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Unsustainable Economics & Politics! (Read 2052 times)
perceptions_now
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Unsustainable Economics & Politics!
Sep 7th, 2016 at 7:14pm
 
Un-sustainability of a Government debt (Gross)
Any level above 70-90%, of a country’s Debt to GDP ratio, is a level generally accepted by Economists as being too high & therefore being unsustainable.
But, that position may have hanged somewhat, in recent years?

Personally, my preference would be to keep the Gross Debt to GDP ratio UNDER 40%, whenever possible, as it could prove to create some quite difficult circumstances.
The exceptional to this rule WOULD HAVE BEEN DURING THE PEAK YEARS OF THE BABY BOOM, when Growth would have generally seen any accumulated Debt repaid without massive difficulty!
But, the time to properly repay the Baby Boomer Boom years, would properly have been BEFORE THE BABY BOOMER BOOM YEARS ENDED AND THEN NOT TO HAVE GONE BACK INTO DEBT.
BUT, THAT JUST DIDN'T HAPPEN, EITHER IN OZ, NOR IN ALMOST ALL OTHER COUNTRIES!


The level of tolerable Government debt depends on a multitude of factors (such as)
1) If the borrowing currency is also a major reserve currency?
If it is, then it may be seen to reduce risk levels & increase the possibility of "Printing" more money, to assist in servicing the Debt issue?
Some related issues are currently percolating in the USA.

2) Who will own the government Debt, Locals or Foreign sources?
The larger the Foreign component, the greater the difficulties that may be experienced.

3) The Likely level of interest rates that will be payable on the Government Debt, over the short, medium & longer term?
Higher rates of interest (particularly short to medium term), make higher Debt MORE difficult to service, whereas Lower rates of interest may make Debt LESS difficult to service, but that may depend on how the Economy is tracking, at the time.

4) But, expected Economic Growth, is the most important factor!
Higher levels of expected Real Economic Growth, may increase the likelihood of higher Tax Revenues, thus possibly increasing the likelihood of being able to afford Debt Repayment.


During the modern Economic era, particularly over the period between 1955 to 2005, Economic Growth has largely been fuelled by Population Growth & a massive increase in the Supply of Energy (at relatively cheaper Prices) , plus a significant contribution from modern Technology!

Lower levels of expected Population/Economic Growth, would significantly increase the likelihood of relatively lower Tax Revenues, thus making Debt repayment more difficult, irrespective of interest rate levels &/or which Political party happens to be in power.




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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #1 - Sep 7th, 2016 at 7:31pm
 
The real Economy is now being driven by a few major factors

Each of these has, or is, in the process of changing course, compared to their positions, over the last 60-70 years in particular & those factors are -
1) Demographic Changes
 
Over the last 70 years or so, we have seen the largest Population explosion in human history, having gone from around 2.5 Billion in 1950, to 7 Billion in 2012.
However, Global Population levels are now in the process of Peaking, before going into actual Decline, over the next 20-30 years.
The major effect of these Global Demographic changes, has been that the rate of increase in DEMAND for all forms of Goods & Services skyrocketed between WW2, until the early part of this new century.
BUT, since then, as the rate of the rate of Population Growth has slowed, that together with other Global changes, have seen DEMAND Growth Rates for almost everything, starting to slow.
Over the next 20-30 years, DEMAND for the vast majority of Goods & Services will first level off, before going into actual Decline, in line with likely Demographic & other Changes & no amount of stimulus will change these basic facts!


2) Energy (Supply & Pricing)
 
This is one of 3 great enablers, to the modern Demographic surge, particularly between 1945 to 2005.

The massive discoveries of Fossil Fuels (such as Oil, Coal & Gas) and the Supply at very low Prices, greatly assisted the massive Population Growth over that period.
However, the rate of growth in Supply started to taper off in the late 1990's and that became more evident in the first decade of this new century. The resultant lack of Supply & increasing Demand showed up in massive Price hikes, with Oil going from $10 a barrel in 1999, to around $148 a barrel in 2008.
The major effect here, is that Fossil Fuels & Oil in particular are involved in a huge number of Products & Services AND the increasing Prices of Fossil Fuels drove large Price hikes across the board.
Thus, as both Demographics & Energy Supply/Pricing started to lower Demand, the “Great Economic Decline got underway” and notwithstanding comments from TPTB, that “Economic Decline” is still underway! The resulting “New Economy” sparked a massive Decline in Energy Pricing, with Oil going Down from US$148 a barrel in 2008, to around US$26 in early 2016, before temporarily rebounding to nearly US$50, in August 2016.
As and When, the “Final Straw arrives & breaks the back of the REAL Economy”, then our Real Demographic facts & Lower Demand, along with Energy Pricing (including Oil), will again reassert the Lower Economic trend and Oil will again head South, perhaps hitting under US$20 a barrel. 


It should be noted, THERE IS NO VIABLE ENERGY ALTERNATIVE THAT CAN DELIVER SUFFICIENT ENERGY VOLUME, AT THE RIGHT PRICE AND DO SO, WHILST BEING ABLE TO SUPPORT ALL THE PRODUCTS & SERVICES THAT FOSSIL FUELS CAN.
It should also be noted, that as Energy Supply finally succumbs and heads South, Then Prices may also rebound, But that will take some time, yet!
Why will it take some time?
Because, the Local & Global Politicians
(Almost All of them), plus TPTB will support “Energy Supply, which is fraught with Problems, such as Fracking”, rather than highlight other problem issues!
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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #2 - Sep 7th, 2016 at 7:46pm
 
The other 2 great enablers are

Climate -
We have had a goldilocks climate for several hundred years, which has greatly assisted in accommodating our Global Population Explosion, primarily by way of providing sufficient Food & Fresh Water.

Technology -
Human Technology has exploded, particularly over the last 200 years and that has provided an enormous boost in Productivity, again assisting the Population explosion in a myriad of ways.

That said, the goldilocks climate is now in the process of ending, whether it be natural or human assisted means, is still being argued out. Although, I would agree there is a degree of human cause involved in the Climate Change, which is now proceeding.

Which leaves us with Technology and as I have said previously, Technology may again ride over the hill to our rescue, BUT AGAIN I WOULD COUNCIL AGAINST RELYING ON A LAST MINUTE, OUT OF THE BLUE CAVALRY CHARGE BY THE TECHNOLOGY BRIGADE, AS IT IS SIMPLY NOT GOOD PUBLIC POLICY, NOR CAN WE RELY ON IT, TO ACTUALLY HAPPEN!

So, IF we want a reasonable future for ourselves, our children & our children's children, then we should already have been making some tough decisions, for quite some time, But our Politicians (almost All of Them) & others (in Big Business & Unions) have concentrated more on their own Short Term/Best interests, at the expense of the Best Long Term interests of THE WHOLE PUBLIC!
   

So, what should WE expect?
Well, WE may still be able to avoid the worst outcomes, IF WE start making those really tough decisions & WE start making those decisions NOW!
BUT, in making our decisions, WE MUST AVOID THE OLD FIXES, AS THEY WON’T WORK NOW & WE MUST ONLY CONSIDER WHAT IS IN THE BEST LONG TERM INTERESTS OF THE WHOLE PUBLIC, NOT JUST IN THE SHORT TERM INTERESTS OF A FEW POLITICIANS & THEIR “FRIENDS”!

We NOW need -
1) A COMPLETE REVIEW of ALL Government Taxes, Expenditure and government Policies.
2) Specific & URGENT IMPLEMENTATION of Tax increases, particularly getting rid of some Tax Rorts (particularly at the Big end of town & the Internationals) & lower Expenditure measures (particularly getting rid of Rorts) & an emphasis on Productivity.
3) Co-operation across all Political parties, for WHAT IS IN THE BEST LONG TERM INTERESTS OF THE WHOLE PUBLIC, NOT JUST IN THE SHORT TERM INTERESTS OF A FEW POLITICIANS & THEIR “FRIENDS”, is now required and it is required URGENTLY !
AND, all of the above, will also need to take place Globally.

What is NOW LIKELY -

Can this & much more be done? The answer is YES!

Will it be done?
On that, the realist in me, is nowhere near as confident AND the flow on effects from the Demographic & Energy factors, will place Growth in particular extremely difficult and return to past Economics absolutely impossible!

So, at some point, probably in the not too distant Future, an event will happen, that has not been anticipated or not fully anticipated, by TPTB and it will break “the Economic Camels back”, thus setting off the “Greatest Recession”.

And, all the excuses of the Local & Global Politicians
(Almost All of them), will simply be a load of –
C
redible
R
eliable
A
bundant
P
aradoxes

In any event, knowledge is everything and at least if you are armed with what may really be happening, instead of what the Politicians (Almost All of them) & TPTB are saying, then your chances of getting better outcomes, may hopefully be improved.

Good Luck! I think, we may need it!
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WJV
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Re: Unsustainable Economics & Politics!
Reply #3 - Sep 11th, 2016 at 12:41pm
 
You should be ashamed for writing such crap. You are not funny at all.
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hawil
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Re: Unsustainable Economics & Politics!
Reply #4 - Sep 11th, 2016 at 1:17pm
 
WJV wrote on Sep 11th, 2016 at 12:41pm:
You should be ashamed for writing such crap. You are not funny at all.


Perceptions-now.
Why starting another post on this subject?
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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #5 - Sep 11th, 2016 at 3:30pm
 
WJV wrote on Sep 11th, 2016 at 12:41pm:
You should be ashamed for writing such crap. You are not funny at all.


Well, I agree, IT certainly isn't funny!

As for CRAP, I also agree, IT is what almost all of the Politicians come out with -
Credible
Reliable
Abundant
Paradoxes

Other than that, if you don't agree with "What I'm saying & Why I'm saying it", then perhaps you should explain why?

But, don't bother with the Nazis Economic plan!
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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #6 - Sep 11th, 2016 at 3:36pm
 
hawil wrote on Sep 11th, 2016 at 1:17pm:
WJV wrote on Sep 11th, 2016 at 12:41pm:
You should be ashamed for writing such crap. You are not funny at all.


Perceptions-now.
Why starting another post on this subject?


Well, I thought it appropriate to put things together, as much as I could, in terms of "What & Why",
given that I have also been thinking the "When", is starting to get closer!

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miketrees
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Re: Unsustainable Economics & Politics!
Reply #7 - Sep 11th, 2016 at 3:38pm
 
P&N

Do you think our economy is behaving strangely because the Baby Boomers hold so much money and they are in saving mode ,, not invest and earn mode.

I mean they wont be making plans for more than a 30 year period will they?
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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #8 - Sep 12th, 2016 at 12:32pm
 
miketrees wrote on Sep 11th, 2016 at 3:38pm:
P&N

Do you think our economy is behaving strangely because the Baby Boomers hold so much money and they are in saving mode ,, not invest and earn mode.

I mean they wont be making plans for more than a 30 year period will they?


Yes, But that's only a part of what is happening!

Whilst the Baby Boomers, who are the largest generation in human history, are in "slow down", because of "retirement issues", there are also other very important Demographic issues in play, as well as a number of "Non-demographic issues"! 

And, it's not just the Reality of the Changes in what is affecting the Local & Global Economy, which are affecting the Economy now, it's also the actions or lack of appropriate actions, taken by Local & Global Politicians (Almost all of them) & TPTB.
Why? Because they put their own short term interests first, over the last 2-3 decades, instead of acting in the Best, Long Term interests of the whole Population.

Therefore, instead of mitigating the worst aspects of Demographic & Other changes, which were pretty much locked in, they have actually made the situation worse!

We now find ourselves in a real bind and we are stuck with options that are all undesirable, But now we have little real options!

Anyway, as I said, Good Luck, I think we may need it!


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miketrees
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Re: Unsustainable Economics & Politics!
Reply #9 - Sep 12th, 2016 at 7:04pm
 
I will be dead soon,,, not my problem in the long to medium time
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The_Barnacle
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Re: Unsustainable Economics & Politics!
Reply #10 - Sep 17th, 2016 at 12:19pm
 
perceptions_now wrote on Sep 11th, 2016 at 3:36pm:
given that I have also been thinking the "When", is starting to get closer!


But you have been saying that for years.

I think that you should make a pledge that if this so called global economic collapse hasn't happened by the end of 2017 - which is your latest prediction - then you should just give up on it.
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The Right Wing only believe in free speech when they agree with what is being said.
 
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Re: Unsustainable Economics & Politics!
Reply #11 - Sep 24th, 2016 at 3:29pm
 
Which nation provided for its citizens in this manner?

Free Healthcare
Free Electricity
Interest free loans
Newly weds received $50,000 to find a home
Mothers received $5,000 on birth of a child
Citizens received a percentage of ALL oil sales and petrol was $0.14 per Litre
Government paid 50% of the price of your car
Unemployed received the average salary for their profession in Benefits
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Mini Ice Age (2014-2029)
Dr Sircus cures cancer with Baking Soda and Magnesium - Jethro the MENTAL GIANT & his flute madness
 
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perceptions_now
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Re: Unsustainable Economics & Politics!
Reply #12 - Sep 30th, 2016 at 12:14pm
 
The_Barnacle wrote on Sep 17th, 2016 at 12:19pm:
perceptions_now wrote on Sep 11th, 2016 at 3:36pm:
given that I have also been thinking the "When", is starting to get closer!


But you have been saying that for years.

I think that you should make a pledge that if this so called global economic collapse hasn't happened by the end of 2017 - which is your latest prediction - then you should just give up on it.


No!

What I've been explaining is that the "Status Quo", of recent times (the last 200 years or so), is coming to an end and why that is happening!

AND, because of "the nature of the Beast" (the Status Quo & TPTB) they have been & are, trying every trick in the book (plus a few extras), to postpone the inevitable, which makes the "Final Collapse timing" a very difficult issue to predict.

That said, I am now of the opinion that "the Final scenario" is getting reasonably close!

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