Mark_BC.
China is an environmental mess, but so was the west 100 years ago. We eventually passed the Clean Air and Clean Water Acts that cleaned up 95% of the pollution and their population will demand the same thing when they get to that point in their industrial evolution. The US had the historic opportunity to lead humanity forward by weaning us off oil, but decided to fight two unnecessary wars instead. The US can still achieve energy independence using alternatives for one third the price of domestic oil production, but it chooses oil because it can make three times as much money. Yes, we are all in a bad place. My main point is that their eastern-style reasoning will serve them better than our western-style greed.
The Middle East still has plenty of oil, it is still the easiest to get to in the world, and therefore the cheapest. China has the manufacturing capacity to trade solar panels for oil and make them more energy efficient, which would help to fix both of their problems. China seems to be wiser about such things. The US has more of a history of whipping up Middle East tensions to increase arms sales for the profiteers. Such a strategy may keep you in power for the short term, but for humanity over the long term, it is disastrous, and we have no one to blame but ourselves.
I migrated to British Columbia almost two years ago and I am starting to see the same despair that you describe. But it is a whole lot better than where I moved from in the southern US where the population itself has lost the concept of what a reasoned-based democracy is supposed to be. Most of the people there are focused much more on individual profits than public achievement. Here in BC, the vast majority of people still understand democracy itself, plus you have made much better choices for the past 30 years. Canadian leadership may have strayed in more recent years, but the hearts of the people have not. Relatively speaking, BC still sets a good example for the rest of North America. Please don't lose heart, it is so much better up here. It is not nearly as bad as the ultra-conservative south where the latest fashion statement is a handgun.
So...who, exactly, is going to be paying all of that debt back?
The answer: Japan's steadily shrinking pool of citizens.
This is simple math, and the trends are very, very clear. Japan has a swiftly rising debt load and a falling population."
This is a fundamental misunderstanding which is widespread. I suggest you read Warren Mosler, Bill Mitchell, L Randall Wray or Wynne Godley to develop your understanding of macro economics. Essentially, government debts are never a burden on future generations. Government lack of investment would be. Spending money today, provided it is spent to a useful purpose such as building carbon neutral houses, or green power stations, or planting forests or whatever ecologically beneficial capital development you can think of, can only benefit future generations. The "debt" the government incurs is entirely virtual (since money is a construct and the only legitimate source of money, as opposed to credit, is the government) and could be written off at any time. Bill Mitchell has an excellent website which explains in great detail exactly why government debt is a red herring and that the real problem is private debt.
So...who, exactly, is going to be paying all of that debt back?
The answer: Japan's steadily shrinking pool of citizens.
This is simple math, and the trends are very, very clear. Japan has a swiftly rising debt load and a falling population."
This is a fundamental misunderstanding which is widespread. I suggest you read Warren Mosler, Bill Mitchell, L Randall Wray or Wynne Godley to develop your understanding of macro economics. Essentially, government debts are never a burden on future generations. Government lack of investment would be. Spending money today, provided it is spent to a useful purpose such as building carbon neutral houses, or green power stations, or planting forests or whatever ecologically beneficial capital development you can think of, can only benefit future generations. The "debt" the government incurs is entirely virtual (since money is a construct and the only legitimate source of money, as opposed to credit, is the government) and could be written off at any time. Bill Mitchell has an excellent website which explains in great detail exactly why government debt is a red herring and that the real problem is private debt.
I agree with a lot of what you say, but not about your worries about government spending. MMT has some weaknesses but it explains this issue very well.
The "debt" the government incurs is entirely virtual (since money is a construct and the only legitimate source of money, as opposed to credit, is the government) and could be written off at any time.
Yeah, but "writing off" the "debt" at "any time" would end up creating "losses" for "real people" since the government's "debt" liability is someone else's "asset." Money was spent, resources were used, and the "debt" is simply the accounting for that resource spend - resources spent today rather than being available to be spent in future generations. I.e. the debt is a marker for oil that didn't need to be pumped, trees that didn't need to be cut down, iron ore that didn't need to me mined, and so on.
So as long as you're ok nailing pensions, 401k accounts for savers, and money market funds that hold a vast amount of the nation's savings via this write off that "could happen at any time" I suppose I agree with you. [In other words - I don't.]
Spending money today, provided it is spent to a useful purpose such as building carbon neutral houses, or green power stations, or planting forests or whatever ecologically beneficial capital development you can think of, can only benefit future generations.
Fortunately for this line of argument, the government spends very very little money on carbon neutral houses, green power stations, or planting forests. Can we agree that the rest of government spending that uses debt funding for reasons other than the ones you laid out - typically expensive programs that will get politicians re-elected - are a mis-allocation of resources and will cause future generations to suffer?
Yeah, I've read those views, and I think they are really terribly out of touch with reality. It's all theory and no practical experience.
In a contest between convoluted macroeconomic 'explanations' and simple accounting, I'll go with simple accounting every time.
In a debt-based system, one man's asset is another man's liability. It's really that simple.
Sure, it's theoretically possible for a government to just decide to not pay its debts, but good luck trying to borrow ever again at reasonable rates after everyone notes the punishing losses taken by the previous victims.
I would invite you to make your case in a more concrete fashion and address the issues that Dave has raised in the above comment. Given that the government does not hold its own debt, that debt sits out in the private market in private hands. When the government defaults on that, how is that not a burden on the private citizens who are the ultimate holders of all that debt (either directly, or once removed, as in the case of pensioners)?
Just one point – I believe 75% of new debt issuance is bought by the Federal Reserve, which many like to lump in with the government. So cancelling new debt issuance doesn't directly cheat anyone out of their invested money. It's like Krugman's trillion dollar platinum coin idea.
What would be the impact of cancelling all this debt the Fed owns? I realize that the whole thing is a ponzi scheme that cannot continue but I don't fully understand the implications of the Fed holding all these things on its balance sheet. I have read that this debt the Fed holds is used as an asset by the banks, so I presume the losers would be all the other legitimate debt holders who get hosed when the financial system fails when the debt (assets) got erased. I know James Turk has talked about this so maybe I'll go read that interview…
I want to refer toDavosto state my point. Plans are developed, but they ignore the basic problem - Debt.
It is mind-boggling that the leaders who convened in Davosfor the World Economic Forum can discuss a myriad of economic elements still lingering on a precipice, but every single one fails to name debt as the number one problem of the global economy.
Debt is being discussed all the time at this august meeting. It is looked at from all angles, dissected, proportioned, pushed, pulled, restructured, and every imaginable solution offered for how to handle the debt, but not a single presenter bluntly said, there is too much debt and it is killing the world economy.
Therefore, plans are useless, if huge spending is still implemented.