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Author Topic: the debt trap
otter
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posted 13 July 2006 11:53 AM      Profile for otter        Edit/Delete Post  Reply With Quote 
here is an interesting presentation made by Connie Fogal in which the total combined debt in Canada is reported to be 3 times the Canadian money supply. Canadian indebtedness

One can only shudder at the thought of what the u.s. of a's debt is compared to its own money supply.


From: agent provocateur inc. | Registered: Feb 2006  |  IP: Logged
500_Apples
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posted 13 July 2006 11:56 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
SSSSSSSHHHHHHHHHHHHH.
From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
Stephen Gordon
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posted 13 July 2006 01:26 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
quote:
Originally posted by otter:
here is an interesting presentation made by Connie Fogal in which the total combined debt in Canada is reported to be 3 times the Canadian money supply.

I can't for the life of me see why that particular factoid has any meaning.


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Jacob Two-Two
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posted 13 July 2006 02:43 PM      Profile for Jacob Two-Two     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well, it certainly sounds bad on the face of it. Can you explain why it doesn't matter what relation the debt has to the money supply?
From: There is but one Gord and Moolah is his profit | Registered: Jan 2002  |  IP: Logged
Stephen Gordon
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posted 13 July 2006 03:42 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
If I had to guess - and apparently I do - at the original author's point, the concern is an imbalance between debt and the ability to pay that debt.

I know that 'money' is often used interchangeably with 'wealth', but that's not how the data for the money supply should be used; real money balances are a very small fraction of total wealth. I'm unaware of any data that suggests that total Canadian debt is anywhere near as large as total Canadian wealth.

[ 13 July 2006: Message edited by: Stephen Gordon ]


From: . | Registered: Oct 2003  |  IP: Logged
Fidel
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posted 13 July 2006 03:53 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
Linda McQuaig's "wealth parade" analogous to the distribution of wealth in Canada, was based on Statistics Canada data from 1984. Since then, inequality in Canada has risen.

BasicIncome.com

quote:
The first marchers in the parade are actually under the ground – that is, they do not have any wealth, and in fact carry net debts. It isn't until 10 minutes later that the first "break-even" Canadian marches by: the first Canadian who carries no debt, but owns no net wealth either, and hence marches by exactly at ground-level. After 15 minutes, we see the first dwarfs, standing just three feet tall...
During the last minute of the wealth parade, marchers are as tall as Toronto's CN Tower, over one thousand feet tall. And in the last second of the parade, the truly lopsided nature of wealth ownership in Canada is stunningly revealed: the very last marchers in this parade are supernatural giants, towering some 200 miles above the rest of the parade!.

From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Stephen Gordon
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posted 13 July 2006 04:08 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
Fidel, you've got to stop doing this. The only relationship I can see between what you wrote and the thread is that they both have the word 'wealth' in it.

It's very possible that someone else may want to return to the original subject; you should give them a chance to do so.


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Fidel
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posted 13 July 2006 05:28 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
You mentioned wealth in Canada, Stephen. And I merely pointed out how much of chasm the wealth gap is becoming. The income gap is a canyon. There, now let's get back to who's in debt in Canada, shall we?.
From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
Stephen Gordon
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posted 13 July 2006 05:47 PM      Profile for Stephen Gordon        Edit/Delete Post  Reply With Quote 
Hey! Look out the window! Is that a flying turtle?
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Erik Redburn
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posted 13 July 2006 10:16 PM      Profile for Erik Redburn     Send New Private Message      Edit/Delete Post  Reply With Quote 
I think one of the mistakes many monetary reformists make about 'money supply' is they ignore that most of it's no longer circulating through our economy as dollar bills or goods on shelves.

However, the high personal debt to income ratio is I believe a valid concern, as it means that we have become a nation of borrowers rather than savers and it further restricts the ability of consumers to spend. In theory this means further financial re-investment has to be based, not upon existing capital reserves, but upon further economic gambles and debt, facilitating further demand for ever greater growth. Growth which domestic markets maybe less able to consume. (or our environment less able to provide) That's the biggest fear I believe.

Regardless of whether the big banks or investment firms (often the same now) call in the loans or not, if enough businesses can no longer maintain payments then the whole debt chain may start to implode, with the financial markets following. (or perhaps preceding) Long run this may free a lot of people from their debt chains again, but in immediate terms it would be catastrophic. That again is the theory, or at least a simplistic little run down of it.

I suspect the problem goes deeper into the de-industralization of more 'developed' Western economies and replacement with non-productive 'service' economies -but that's a whole other Thread at least.

[ 13 July 2006: Message edited by: EriKtheHalfaRed ]


From: Broke but not bent. | Registered: Feb 2004  |  IP: Logged
Fidel
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posted 14 July 2006 11:55 AM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
Global Ideas Bank

Depreciating currencies Ideas detail
179 votes, Feasibility 91% Originality 83% Humour 63%

quote:

The Worgl Schillings

In the early 1930s the small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency.

Its burgomaster, Michael Unterguggenberger, faced an empty treasury, because the unemployed citizens could not pay their taxes; roads and bridges needed repair and parks needed maintenance, for which the town could not pay; and idle men and women earned no wages.

He recognised that all three problems could be solved if he could find the connecting link.

That link was money. The three problems coexisted because no one had any of it, and his simple solution was to create money locally.

He issued numbered 'labour certificates' to the value of 32,000 schillings, in denominations of 1, 5 and 10 schillings, respectively. These became valid only after being stamped at the town hall, and depreciated monthly by 1 per cent of their nominal value.

It was possible for the holders to 'revalue' them by the purchase, before the end of each month, of stamps from the town hall, in the process creating a relief fund.


'The small town of Worgl in the Austrian Tyrol, suffering like every other town in Europe and America from the Great Depression, took the unlikely step of issuing its own currency'

The depreciation not only encouraged rapid circulation, but also the payment of taxes, past, current and upcoming. These taxes were used to provide social and public services.


[ 14 July 2006: Message edited by: Fidel ]


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged
otter
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posted 17 July 2006 11:48 AM      Profile for otter        Edit/Delete Post  Reply With Quote 
What a cool idea, thanks for that Fidel
From: agent provocateur inc. | Registered: Feb 2006  |  IP: Logged
Fidel
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posted 17 July 2006 12:13 PM      Profile for Fidel     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Stephen Gordon:
Hey! Look out the window! Is that a flying turtle?

So let's hear more about how wealthy Canadian's are, Stephen. Got any good GDP jokes ?.


From: Viva La Revolución | Registered: Apr 2004  |  IP: Logged

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