Summer digressions on public debt

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Philippe Schutt
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Re: Summer Digressions on Public Debt




by Philippe Schutt » 24/08/16, 19:47

increasing social disparities, where that?
http://www.insee.fr/fr/themes/tableau.a ... ATnon04246
for me they would rather tend to reduce ...
On the other hand, the decline in the return on capital penalizes the pensioners in the first place, which was the objective of the last governments.
And finally, but where did the windfall of the increase in the central bank balance sheet go ???
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Re: Summer Digressions on Public Debt




by Ahmed » 24/08/16, 21:48

If we look at the data in the table you are citing, Philippe (which only concerns the distribution of wealth among the wealthiest), there appears to be almost stagnation. This must be balanced in several ways: the statistics produce results according to the criteria of data selection, a delicate exercise itself, which is assumed, if objectivity prevails. In addition, large fortunes are international and therefore difficult to fit into a national framework; finally, various clever montages (front companies) make it possible to display a modest standard of living, while holding a considerable fortune (Cf. the heiress of Loréal).
You write:
On the other hand, the decline in the return on capital penalizes the pensioners in the first place, which was the objective of the last governments.

For me, it appears that it was rather the fight against inflation that was the objective, an objective also enshrined in European treaties. The high inflation period of the 70s in the middle of the following decade left bad memories among the wealthy classes and it is therefore out of the question to return to this configuration.
On the other hand, when we speak of an overall decrease in the return on capital, we must distinguish between that which is observed in the industrial sector and the sectoral increase in the financial industry (which thus indirectly supports the physical activity). The result, as you might expect, is an accumulation of abstract value that serves to maintain the flow of this kind of historically unprecedented dynamic.
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Philippe Schutt
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Re: Summer Digressions on Public Debt




by Philippe Schutt » 27/08/16, 09:01

inflation is low and government action is trying to push it up.
What worries me is that, the standard of living being generally rather falling, inflation being almost zero, the central banks massively injecting liquidity, the operation is unbalanced therefore the money injected goes elsewhere.
recovery of banks' balance sheets? financing of a negative trade balance? Misappropriation by elected officials, a new caste with rapid enrichment?
And during this time, to the debt of the states we add the debt of cities, regions, and Europe. I would have preferred to be able to accuse the rich, it would have been simple and clear, but there everything is diffuse or very well camouflaged. But they are not numerous enough and their enrichment is not important enough to explain the current massive impoverishment.
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Re: Summer Digressions on Public Debt




by Ahmed » 27/08/16, 12:22

Indeed, what appears on the surface is a trend towards a decrease in the standard of living of the middle and lower classes, an increase in the wealthiest, but explain one phenomenon by the other, even if it is far from to be totally absurd, remains insufficient.
If we want to hope to understand the process, we should not ask the question from the angle you have chosen: "why a standard of living at half mast when so much money is injected?", But rather from this other: "the conditions allowing the functioning of the capital not being any more fulfilled, how can one not observe a systemic collapse?"
The answer, you can guess, is this massive injection of liquidity which is used to support our standard of living and creates a kind of rent (ultimately illusory) which pays us (among other things) for all our Chinese gadgets, but this accumulated money in the middle empire has no value, since massive use would immediately devalue it. We therefore owe our ease, not to any merit (which we are strongly inclined to believe), but above all to particular conditions of the functioning of an economic system, conditions which are changing, which will reveal the reality and the fragility in which this dependence places us.
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Re: Summer Digressions on Public Debt




by Philippe Schutt » 02/09/16, 18:21

So if I understood correctly, the manna of massive monetary creation and debt is consumed to give the average and poor population a standard of living above their means or at least above the wealth they created. Considering the already highest level of our taxes and social transfers, impossible to tax the rich even more, only a significant drop in income would stop the bleeding, and would also have the advantage of making our production more competitive which would reduce unemployment and consequently improve certain indicators.
I say some because the GDP would undoubtedly drop and since it serves as a divider for many indices, our apparent situation would deteriorate.
Greek style?
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Re: Summer Digressions on Public Debt




by Ahmed » 02/09/16, 21:23

The "windfall" * of monetary creation does not only benefit the average and poor population, because it percolates from top to bottom ...
On the taxation of the "rich", we must not forget that the most fortunate manage to largely escape tax thanks to clever financial arrangements which are beyond the reach of basic controllers (Bercy reserves the right to indulgent consideration of their friends' statements). More generally, on enrichment, we will have a bad idea of ​​things if we limit ourselves to a French perception.

A significant drop in income, via a regression in wages, is not ready to have the effects you describe, for two reasons: first, industrial production is quite low and it is the service sector that is predominant, which only rarely generates exports, then, this "competitiveness" could only be obtained ** by an alignment with Chinese wages or equivalent which would not solve anything, especially since this recipe is starting to no longer operate in the middle empire.
The functioning of our system supposes the continuous and increasing recourse to monetary creation, therefore to debt since it does not serve to support a creation of wealth, neither physical nor abstract (I mean here a creation of wealth abstract indirect and correlative to the injection of liquidity).

* Rather than manna, it would be better to speak of rent, as there are oil or other rents and our standard of living depends more on this effect than on specific merits. In other words, our "merits" which are undoubtedly real, would not be enough to explain our relatively flourishing situation, which the future will take care of demonstrating ...
** This increase in competitiveness can be obtained in various ways, but is only valid for a fairly low differential, beyond a certain level, the fall in wages is never offset by an increase in activity , we are more then in the "work more to earn less", which is the case of the peripheral countries and now of Greece (as you noted) and it is there that the policy of the 'austerity.
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Re: Summer Digressions on Public Debt




by Philippe Schutt » 04/09/16, 11:20

Yes, but the wealthiest, friends of Bercy, are not numerous enough for their fate to affect the figures for the trade deficit or the budget deficit. And with redistributive taxes, the wealth of individuals percolates from the bottom up, even if it does so more and more. Only bankers have direct access to the money supply.
Not at the Chinese level, we remain protected by the cost of transportation and the complexities of importing. This would also have a beneficial effect on our consumption, which would be a little less "wasted". And a relocation of part of the production to France is desirable, given our trade balance.
From my point of view, the ecological catastrophe shows that the ideology which would like to give to the greatest number the highest standard of living is a fatal dead end. Yet it is always she who leads the ball.
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Re: Summer Digressions on Public Debt




by Ahmed » 04/09/16, 15:12

I think we would be surprised at what escapes the tax authorities, this not to mention what comes under the "kindness" of Bercy, thanks to shell companies like those of the heiress of Loréal (because it is worth it well?) which allow to remain in the legality: this impacts directly, if not the trade balance, at least the national budget balance and obviously has no redistributive effect ...
Of course, bankers have direct access to the money supply, but it is immediately to redistribute it to all those who have the capacity to take advantage of it.
On the bottom, I am of your opinion, with these few nuances ready and if one is obsessed by the questions of inequalities (important from an ethical point of view and even from other points of view), one condemns to ignore the essential.
When I spoke of wages at the Chinese level, it was obviously to force the line. The question of relocating production does not make sense since relocation was a response to the growing difficulty of making a profit, given the evolution of the economic process: we are now in a phase which shows the temporary and illusory nature of this attempt.
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Re: Summer Digressions on Public Debt




by Obamot » 06/09/16, 10:25

In Brussels, there are courageous people who resist:

https://www.youtube.com/watch?v=57CKaFHK4U8
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Re: Summer Digressions on Public Debt




by Obamot » 06/09/16, 17:01

Well, it's English (a roof ...) but it's so true ...

https://www.youtube.com/watch?v=aW9JGESD7kM
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