peterms Posted January 27, 2015 Share Posted January 27, 2015 it's certainly a point the Greeks would happily explore in a bit more detail! Tenuously linked to this, I heard on BBC R4 tonight that we still pay off interest every year from perpetual loans, including one we took out for £2B to fight World War 1 I couldn't help thinking it was doubly odd that firstly we were still paying interest on a 100 year old debt, but secondly, what immoral scum bucket nebulous bank / market / country would lend money to fight a war on perpetual interest? To put it in perspective, they then mentioned that we've also still been paying back interest for money borrowed to get over the 1711 South Sea Bubble. Just have a little think about that. We still pay interest for a loan taken out to bail out 'the market' from a disastrous piece of economic business 304 years ago. We are being right royally had and being overcharged for the privilege. I gather the war loans for 39-45 were repaid 5 or 6 years ago, so I'd be surprised if nthenolder ones were still outstanding, unless at incredibly low levels of interest and therefore not worth repaying before others. But the main point is this. These "loans" that we areb told we take out are not previously existing money, not something that someone had to give up so that we could use that spending power. They are electronic transactions which create credits, at no cost, financial or opportunity cost, to the "lender". Which raises two questions. Why should we pay interest? And why doesn't the state issue the money, or " loans" instead? Link to comment Share on other sites More sharing options...
tonyh29 Posted January 27, 2015 Share Posted January 27, 2015 I think the war bonds are due to be paid off (or rather the debt will be refinanced at a lower interest rate) in March. didn't Osborne say they were paying them off in full ? I think it's some other legacy bonds being refinanced , maybe even the South sea bubble ones ? Link to comment Share on other sites More sharing options...
chrisp65 Posted January 27, 2015 Share Posted January 27, 2015 yeah apparently the older ones were considered at 3.5% too low to bother paying off, so these oldest 'debts' apparently still exist - but might now get settled in any 12 month period I can understand not paying as the interest doesn't work out, but you'd imagine after the first 40 or 60 or 100 years somebody would work out this is all getting a bit Wonga Link to comment Share on other sites More sharing options...
snowychap Posted January 27, 2015 Share Posted January 27, 2015 I think the war bonds are due to be paid off (or rather the debt will be refinanced at a lower interest rate) in March.didn't Osborne say they were paying them off in full ? I think it's some other legacy bonds being refinanced , maybe even the South sea bubble ones ?Yes, I probably wasn't too clear.By refinanced, I just meant that the DMO would raise the funds required to call the War Loans (coupon - 3.5%) by taking out another loan for the same amount at the much lower current interest rate. Link to comment Share on other sites More sharing options...
snowychap Posted January 27, 2015 Share Posted January 27, 2015 (edited) yeah apparently the older ones were considered at 3.5% too low to bother paying off, so these oldest 'debts' apparently still exist - but might now get settled in any 12 month period I can understand not paying as the interest doesn't work out, but you'd imagine after the first 40 or 60 or 100 years somebody would work out this is all getting a bit Wonga It's not really ever about settling debt though, is it? It's about borrowing from a new Peter to pay an old Peter. Apologies to all Peters. Edited January 27, 2015 by snowychap Link to comment Share on other sites More sharing options...
peterms Posted January 27, 2015 Share Posted January 27, 2015 yeah apparently the older ones were considered at 3.5% too low to bother paying off, so these oldest 'debts' apparently still exist - but might now get settled in any 12 month period I can understand not paying as the interest doesn't work out, but you'd imagine after the first 40 or 60 or 100 years somebody would work out this is all getting a bit Wonga But that's the entire point. Bankers "lend" money they never had in the first place, rake in interest, we pay in real goods and services. Transfer of resources from poor to rich. Link to comment Share on other sites More sharing options...
blandy Posted January 27, 2015 Moderator Share Posted January 27, 2015 .. I heard on BBC R4 tonight that we still pay off interest every year from perpetual loans, including one we took out for £2B to fight World War 1 I couldn't help thinking it was doubly odd that firstly we were still paying interest on a 100 year old debt, but secondly, what immoral scum bucket nebulous bank / market / country would lend money to fight a war on perpetual interest?..I may be wrong on this, but I suspect that at least in part, if not in full, the interest may be on bonds, rather than bank loans. Ii.e. Gov't issued interest bearing gilts/bonds. And then no gov't has ever quite got round to buying them back? Link to comment Share on other sites More sharing options...
Risso Posted January 27, 2015 Share Posted January 27, 2015 It said on R4 last night that the interest was so low that it hadn't been worth paying them back. Not sure it's a story at all tbh, more just a nice soundbite, ie "we've paid for the war!" whilst ignoring the slightly more worrying and infinitely more expensive pension requirement for example. Link to comment Share on other sites More sharing options...
Xann Posted January 28, 2015 Share Posted January 28, 2015 Panicked super rich buying boltholes with private airstrips to escape if poor rise up. Hedge fund managers are buying up remote ranches and land in places like New Zealand to flee to in event of wide-spread civil unrest. Mirror Heh heh heh Link to comment Share on other sites More sharing options...
MakemineVanilla Posted January 28, 2015 Share Posted January 28, 2015 Panicked super rich buying boltholes with private airstrips to escape if poor rise up. Hedge fund managers are buying up remote ranches and land in places like New Zealand to flee to in event of wide-spread civil unrest. Mirror Heh heh heh Or, alternatively, rich folk attempting to live out their Atlas Shrugged (Ayn Rand) fantasies. 1 Link to comment Share on other sites More sharing options...
peterms Posted January 28, 2015 Share Posted January 28, 2015 Giles Fraser on debt write-offs, starts at 1 hr 48 mins here (lasts for 3 mins). Takes in Socrates, the Bible, Judaism, Graeber, Syriza and Merkel. Worth a listen. Link to comment Share on other sites More sharing options...
MakemineVanilla Posted January 28, 2015 Share Posted January 28, 2015 Giles Fraser on debt write-offs, starts at 1 hr 48 mins here (lasts for 3 mins). Takes in Socrates, the Bible, Judaism, Graeber, Syriza and Merkel. Worth a listen. It didn't do much for me, to be honest. Socratic dialogues always seemed rigged and there is no way he would win an argument on VT. Fraser references the bible but then equates debt to slavery but there is no condemnation of slavery in the bible. Graeber is an anarchist. Syrizia is not an anti-austerity party but are a Green party (ecology is in their name), which believes in eco-socialism and ecofeminism, which wants to cut consumption and nurture the earth. Merkel just wants her nation's money back from people who lied to get it. Link to comment Share on other sites More sharing options...
veloman Posted January 28, 2015 Share Posted January 28, 2015 I was watching 'Breakfast' on BBC tv this morning and they had sent a reporter to a port where she did her report surrounded by cranes, containers etc. In the background was a large cargo vessel unloading it's cargo of .... wait for it .... coal ; and the reporter stated that this was one of the main commodities to be unloaded here. Now with an HND in Business Studies, I can hardly claim to be an expert on macro-economics but do remember the concept of 'Terms of Trade' but this just doesn't feel right as there are large reserves still underground in the UK - well the North Staffs coalfield for certain. It just flickered across my mind that someone destroyed the coal industry for vindictive reasons rather than economic. Surely not ! Link to comment Share on other sites More sharing options...
Xela Posted January 28, 2015 Share Posted January 28, 2015 Wasn't it much cheaper to import coal from abroad than mine our own? Wasn't that one of the reasons why the coal industry declined? (plus the desire to break the unions) Link to comment Share on other sites More sharing options...
bickster Posted January 28, 2015 Moderator Share Posted January 28, 2015 Wasn't it much cheaper to import coal from abroad than mine our own? Wasn't that one of the reasons why the coal industry declined? (plus the desire to break the unions)Its never quite as simple as that. The government of the time gave figures based purely on tonnage. That isn't the whole story with coal though, there are many different grades of coal based on its calorific values (the heat it gives off), British coal in the main was of a very high value, the prices quoted for the imported coal were usually Polish prices (still communist at the time), trouble is Polish coal was low calorific value so it was much cheaper. You had to import much more coal to cover what we lost. Even after it was all over and only Tower Colliery still existed in Wales, it was producing coal for the local Power Stations, but it was still of such high calorific value that they has to import Polish coal anyway, because the Welsh coal was burning at too high a temperature for the power stations to be able to cope with on its own.In other words, that argument was bullshit. 3 Link to comment Share on other sites More sharing options...
peterms Posted January 28, 2015 Share Posted January 28, 2015 Giles Fraser on debt write-offs, starts at 1 hr 48 mins here (lasts for 3 mins). Takes in Socrates, the Bible, Judaism, Graeber, Syriza and Merkel. Worth a listen. It didn't do much for me, to be honest. Socratic dialogues always seemed rigged and there is no way he would win an argument on VT. Fraser references the bible but then equates debt to slavery but there is no condemnation of slavery in the bible. Graeber is an anarchist. Syrizia is not an anti-austerity party but are a Green party (ecology is in their name), which believes in eco-socialism and ecofeminism, which wants to cut consumption and nurture the earth. Merkel just wants her nation's money back from people who lied to get it.Sorry if I wasn't clear. What I liked was that in the Thought For The Day slot, listened to largely by people who are on average older, wealthier, more middle class, more conservative and more accepting of the received wisdom of the neoliberal consensus the BBC so faithfully reflects, he has tackled a central tenet of this worldview (debts must be paid) and done it with reference to source ideas which they will either be sympathetic with by virtue of their faith or upbringing, or respect by virtue of the scholarship quoted. As such, he may have left a seed of doubt in the minds of many, which may or may not mature into a wider and more critical reflection on some similar received ideas. Not bad for 3 minutes. Link to comment Share on other sites More sharing options...
chrisp65 Posted January 28, 2015 Share Posted January 28, 2015 Wasn't it much cheaper to import coal from abroad than mine our own? Wasn't that one of the reasons why the coal industry declined? (plus the desire to break the unions) without wishing to go over old ground, it didn't look particularly cheap or cost effective in the coal exporting dock town where I grew up the price paid appeared quite high 1 Link to comment Share on other sites More sharing options...
tonyh29 Posted January 28, 2015 Share Posted January 28, 2015 Giles Fraser on debt write-offs, starts at 1 hr 48 mins here (lasts for 3 mins). Takes in Socrates, the Bible, Judaism, Graeber, Syriza and Merkel. Worth a listen. It didn't do much for me, to be honest. Socratic dialogues always seemed rigged and there is no way he would win an argument on VT. Tbf has anyone ever won an argument on VT ? 1 Link to comment Share on other sites More sharing options...
chrisp65 Posted January 28, 2015 Share Posted January 28, 2015 Giles Fraser on debt write-offs, starts at 1 hr 48 mins here (lasts for 3 mins). Takes in Socrates, the Bible, Judaism, Graeber, Syriza and Merkel. Worth a listen. It didn't do much for me, to be honest. Socratic dialogues always seemed rigged and there is no way he would win an argument on VT. Tbf has anyone ever won an argument on VT ? If I had 20p for every time I find myself pitching an argument I'm not really 100% behind and wondering 'how did I get here?', I'd have £1.60 Link to comment Share on other sites More sharing options...
mockingbird_franklin Posted January 29, 2015 Share Posted January 29, 2015 Wasn't it much cheaper to import coal from abroad than mine our own? Wasn't that one of the reasons why the coal industry declined? (plus the desire to break the unions) Its never quite as simple as that. The government of the time gave figures based purely on tonnage. That isn't the whole story with coal though, there are many different grades of coal based on its calorific values (the heat it gives off), British coal in the main was of a very high value, the prices quoted for the imported coal were usually Polish prices (still communist at the time), trouble is Polish coal was low calorific value so it was much cheaper. You had to import much more coal to cover what we lost. Even after it was all over and only Tower Colliery still existed in Wales, it was producing coal for the local Power Stations, but it was still of such high calorific value that they has to import Polish coal anyway, because the Welsh coal was burning at too high a temperature for the power stations to be able to cope with on its own. In other words, that argument was bullshit. like most that government used to justify it's detrimental actions 1 Link to comment Share on other sites More sharing options...
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