Madeira Consorcio

139 Madeira Consorcio meeting 27.1.2024

Jan 29, 2024 at 5:18 pm | Posted in Posts | Leave a comment
Tags: Consorcio, debt, deficit, economy, household, Madeira, us

We met in the Gallery and saw an interesting video about the National Debt (refers to USA but goes also for Europe and other countries) by Stephanie Kelton, economist:

Also interesting:

(with stupid advertising, but ok…)

The economy was C.’s work area and he explained it also very well to us!

 C.’s resume:

A household debt is fundamentally different from a sovereign deficit.   A household debt must be paid back over the agreed  time period, and this is not the case with a deficit incurred when taken up by the Federal Reserve or the European Bank.   We were illustrated through a graph how the red of the deficit can be seen when turned as the black income to all of us. The provision in all of this is that the deficit must be limited to one’s own resources and within set inflation limits.   The actions by the Federal Reserve and European Bank during the pandemic showed how in effect this was already practised and used to keep the economies afloat and our countries and societies  functioning.   The pandemic was clearly an unforeseen disaster that called for unprecedented action and it is my belief that we are again close to another disaster unless we now take the same bold action as we did during  the pandemic.   I am referring here in particular to warnings that we no longer live in a post war period but in a pre war one. And thus to prevent the disaster of a war within the next 5 years or so we must act as we did during the pandemic.

So every state deficit has a positive side. If the result of the spending is a thriving economy, the country can service the debt.

 The overview of the debt-to-ratio of several countries:

https://www.ceicdata.com/en/indicator/germany/government-debt–of-nominal-gdp#

Biden understands this, he is pushing money into the US economy with the Inflation Reduction Act. This is a problem for other countries because he is getting a step ahead in front of other economies.