You are aware that members of the EU monetary union don't issue their own currency?
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M
morganist
You are aware that members of the EU monetary union don't issue their own currency?
The research also includes non Eurozone countries and the outcome is the same when there is high government debt and high deficits regardless of whether the country is in the Eurozone or not.
M
morganist
In the words of Wolfgang Ernst Pauli (translated idiomatically of course) "This is not only wrong, it's preposterous!
If governments do not have problems paying the maturity payments then why do they use the IMF and why do they sometimes not make the payments? The fact the IMF exists to deal with this problem means it is a problem that needs to resolved that involves hundreds of billions of dollars of investment. You are arguing against something that has been acknowledge to be occurrring and that has needed one of the highest funded organisations ever to resolve it.
M
morganist
Government debt doesn’t have to be paid back, it has to be outgrown.
Inflation: the cure for high prices is high prices.
No economic growth is different to inflation. Inflation is the increase in price of a basket of goods from one time to another. Economic growth is when the GDP increases, this can happen without prices increasing. If economic growth, which is the output of the economy, expands then it can shrink debt proportionately. This can be achieved without inflation occurring.
Name a country you have in mind and lets see if debt is their problem or if sdebt is the symtptom of their problem. As long as you are vague about what country you are talking about. It can't be discussed logically.The research also includes non Eurozone countries and the outcome is the same when there is high government debt and high deficits regardless of whether the country is in the Eurozone or not.
M
morganist
Name a country you have in mind and lets see if debt is their problem or if sdebt is the symtptom of their problem. As long as you are vague about what country you are talking about. It can't be discussed logically.
What is vague about performing a national investment analysis across the whole of the EU and then assessing the data to accurately predict the nations with high government debt and high deficits will enter sovereign debt crisis or economic crisis. See the linked data in the Scribd document at the bottom of the page.
https://morganisteconomics.blogspot.com/p/euro-crisis.html
In terms of the nations I predict first you have Portugal, Italy, Ireland, Greece and Spain. Then you have Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia. Read my article below that identified the problem before it happened and became reality. The technique works and shows the outcome of high government debt and high deficits.
https://morganisteconomics.blogspot.com/2011/11/tip-on-national-investment-analysis.html?q=a+tip
What is vague about the data being included in the internationally published book Euro Crisis, which is on the list of resources for the Euro at the European University Institute? It could not be more publically available and acknowledged. From the research I conducted in the European Union high government debt and high deficits lead to crisis.
No economic growth is different to inflation. Inflation is the increase in price of a basket of goods from one time to another. Economic growth is when the GDP increases, this can happen without prices increasing. If economic growth, which is the output of the economy, expands then it can shrink debt proportionately. This can be achieved without inflation occurring.
Agreed. This is standard economics.
The reason you observe this, in theory at least, is that as GDP increases the amount of base money and credit money in an economy can be increased without causing inflation.* The underlying assumption is that no one will produce that for which there is not a sufficient market, which suggests demand will grow in consort with GDP.
But it leaves invalid, for countries that issue debt in their own currency, your assertion that "...if [sovereign debt] becomes to high the governments ability to pay the maturity payments dwindles and they have to borrow from the IMF." This is false. However these countries, like the U.S. and the U.K., could at some high value of issued debt find that servicing interest on the debt, which is simply a form of non-discretionary spending, becomes inconveniently high compared to the level of desired discretionary spending. These countries can retire as much debt as they see fit, Just as Japan recently retired ~ 50% of their "debt". In fact, the existence of a Japan invalidates your argument as to so-called "debt" of countries that issue debt in their own currency.
If you want to discuss these topics intelligently, I'm afraid there is only one thing for you: read the work of the modern economists. You seem stuck in the neoclassical period.
______________
*We know that although Friedman's dictum that inflation is always and everywhere caused by too much money chasing too few goods, that is only the immediate cause. One has to ask why is there too much money chasing too few goods? The answers to that question are myriad!!!
M
morganist
Agreed. This is standard economics.
The reason you observe this, in theory at least, is that as GDP increases the amount of base money and credit money in an economy can be increased without causing inflation.* The underlying assumption is that no one will produce that for which there is not a sufficient market, which suggests demand will grow in consort with GDP.
But it leaves invalid, for countries that issue debt in their own currency, your assertion that "...if [sovereign debt] becomes to high the governments ability to pay the maturity payments dwindles and they have to borrow from the IMF." This is false. However these countries, like the U.S. and the U.K., could at some high value of issued debt find that servicing interest on the debt, which is simply a form of non-discretionary spending, becomes inconveniently high compared to the level of desired discretionary spending. These countries can retire as much debt as they see fit, Just as Japan recently retired ~ 50% of their "debt". In fact, the existence of a Japan invalidates your argument as to so-called "debt" of countries that issue debt in their own currency.
If you want to discuss these topics intelligently, I'm afraid there is only one thing for you: read the work of the modern economists. You seem stuck in the neoclassical period.
______________
*We know that although Friedman's dictum that inflation is always and everywhere caused by too much money chasing too few goods, that is only the immediate cause. One has to ask why is there too much money chasing too few goods? The answers to that question are myriad!!!
You seem to see growth purely as a monetary issue rather than an increase in output too. This is where a lot of inflation comes from, if output namely the amount of goods and services do not increase then there is no real growth and if there is monetary growth without an increase in goods and services then you will see inflation.
What is vague about performing a national investment analysis across the whole of the EU and then assessing the data to accurately predict the nations with high government debt and high deficits will enter sovereign debt crisis or economic crisis. See the linked data in the Subscribed document at the bottom of the page.
https://morganisteconomics.blogspot.com/p/euro-crisis.html
In terms of the nations I predict first you have Portugal, Italy, Ireland, Greece and Spain. Then you have Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia. Read my article below that identified the problem before it happened and became reality. The technique works and shows the outcome of high government debt and high deficits.
https://morganisteconomics.blogspot.com/2011/11/tip-on-national-investment-analysis.html?q=a+tip
What is vague about the data being included in the internationally published book Euro Crisis, which is on the list of resources for the Euro at the European University Institute? It could not be more publically available and acknowledged. From the research I conducted in the European Union high government debt and high deficits lead to crisis.
Sorry, but you are hopelessly wrong!!! the Countries you mention all issue at least some debt in currencies they don't control. Hungary for example uses the Florint. But what currencies was their recent bond sale issued in? That was the Euro and the U,S, Dollar!!! A further problem fro Hungary is that they do not have great depth of sovereignty over the Florint. If they did, they would not find it necessary to sell bonds issued in a foreign currency! Similar comments can be made about all the other countries you used as examples.
M
morganist
Sorry, but you are hopelessly wrong!!! the Countries you mention all issue at least some debt in currencies they don't control. Hungary for example uses the Florint. But what currencies was their recent bond sale issued in? That was the Euro and the U,S, Dollar!!! A further problem fro Hungary is that they do not have great depth of sovereignty over the Florint. If they did, they would not find it necessary to sell bonds issued in a foreign currency! Similar comments can be made about all the other countries you used as examples.
Romania has its own currency and was badly affected by the economic crisis. It had high government debt and high deficits. The UK was also badly affected and it has its own currency it has high government debt and high deficits. There was also a failure to sell government bonds at that time, which is another failure. Another country on the list is Turkey, it has its own currency plus high government debt and deficits. It has had a currency and debt crisis, look at the result in my data. Look for high government debt, high deficits and high standard deviation. If the country has these regardless of whether they have their own currency or not they seem to enter some form of currency, debt or economic crisis. Look at the scribd document at the bottom of the page linked to below, it is clear.
https://morganisteconomics.blogspot.com/p/euro-crisis.html?q=a+tip
It doesn't matter what currency it is high government debt and high deficits lead to economic crisis. There are all sorts of countries in research across the EU with their own currency's, the euro as their currency and countries that have complete control of their currency like the United Kingdom. If they have high government debt and high deficits they will enter some form of crisis. Check it out google, Romania, Turkey, Hungary and United Kingdom economic crisis. You will see they have entered one since the research was conducted and predicted that they would.