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6 Countries Have More Debt Than Their Economy

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Luc
5 hours ago, Economy said:

That's true and I also thought that was part of the reason why...

 

Although a country could for example have low consumer debt AND low government debt if let's say they run budget surpluses but the budget surplus is smaller than their trade surplus... You'd have the government taking in more than they put back but the private sector would still be in surplus...

 

Germany for example has low consumer debt and their government debt isn't all that high either (although as a % of GDP it's still a little higher than say Canada or Australia but it's still low by developed world standards)...

 

Germany has the biggest trade surplus in the developed world and this could explain why both consumers and government are in good standing while in most other nations it seems to be either one or the other

 

Interesting about the tax deduction btw. We don't have that here in Canada as far as I know. If we have any kind of returns for mortgages I'm not aware of it 

The Netherlands has an even bigger trade surplus than Germany (12% vs 7%) and the private debt is still enormous. On the other hand we've got some of the biggest pension funds in the world (about 150% of GDP, 1.4 trillion euros, increasing 7-10% per year) which makes up for it.

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Economy
2 hours ago, Luc said:

The Netherlands has an even bigger trade surplus than Germany (12% vs 7%) and the private debt is still enormous. On the other hand we've got some of the biggest pension funds in the world (about 150% of GDP, 1.4 trillion euros, increasing 7-10% per year) which makes up for it.

I guess the debt can still be high if it's domestically held

 

Based on what I read the account balance (which factors all trade including services not just physical goods) is actually about the same for Germany and Netherlands (8% of GDP) when I said Germany had the highest I meant more in total numbers but proportional to GDP I honestly don't know who has the highest

 

My Country typically always had trade surpluses too but after 2009 when manufacturing got clobbered and now the discount in our Oil Prices too we've been running trade deficits ever since :neyde:

 

 

 

jesse_batista

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Woolfsmck
On ‎2‎/‎4‎/‎2019 at 6:22 PM, Economy said:

 

But interestingly, most of these Nations with high consumer debt in turn have low government debt. Im curious on your perspective why that tends to be the case @Woolfsmck

I am not sure how they are related … coincidental or global political climate... 

Gov debt. in most industrialised nations debt seem to have military implications … 

Consumer debt. goes with the general economy, jobs and future prospects .

like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true
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Lord Temptation
On 2/5/2019 at 9:22 AM, Economy said:

@Luc @Lord Temptation

 

Your Countries got me beat :emma:

 

Tho these rankings vary slightly depending on what exactly is factored in

 

I know for private sector debt (so including companies) Australia was the worst in the world and then Canada was second worst

 

But interestingly, most of these Nations with high consumer debt in turn have low government debt. Im curious on your perspective why that tends to be the case @Woolfsmck

 

These nations I listed at the bottom like Italy and Japan and USA with lower consumer debt have way higher government debt :huh:

Sorry I’m late to the thread @Economy.

This is both surprising yet plausible. I knew about Australia and your country beautiful Canada being high up (real estate cough cough) but Switzerland and Norway is shocking, to me anyway. Always thought they were more prudential.

Then again these are all high immigration countries, which may be the highest lowest common denominator.

It’s pretty clear all countries that are wealthy depend on debt, whether public (government) or private (consumer).

You could probably argue that wealth = debt (or contracts) in high income countries.

Whereas in low income countries wealth corresponds more to gold and other more shareable forms of money like cows.

You can divide a cow but you can’t divide a contract.

Edited by Lord Temptation
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Economy
8 hours ago, Lord Temptation said:

Sorry I’m late to the thread @Economy.

This is both surprising yet plausible. I knew about Australia and your country beautiful Canada being high up (real estate cough cough) but Switzerland and Norway is shocking, to me anyway. Always thought they were more prudential.

Then again these are all high immigration countries, which may be the highest lowest common denominator.

It’s pretty clear all countries that are wealthy depend on debt, whether public (government) or private (consumer).

You could probably argue that wealth = debt (or contracts) in high income countries.

Whereas in low income countries wealth corresponds more to gold and other more shareable forms of money like cows.

You can divide a cow but you can’t divide a contract.

Interesting way to look at it

 

And Switzerland and Norway have an inflated real estate too. Most of Scandinavia does and northern Europe do too

 

I don't think it's quite as bad as Canada's for real-estate specifically but interest rates are insanely low there to prop up economy. So general borrowing thru lines of credit is probably thru the roof there if I had to guess

 

Here in Canada our Central bank has raised the benchmark rate to 1.75%... but in Switzerland for example it's -0.5% so I'm not surprised their debt is so high

 

 

Edited by Economy
jesse_batista
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Economy
9 hours ago, Woolfsmck said:

I am not sure how they are related … coincidental or global political climate... 

Gov debt. in most industrialised nations debt seem to have military implications … 

Consumer debt. goes with the general economy, jobs and future prospects .

I think this could make partial sense

 

Although Germany has a big military and their government debt isn't too bad but perhaps because their trade surplus is so big that helps recapitalization the economy and to some extent government coffers

 

Other developed nations with big military all have bad government finances like:

 

USA, UK, France, Japan all have big militaries too and all have bad Government finances (especially Japan, I don't know how their financial system hasn't gone thru a meltdown yet)

Edited by Economy
jesse_batista

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Lord Temptation
3 hours ago, Economy said:

Interesting way to look at it

 

And Switzerland and Norway have I glared real estate too. Most of Scandinavia does and northern Europe do too

 

I don't think it's quite as bad as Canada's for real-estate specifically but interest rates are insanely low there to prop up economy. So general borrowing thru lines of credit is probably thru the roof there if I had to guess

 

Here in Canada our Central bank has raised the benchmark rate to 1.75%... but in Switzerland for example it's -0.5% so I'm not surprised their debt is so high

 

 

Thanks @Economy

As boring as it may seem to some I think economics is a great subject and one that should encourage thinking outside the box. The book Freakonomics really opened my eyes about how there are so many weird ways of interpreting the economy. :kara:Everyone has their own perspective and should be encouraged to share it. Otherwise it’s a dull monoculture of heterodox textbook recyclers.

To me the economy - or maybe i should say the market - is a beautiful yet deadly mystery. But it’s a mystery everyone can get involved in. Like thise old choose-your-own-adventure books i used to read as a kid. Everyone has money but views it (and other people’s money) so differently. Yet we are all connected through money. It’s a bit like water! Makes me want to read more on ecological economics and thermoeconomics! :laughga:

Oh and also I think our rates in Oz are about the same as yours. They were at record lows for ages before they went up a couple months ago. Guess we’re all at historic lows...I don’t even know if that’s a good or bad thing :messga:

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Economy
17 minutes ago, Lord Temptation said:

Thanks @Economy

As boring as it may seem to some I think economics is a great subject and one that should encourage thinking outside the box. The book Freakonomics really opened my eyes about how there are so many weird ways of interpreting the economy. :kara:Everyone has their own perspective and should be encouraged to share it. Otherwise it’s a dull monoculture of heterodox textbook recyclers.

To me the economy - or maybe i should say the market - is a beautiful yet deadly mystery. But it’s a mystery everyone can get involved in. Like thise old choose-your-own-adventure books i used to read as a kid. Everyone has money but views it (and other people’s money) so differently. Yet we are all connected through money. It’s a bit like water! Makes me want to read more on ecological economics and thermoeconomics! :laughga:

Oh and also I think our rates in Oz are about the same as yours. They were at record lows for ages before they went up a couple months ago. Guess we’re all at historic lows...I don’t even know if that’s a good or bad thing :messga:

Australia had the central bank rate at 1.5% last time I checked so yeah it's not far off Canada's

 

These historic rates really show how the economy isn't as strong as some might suggest if we need such low rates to sustain economic growth. Historically this is not normal at all. Before the financial crisis most central banks in the developed world had the benchmarks set at somewhere between 4% and 6% and even that was lower than further back in the past now it's:

 

Switzerland: -0.75% 

Sweden: -0.5%

Denmark: -0.65%

EU: 0% 

Japan: 0% (plus quantitative easing)

UK: 0.75%

Norway: 0.75%

Australia: 1.5%

Canada: 1.75%

USA: 2.25% to 2.5% (US has a range)

 

These are pretty desperately low rates by historical standards. Btw in a comment I said Swiss rate was -0.5% but it's actually -0.75% I accidentally switched it with Sweden's rate

 

Also about the perspectives I agree. So many varying theories on economics. Also, my own opinion on a few things have changed. One major opinion of mine has changed her as recently as last week :emma:

 

 

Edited by Economy
jesse_batista
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Lord Temptation
3 minutes ago, Economy said:

Australia had the central bank rate at 1.5% last time I checked so yeah it's not far off Canada's

 

These historic rates really show how the economy isn't as strong as some might suggest if we need such low rates to sustain economic growth. Historically this is not normal at all. Before the financial crisis most central banks in the developed had the benchmarks set at somewhere between 4% and 6% and even that was lower than further back in the past now it's:

 

Switzerland: -0.75% 

Sweden: -0.5%

Denmark: -0.65%

EU: 0% 

Japan: 0% (plus quantitative easing)

UK: 0.75%

Norway: 0.75%

Australia: 1.5%

Canada: 1.75%

USA: 2.25% to 2.5% (US has a range)

 

These are pretty desperately low rates by historical standards. Btw in a comment I said Swiss rate was -0.5% but it's actually -0.75% I accidentally switched it with Sweden's rate

 

Also about the perspectives I agree. So many varying theories on economics. Also, my own opinion on a few things have changed. One major opinion of mine has changed her as recently as last week :emma:

 

 

Omg last week what happened?! :wtfga:

Also WTF with the negative interest rates! That is actually scary. Are those countries literally giving money away?

It’s like negative area...how can it even exist??? :messga:

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Economy
Just now, Lord Temptation said:

Omg last week what happened?! :wtfga:

Also WTF with the negative interest rates! That is actually scary. Are those countries literally giving money away?

It’s like negative area...how can it even exist??? :messga:

It means private banks literally get payed to borrow money from the central bank to encourage more lending and to pass on a really low prime rate for consumers...

 

There's also a deposit rate that many nations have which is how much private banks get in interest for depositing their money with the Central bank... Many deposit rates are also in the negative so that private banks don't store money and just lend it out :air:

 

As for last week it was more of a sudden realization... It was about wealth redistribution...

 

I always had the opinion that wealth redistribution was ok to a certain extent but that it should be limited because people need to be encouraged to earn their success...

 

I never favoured extreme right winged economics but I don't like extreme left either because I think it hinders investment

 

However someone was comparing earnings in relation to work... A CEO does work harder than a regular worker, and they do have more education which makes a higher wage fair... But they can earn up to 100 times the salary of a typical employee...

 

They do work harder to of gotten that position and to run it. But can you say they work 100 times harder? Impossible even if you worked 24 hours a day 7 days a week you wouldn't be working 100 times harder

 

So how people are rewarded in relation to how hard they work is extremely disproportionate and unfair.

 

I knew the free market didn't do a perfect job of rewarding work fairly but it kind of hit me just how high the degree of unfairness is because the rich that make it get a huge amount in relation to how hard they actually work

 

So I now think the whole you gotta earn your success is bogus to a large degree. Because how well rewarded you are in relation to how hard you work is extremely inconsistent by job, industry, social class etc

 

I still think taxing the rich too much is harmful to investment in the economy and has negative consequences, it's definitely not the answer to all of societies economic problems. We do need to look at productivity, efficiency, education, not wasting tax payers money etc... Simply taxing the rich a lot won't solve many problems

 

But as long as it's within reason, I now support a higher degree of redistribution than I did before. For instance a top income tax rate of 55% might be what I think now as the limit but before I might of said 45%

 

Bottom line is my opinion on "fairness" changed. I didn't see taxing the rich more who earned their money as fair. I saw it as necessary because the poor struggle and need help but I wouldn't say it was the fair thing to do from a moral standpoint

 

But now that I thought about just how disproportionately the system rewards some people's hard work in relation to others... I no longer think there's anything unfair about taxing the rich a lot more

 

Now I would even say a tax of 80% on Extremely wealthy is fair. The only reason I wouldn't support it going that high is because if the negative economic consequences on entrepreneurship and investment

 

Also I'm talking about taxing wealthy individuals themselves more not stuff like Corporations because average citizens own shares of corporations too (even if just indirectly thru their retirement funds) also higher taxes would result in higher prices of goods passed on to consumers so middle class would end up paying the taxes on Corporations at the end of the day

jesse_batista
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Lord Temptation
3 minutes ago, Economy said:

It means private banks literally get payed to borrow money from the central bank to encourage more lending and to pass on a really low prime rate for consumers...

 

There's also a deposit rate that many nations have which is how much private banks get in interest for depositing their money with the Central bank... Many deposit rates are also in the negative so that private banks don't store money and just lend it out :air:

 

As for last week it was more of a sudden realization... It was about wealth redistribution...

 

I always had the opinion that wealth redistribution was ok to a certain extent but that it should be limited because people need to be encouraged to earn their success...

 

I never favoured extreme right winged economics but I don't like extreme left either because I think it hinders investment

 

However someone was comparing earnings in relation to work... A CEO does work harder than a regular worker, and they do have more education which makes a higher wage fair... But they can earn up to 100 times the salary of a typical employee...

 

They do work harder to of gotten that position and to run it. But can you say they work 100 times harder? Impossible even if you worked 24 hours a day 7 days a week you wouldn't be working 100 times harder

 

So how people are rewarded in relation to how hard they work is extremely disproportionate and unfair.

 

I knew the free market didn't do a perfect job of rewarding work fairly but it kind of hit me just how high the degree of unfairness is because the rich that make it get a huge amount in relation to how hard they actually work

 

So I now think the whole you gotta earn your success is bogus to a large degree. Because how well rewarded you are in relation to how hard you work is extremely inconsistent by job, industry, social class etc

 

I still think taxing the rich too much is harmful to investment in the economy and has negative consequences, it's definitely not the answer to all of societies economic problems. We do need to look at productivity, efficiency, education, not wasting tax payers money etc... Simply taxing the rich a lot won't solve many problems

 

But as long as it's within reason, I now support a higher degree of redistribution than I did before. For instance a top income tax rate of 55% might be what I think now as the limit but before I might of said 45%

 

Bottom line is my opinion on "fairness" changed. I didn't see taxing the rich more who earned their money as fair. I saw it as necessary because the poor struggle and need help but I wouldn't say it was the fair thing to do from a moral standpoint

 

But now that I thought about just how disproportionately the system rewards some people's hard work in relation to others... I no longer think there's anything unfair about taxing the rich a lot more

 

Now I would even say a tax of 80% on Extremely wealthy is fair. The only reason I wouldn't support it going that high is because if the negative economic consequences on entrepreneurship and investment

 

Also I'm talking about taxing wealthy individuals themselves more not stuff like Corporations because average citizens own shares of corporations too (even if just indirectly thru their retirement funds) also higher taxes would result in higher prices of goods passed on to consumers so middle class would end up paying the taxes on Corporations at the end of the day

Wow thank you so much for your clear and concise thoughts on such a tricky, personal subject. I agree with you too, i think anyone who is on a salary (i.e. non-entrepreneurs) should have an income that reflects the type of equity we all dream about and know is entirely realisable. After all, with all respect to their qualifications and experience, a CEO is still one guy out of many who applied for the position AND GOT LUCKY. It’s like winning the Lotto - but by sharing his winnings he is setting an example from the highest order that the harmony (dare I say - the syncronicity?) of the organisation is more important than an extra holiday for him. It shows that sacrificing individual reward (when they are already at extreme heights) can be greater for the entity as a living community. Otherwise a CEO is literally playing with other people’s money and keeping the biggest share for himself - which shows complete condascension for those working equally as hard as him (albeit in different duties etc) but only earning a fraction. And possibly even not even getting acknowledged as a productive worker, unlike the CEO who is generally worshipped like a rockstar.

Entrepreneurs, on the other hand, I feel because they actually take company risks with their own money deserve all they get. 

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Economy
17 minutes ago, Lord Temptation said:

Wow thank you so much for your clear and concise thoughts on such a tricky, personal subject. I agree with you too, i think anyone who is on a salary (i.e. non-entrepreneurs) should have an income that reflects the type of equity we all dream about and know is entirely realisable. After all, with all respect to their qualifications and experience, a CEO is still one guy out of many who applied for the position AND GOT LUCKY. It’s like winning the Lotto - but by sharing his winnings he is setting an example from the highest order that the harmony (dare I say - the syncronicity?) of the organisation is more important than an extra holiday for him. It shows that sacrificing individual reward (when they are already at extreme heights) can be greater for the entity as a living community. Otherwise a CEO is literally playing with other people’s money and keeping the biggest share for himself - which shows complete condascension for those working equally as hard as him (albeit in different duties etc) but only earning a fraction. And possibly even not even getting acknowledged as a productive worker, unlike the CEO who is generally worshipped like a rockstar.

Entrepreneurs, on the other hand, I feel because they actually take company risks with their own money deserve all they get. 

I agree about entrepreneurs. There's no point on risking a lot starting a company then being taxed the hell out of everything you earn

 

But I don't support high taxes on the companies themselves anyway. I think that's bad for investment not to mention you end up taxing middle class along with it indirectly because of the higher costs passed on to consumers. Company startups is also where the real hard work and risk lies

 

But when I talk about a 55% tax rate I'm not talking about someone who makes $200,000 or even $300,000 I'm talking about the really wealthy (like $500,000 a year or more)

 

A new entrepreneur wouldn't be making mad money like that when he first finds success anyway. This would apply to entrepreneurs that got exeptionally lucky and earn WAY more than the amount of work they put into the company would really justify

 

Most company owners that risked a lot never come close to making mad money like that. It's usually in the 6 figures but not that insanely high

 

So I'm really not even talking about someone in the top 1% that earns $300,000 a year let's say (although I'd still tax them more than regular middle class)...

 

I'm more talking about the top 0.1% that earn so much money and to some extent got lucky that no amount of hard work would ever justify earnings that high if the economic system was truly fair....

 

It's people like that that if you were to tax like let's say 55% I think it's perfectly fair

 

Also back to entrepreneurs, a lot of their wealth/assets are tied up to the company they started itself which is usually more than their income from the company itself...

 

If you look at it that way, a CEO that simply got hired would indeed be taxed more than an entrepreneur who actually started the company and has a lot of his assets in the company value since we're talking about taxing income not their existing assets or net worth

 

My boss has a networth of millions due to the company he owns and there's no networth tax to take away the assets he rightfully and fairly put work into building...

 

The main tax he pays is on his actual income which is somewhere around $300,000 or so depending on the year. It's fair that he gets taxed a little more than me but I certainly wouldn't suggest taxing an entrepreneur like him 55%. Again I'm talking about the exeptionally high earners that to be frank largely got lucky if u find that much success (regardless of how hard u might have worked)

Edited by Economy
jesse_batista

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Woolfsmck

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Edited by Woolfsmck
like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true

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Woolfsmck

screwed up something in last post... all blank...lol

like a cat in a sil, I observe life, moving and still. My words give a clue,look inside to see whats true

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Economy
1 hour ago, Woolfsmck said:

screwed up something in last post... all blank...lol

What were u trying to say?

jesse_batista

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