 6/8/2013 12:51:50 AM, YYW wrote:
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

To an extent, yes. Borrowing large sums of money gives developed countries the capital to invest in its own development. This is obviously common sense, and not correlation/causation as another user suggested (rofl, btw.).

Not true at all.

Oh, this will be fun.

Most of American government money goes towards social services like medicare, medicaid, and social security.

Mandatory spending does make up the majority of governmental spending... which leads to various kinds of economic development (like medical infrastructure, etc.).

While one might argue whether they are beneficial to the US citizens as a whole or not, they are hardly forms of "investments" and really forms of consumption.

I use the term "investment" loosely. I'm more or less articulating the economic impact that governmental spending has. So, here, it seems we've had a lovely miscommunication.

If the money went mainly to building infrastructure, research or even imperialistic goals that would be one thing. But the majority of the money isn't.

I think you're not understanding how governmental spending works...

YYW,

Are you arguing that governmental transfer programs that encourage increased consumption of medical services and increased consumption in general and actually productivity enhancing "investments"?

Please tell me you are joking.

Anyways, productivity per person and living standards are increased by capital investment (savings, delayed consumption).

Over long periods of time, capital can only enhance living standards if it is private and not through state force.

Only a private, free market economy with high amounts of a capital can grow.
FREEDO
Posts: 21,057
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6/8/2013 4:46:21 PM
Posted: 3 years ago
At 6/7/2013 8:44:22 PM, DanT wrote:
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

correlation =/= causation

I would be more inclined to believe that they have a higher debt so they can maintain their superpower. A nation only acquires debt when taxes are not sufficient.

That is a reasonable explanation. Although, I'm slightly annoyed with "correlation =/= causation" being the only response Libertarians have when I present statistical issues.
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fnord
darkkermit
Posts: 11,204
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6/8/2013 4:50:18 PM
Posted: 3 years ago
At 6/8/2013 4:46:21 PM, FREEDO wrote:
At 6/7/2013 8:44:22 PM, DanT wrote:
At 6/7/2013 5:11:19 PM, FREEDO wrote:
You'll find that high debt often goes along with superpowers.

Debt builds nations.

correlation =/= causation

I would be more inclined to believe that they have a higher debt so they can maintain their superpower. A nation only acquires debt when taxes are not sufficient.

That is a reasonable explanation. Although, I'm slightly annoyed with "correlation =/= causation" being the only response Libertarians have when I present statistical issues.

Yes, there's a correlation between libertarians responding to statistical issues as correlation =/= causation, but correlation =/= causation.
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darkkermit
Posts: 11,204
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6/8/2013 4:51:33 PM
Posted: 3 years ago
But my main problem with your republican/democrat president GDP per capita is that i don't think the results are statistically significant, although i'd have to do the math out what are the chances it would occur via chance.
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RoyLatham
Posts: 4,488
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6/10/2013 1:30:37 PM
Posted: 3 years ago
Someone recently pointed out that the accumulation of American debt is tightly correlated to sales of Justin Beiber records. Sometimes correlation does not equal causation is enough to say.

The Japanese have been spending furiously on infrastructure since the early 90s. They've been building roads, rail lines, and airports. They've filled in part of Tokyo Bay and covered it with modern buildings. They have one of the world's best primary and secondary education systems.

The massive infrastructure spending has not brought their economy out of stagnation. They have elected a new prime minister every year for the past five years. The regulatory bureaucracy doesn't care who is elected and maintains a firm grip on the country.

The U.S. has enacted Dodd-Frank, Obamacare, and an omnipotent EPA. That controls banking, health care, and energy. The bureaucracy is now set to rule for decades, providing a guarantee the best that can be done is mediocrity.