Comments on: Mega sovereign writeoff could work http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/ Wed, 07 Oct 2015 17:23:32 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: dankosh http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2067 Fri, 14 Feb 2014 13:41:54 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2067 only spend what the government dares to tax, isn’t that the answer.

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By: QuietThinker http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2066 Fri, 14 Feb 2014 01:34:53 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2066 Default of government debt is a ticket to third world status. The author assumes that a debt near the GDP is unsustainable. Many people assume that based on ideology alone, a false analogy to household debt, or on the falsified Reinhart-Rogoff study, but it is only an assumption.

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By: dankosh http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2065 Thu, 13 Feb 2014 19:10:32 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2065 this is a prank article, right?!

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By: Bob9999 http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2064 Thu, 13 Feb 2014 17:08:20 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2064 You’ve got to be kidding.

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By: matthewslyman http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2063 Thu, 13 Feb 2014 12:23:45 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2063 …Take a different approach, and irrespective of the impressions the debtor tries to give in public; their private response will be predictable:
“PARTAAAAYYYYYYYY!!!!!!!”

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By: matthewslyman http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2062 Thu, 13 Feb 2014 12:21:56 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2062 If a family member came to you and said,
“I know I’ve been on an alcohol-binge for the last 10–15 years, and I know I’m in debt by 1×–2× annual salary with non-discretionary outgoings at 90%–95% of gross earnings; but I’ve decided it’s time to call a halt to it: it’s bringing the whole family down. I need your help. I want you to pay down 50% of my debt, and then I’ll turn my life around and start paying down the remainder.”
— What would you say if you had spent the last 10–15 years scrimping and saving to keep your head above water and stay out of debt? Would your answer be different if you were wealthy and would find it easy to help with the money? (You don’t have to give a straight yes-or-no answer…) My response in every case would be:
“Show me that you’re serious, quit the booze, reform your expenditures; and then we’ll talk about it again: if I see that you’re serious, then I’ll start to help you, and continue for as long as I am able and for as long as I see progress on your part.”

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By: BidnisMan http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2061 Thu, 13 Feb 2014 07:17:33 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2061 The biggest single debt imbalance (US-China) is already a result of ‘national decree’ in the form of China fixing it currency level. Why not fix one decree with another, in the form of a write-off.

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By: OneOfTheSheep http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2060 Thu, 13 Feb 2014 01:27:10 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2060 “Governments have brought the problem on themselves. The underlying issue is the longstanding refusal to match taxes to expenditures, especially during years of peace and prosperity.” Yep, and there is no reason whatsoever to believe that any of the many reasons governments have done this have changed over time.

“…the calculations from the International Monetary Fund started, …gross government debt of advanced economies…is much too high for the overall economic good.” “The standard prescription is many years of sound government finance. That technique can succeed, but only if there is an implausibly long period of political restraint and reasonably strong economic growth.” Again, you state the obvious.

“There are three plausible ways to get rid of large quantities of unwanted bonds.

The first is through a large writedown.” And, after that is done, what fool would step forward AGAIN to ever again “invest” in bonds backed only by government promises?

“Alternatively, instead of writing down debts, governments could inflate up wages and prices.” That would give a considerable windfall for all whose income is indexed. Everyone else becomes a victim and there is little precedent as to precisely what would then happen to the “well being” of the majority of currently employed American workers whose income is NOT indexed. Already government is inflating the currency and attempting to dilute the index by which purchasing parity is supposed to be guaranteed those on disability and Social Security.

“Finally, governments could print debts away. As borrowings mature, they would be redeemed with newly created money. The monetisation would be followed quickly by new taxes which would reduce the expanded money supply to non-inflationary levels. The reclaimed funds would then be destroyed.” Hey, America has been doing this since WW II. A car that cost me $3600 in 1970 today costs $22,000+, and the income tax rates on that 22,000 are a lot more than they were on that 3600. When America is already on the wrong road, the idea of “going faster” as a solution is nothing less that frightening.

Yes, the ethics and social tensions here would demand a level of intelligence, competence and political will unheard of in either American political leadership (oxymoron) or the bureaucracy that moves the money here and there.

Eventually there WILL be a default in some form, the sole remaining questions being “when” and “who loses most”. No question as to who will come out best, either. The American political leadership (oxymoron) and the bureaucracy ALWAYS come out on top.

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By: jprose http://blogs.reuters.com/edward-hadas/2014/02/12/mega-sovereign-writeoff-could-work/comment-page-1/#comment-2059 Wed, 12 Feb 2014 20:57:32 +0000 http://blogs.reuters.com/edward-hadas/?p=631#comment-2059 In the United States investment transactions total $500 trillion dollars per year. A one year transaction tax of 0.3% would pay off the federal debt.

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