Category Archives: National Debt

Universal Basic Income Is Inevitable, Unavoidable, and Incoming”

The last time I saw universal basic income discussed on television, it was laughed away by a Conservative MP as an absurd idea. The government giving away wads of cash responsibility-free to the entire population sounds entirely fantastical in this austerity-bound age, where “we just don’t have the money” is repeated endlessly as a mantra. […]

In this world, universal basic income seems like a rather distant prospect. Yes, there are some proposals, like Switzerland and Finland, both of which are holding a referendum on universal basic income. But I expect neither of them to pass. The current political climate is just too patriarchal. We live in a world where free choice is unfashionable. The mass media demonizes the poor as feckless and too lazy and ignorant to make good choices about how to spend their income. Better that the government spend huge chunks of GDP employing bureaucrats to administer tests, to moralize on the virtues of work, and sanction the profligate.

But this world is fast changing, and the more I study the basic facts of economic life in the early 21st century, the more inevitable universal basic income begins to seem.

And no, it’s not because of the robots that are coming to take our jobs, as Erik Brynjolfsson suggests in his excellent The Second Machine Age. While automation is a major economic disruptor that will transform our economy, assuming that robots will dissolve jobs entirely is just buying into the same Lump of Labour fallacy that the Luddites fell for. Automation frees humans from drudgery and opens up the economy to new opportunities. Where once vast swathes of the population toiled in the fields as subsistence farmers, mechanization allowed these people to become industrial workers, and their descendants to become information and creative workers. As today’s industries are decimated, and as the market price of media falls closer and closer toward zero, new avenues will be opened up. New industries will be born in a neverending cycle of creative destruction. Yes, perhaps universal basic income will help ease the current transition that we are going through, but the transition is not the reason why universal basic income is inevitable.

So why is it inevitable? Take a look at Japan, and now the eurozone: economies where consumer price deflation has become an ongoing and entrenched reality. This occurrence has been married to economic stagnation and continued dips into recession. In Japan — which has been in the trap for over two decades — debt levels in the economy have remained high. The debt isn’t being inflated away as it would under a more “normal” rate of growth and inflation. And even in the countries that have avoided outright deflationary spirals, like the UK and the United States, inflation has been very low.

The most major reason, I am coming to believe, is rising efficiency and the growing superabundance of stuff. Cars are becoming more fuel efficient. Homes are becoming more fuel efficient. Vast quantities of solar energy and fracked oil are coming online. China’s growing economy continues to pump out vast quantities of consumer goods. And it’s not just this: people are better educated than ever before, and equipped with incredibly powerful productivity resources like laptops, iPads and smartphones. Information and media has fallen to an essentially free price. If price inflation is a function of the growth of the money supply against growth in the total amount of goods and services produced, then it is very clear why deflation and lowflation have become a problem in the developed world, even with central banks struggling to push out money to reinflate the credit bubble that burst in 2008.

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Much, much more is coming down the pipeline. At the core of this As the cost of superabundant and super-accessible solar continues to fall, and as battery efficiencies continue to increase the price of energy for heating, lighting, cooking and transportation (e.g. self-driving electric cars, delivery trucks, and ultimately planes) is being slowly but powerfully pushed toward zero. Heck, if the cost of renewables continue to fall, and advances in AI and automation continue, in thirty or forty years most housework and yardwork will be renewables-powered, and done by robot. Water crises can be alleviated by solar-powered desalination, and resource pressures by solar-powered robot miners.

And just as computers and the internet have made huge quantities of media (such as this blog) free for users, 3-D printers and disassemblers will push the production of stuff much closer to free. People will simply be able to download blueprints from the internet, put their trash into a disassembler and print out new items. Obviously, this won’t work anytime soon for complex objects like smartphones, but every technology company in the world is hustling and grinding for more efficiency in their manufacturing processes. Not to mention that as more and more stuff is manufactured, and as we become more environmentally conscious and efficient at recycling, this huge global stockpile of stuff acts as another deflationary pressure.

These deflationary pressures will gradually seep into services as more and more processes become automated and powered by efficiency increasing machines, drones and robots. This will gradually come to encompass the old inflationary bugbears of medical care, educational costs and construction and maintenance costs. Of course, I don’t expect this dislocation to result in permanent incurable unemployment. People will find stuff to do, and new fields will open up, many of which we are yet to imagine. But the price trend is clear to me: lots and lots of lowflation and deflation. This, ultimately, is at the heart of capitalism. The race for efficiency. The race to do more with less (including less productivity). The race for the lowest costs.

I’ve written about this before. I jokingly called it “hyperdeflation.”

And the obvious outcome, at the very least, is global Japan. This, of course, is not a complete disaster. Japan remains a relatively rich and stable country, even after twenty years of deflation. But Japan’s high level of debt — and particularly government debt — does pose a major concern.  Yes, as a sovereign currency issuer borrowing in its own currency the Japanese government runs no risk of actual default. But slow growth and deflation are stagnationary. And without growth and inflation, the government will have to raise taxes to cover the deficit, spiking the punchbowl and continuing the cycle of debt deflation. And of course, all of the Bank of Japan’s attempts at reigniting inflation and inflating away that debt through complicated monetary operations in financial markets have up until now proven pretty ineffectual.

This is where some form of universal basic income comes in: ultimately, the most direct stimulus for lifting inflation and triggering productive economic activity is putting cash in the people’s hands. What I am suggesting is that printing money and giving it away to people — as opposed to trying to push it out through the complicated and convoluted transmission mechanism of financial sector lending — will ultimately become governments’ major backstop against debt deflation, as well as the temporary joblessness and economic inequality created by technological acceleration. Everything else, thus far, has been pushing on a string. And the deflationary pressure is only going to become stronger as efficiency rises and rises.

Throw enough newly-created money into the economy, inject inflation, and nominal tax revenues can rise to cover the debt load. Similarly, if inflation gets too high, cut back on the money-creation or take money out of circulation and bring inflation into check, just as central banks have done for the last century.

The biggest obstacle to this, in my view, is the interests of those with lots of money, who like deflation because it increases their purchasing power. But in the end, rich people aren’t just sitting on hoards of cash. Most of them do have businesses that would benefit from their clients having higher incomes so as to increase spending, and thus their incomes. Indeed, in a debt-deflationary spiral with default cascades, many of these rentiers would face the same ruin as their clients, as their clients default on their obligations.

And yes, I know that there are legal obstacles to fully-blown helicopter money, chiefly the notion of central bank independence. But I am an advocate of central bank independence, for a variety of reasons. Indeed, I don’t think that universal basic income should be a function of fiscal spending at all, not least because I think that dispassionate and economically literate central bankers tend to be better managers of monetary expansion and contraction than politically motivated — and generally less economically literate — politicians. So everything I am describing can and should be envisioned as a function of monetary policy. Indeed, what I am advocating for is a new set of core monetary policy tools for the 21st century.

via Universal Basic Income Is Inevitable, Unavoidable, and Incoming — azizonomics

 

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Can We have A world without debt?

Can we have a world without debt?

debt-academy

For anyone currently in debt, a world without debt probably sounds like a great solution. Some debts – like those between friends or family members – can easily be written off, or at least delayed. But what about debts from financial institutions or between governments? They may be a little more difficult to simply wipe the slate clean.

Is that even a position we want to be in? The whole concept of money is built around a model of debt. A world without debt would require a really drastic change, both economically and morally. It could spell financial ruin for smaller countries and would dramatically impact our everyday lives.

This Payplan infographic investigate the history of debt, the current position in the world and answer the question.

 

v2-can-we-live-in-a-world-without-debt

Do you think Debt itself is not evil.. ?

why this payplan infographic presenting Debt an essential system of modern economics. .?

Why they want to live your life in debts ?

Think and write 

 

source: https://www.payplan.com/can-we-have-a-world-without-debt/

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https://arresteddevelopments.wordpress.com

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Creative Commons Copyright © Arrested Developments 2015

Bad Move Demonetizing Rs 500 & Rs 1000 Notes in India

Bad Move | Demonetizing Rs 500 & Rs 1000 Currencies in India

 

The first thing

It will create a huge Money Scarcity.

Indian Market is surely going to crumple due to this sudden Money Scarcity.

The Second thing is that the nation is not in a form of Emergency for showing this much urgency in bringing a sudden halt to the market.

500-1000


It’s a wayward step for India because a lot of people were small traders who overwhelmingly did their business in cash.


these are people who probably do have a few hundred thousand rupees – a few thousand rupees – stored under their beds and will have problems when they turn up in the bank on Thursday trying to change their money.


The move leaves a lot of uncertainty about the Indian economy in the short term as well long.

This thing needs long term planning plus confidential execution so that it may cause no losses to the Government and unwanted situation in general.

But here what they also fail to take into consideration is the cost of scrapping these high-value notes.

Presently, the share of Rs.1,000 notes in the stock of currency in circulation at the end of financial year 2015 ;a whopping 39%, with Rs.500 notes accounting for a further 45% of currency stock.

There is a significant cost in stopping issuance of Rs.1,000 and Rs.500 notes, and these costs should have been be weighed well against what misuse of high-value notes costs the economy, before we should have made a decision.

Cost Impact:

For example, cost of printing a Rs.100 note was Rs.1.79, a Rs. 10 note is 0.96 (according to the RBI data), or 9.6% of face value. The cost of printing a Rs.1,000 note (Rs.3.17), on the other hand, was only 0.32% of the face value.

g-charticle-money-value2-web

In other words, for a given amount of money, it costs the RBI 30% less to print it in the form of Rs.1,000 notes than in Rs.10 notes.

It would have been better that first the Govt. should have  stopped the further issuance of Rs.500 and Rs.1,000 notes and that instead of printing new notes of these denominations, we would have printed an equivalent amount using Rs.100 and New 500 notes instead. (It is reasonable to assume that the demand for currency notes will remain the same in the new regime.)

By this We could have avoided the whopping  loss amounting somewhere between Rs.2770 to Rs.11000 Crore to the exchequer by this hurried banning of 500/1000 currencies as well this huge gap of cash created in the market.

Whats the need of Rs.2000 denomination of Currency. It is a foolish move. It will only help in further raising of cost and prices. Think it is to lower the losses suffered by RBI in scrapping Rs.500 and Rs.1000.

Any withdrawal would have to be slow: central banks were worrying that an expiry date on cash could undermine the value of the currency.

Absence of coordinated withdrawal of all high-value notes, the move is going to be much less effective.”

The unanswered questions


Much of the government’s new initiative remains mired in confusion. It is not clear exactly what will be the effect on the money supply or whether it will take out a lot of cash in circulation.


Likewise no one knows how much cash will be locked out of the system and how successful forgers will be at catching up. No-one can say definitively whether the new notes will be harder to fake.


Questions arise as to the impact in rural areas. Will they still use the old notes or will “a black market in black market notes” emerge?


It is also not clear how the banking authorities handled and planned for this huge logistical exercise which has caught so many people in jeopardy.

Read further stories:

The Trumgeddon

https://arresteddevelopments.wordpress.com/2016/11/06/trumpgeddon

Early Voting may break hearts

https://arresteddevelopments.wordpress.com/2016/11/04/early-voting-in-2016-us-presidential-polls-may-break-hearts

Hillary Bhakt U.S Media

https://arresteddevelopments.wordpress.com/2016/11/01/hillary-bhakt-u-s-media

Trumpet Sounded: And there came hail and fire

https://arresteddevelopments.wordpress.com/2016/10/30/trumpet-sounded

A crooked Election

https://arresteddevelopments.wordpress.com/2016/10/29/a-crooked-election

Leaked Emails predicted Trump’s rise

https://arresteddevelopments.wordpress.com/2016/11/06/leaked-email-predicted-trumps-rise

 

 

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https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

WORLD DEBT CLOCK

  • WORLD DEBT CLOCK

    $61,380,034,483,572

  • INTEREST ACCRUED

    $359,550

COUNTRIES

Australia

Australia

GDP: $1,625,414,000,000
Population: 23,781,349

Austria

Austria

GDP: $362,608,000,000
Population: 8,584,000

Belgium

Belgium

GDP: $397,423,000,000
Population: 11,258,642

Brazil

Brazil

GDP: $2,532,810,000,000
Population: 206,768,562

Bulgaria

Bulgaria

GDP: $45,506,000,000
Population: 7,202,552

Canada

Canada

GDP: $1,435,679,000,000
Population: 35,985,770

China

China

GDP: $8,245,000,000,000
Population: 1,355,000,000

Colombia

Colombia

GDP: $377,700,000,000
Population: 47,900,000

Cyprus

Cyprus

GDP: $18,742,080,611
Population: 847,008

Czech Republic

Czech Republic

GDP: $181,104,000,000
Population: 10,543,125

Denmark

Denmark

GDP: $306,696,000,000
Population: 5,659,628

Estonia

Estonia

GDP: $23,701,000,000
Population: 1,313,814

Finland

Finland

GDP: $228,421,000,000
Population: 5,471,674

France

France

GDP: $2,354,660,000,000
Population: 66,133,194

Germany

Germany

GDP: $3,199,099,000,000
Population: 83,751,602

Greece

Greece

GDP: $188,736,000,000
Population: 10,812,508

Hong Kong

Hong Kong

GDP: $304,770,000,000
Population: 7,298,300

Hungary

Hungary

GDP: $115,595,000,000
Population: 9,849,798

India

India

GDP: $2,049,000,000,000
Population: 1,295,000,000

Ireland

Ireland

GDP: $224,699,000,000
Population: 4,625,087

Israel

Israel

GDP: $316,312,000,000
Population: 8,120,000

Italy

Italy

GDP: $1,739,293,000,000
Population: 60,795,764

Japan

Japan

GDP: $4,115,416,900,000
Population: 127,240,000

Latvia

Latvia

GDP: $26,121,000,000
Population: 2,023,825

Lithuania

Lithuania

GDP: $40,376,000,000
Population: 2,971,905

Luxembourg

Luxembourg

GDP: $57,095,000,000
Population: 562,958

Malaysia

Malaysia

GDP: $264,963,000,000
Population: 31,000,000

Malta

Malta

GDP: $9,193,000,000
Population: 429,364

Mexico

Mexico

GDP: $1,049,854,000,000
Population: 112,323,000

Netherlands

Netherlands

GDP: $717,506,000,000
Population: 16,900,575

New Zealand

New Zealand

GDP: $166,181,000,000
Population: 4,649,344

Norway

Norway

GDP: $352,096,000,000
Population: 5,165,998

Pakistan

Pakistan

GDP: $111,447,000,000
Population: 186,700,000

Poland

Poland

GDP: $460,966,000,000
Population: 38,492,299

Portugal

Portugal

GDP: $191,869,000,000
Population: 10,374,289

Romania

Romania

GDP: $170,645,000,000
Population: 19,860,074

Russia

Russia

GDP: $997,000,000,000
Population: 146,300,000

Singapore

Singapore

GDP: $277,604,000,000
Population: 5,535,494

Slovakia

Slovakia

GDP: $87,603,000,000
Population: 5,421,836

Slovenia

Slovenia

GDP: $41,102,000,000
Population: 2,060,821

South Africa

South Africa

GDP: $347,700,000,000
Population: 54,500,000

South Korea

South Korea

GDP: $1,348,000,000,000
Population: 50,617,000

Spain

Spain

GDP: $1,180,179,000,000
Population: 46,704,308

Sweden

Sweden

GDP: $483,876,000,000
Population: 9,747,355

Switzerland

Switzerland

GDP: $647,293,000,000
Population: 8,237,060

Thailand

Thailand

GDP: $376,483,000,000
Population: 69,400,000

Turkey

Turkey

GDP: $669,332,000,000
Population: 73,100,000

United Kingdom

United Kingdom

GDP: $2,720,890,000,000
Population: 64,767,000

United States

United States

GDP: $18,060,200,000,000
Population: 322,778,960

DEBT EXPLAINED

https://www.youtube-nocookie.com/embed/PHe0bXAIuk0?rel=0&showinfo=0

INFO

Data

Over 90% of our data is directly obtained from official government agencies and central banks. When this has not been possible we have used data from the CIA, The World Bank or Eurostat. This raw data is then processed through our algorithms which use, amongst other variables, the average 10 year interest rate paid on the debt to accurately calculate the current debt amount at the time you are viewing the debt clock. We believe our calculations are correct working from the data that we have collected.

Debt Definition

This is the gross government debt, this means the amount of money (the repayment value) owed by government today calculated according to the SDDS 2014 and The Maastricht Treaty guidelines. In keeping with the aforementioned guidelines we do not subtract from the debt any financial assets the government may own. Please also note the debt figures do not take into account any government future payments e.g. pensions payable next year. Or business and private borrowing e.g. you buying a car with a loan, buying a house with a mortgage or a business buying a machine.

 

Disclaimer

We have no secret agenda. We are not affiliated, connected, sponsored or even friendly to any political party, pressure/lobby group, or steering party in the world.