Euro ‘hanging by thread’ as £605bn bailout fund risks collapse over French
credit rating

Bob Lyddon said there was a risk of the European Stability Mechanism's
spending power "falling off a cliff" - severely curtailing its ability to
lend money to members of the EU27.

By CIARAN MCGRATH
12:50, Wed, Aug 2, 2023 | UPDATED: 13:40, Wed, Aug 2, 2023

The possible downgrading of France’s credit rating would have a
catastrophic impact on the “firewall” relied upon by the Eurozone to
safeguard the single European currency, a UK-based economist has claimed.

The European Stability Mechanism (ESM), an intergovernmental organisation
based in Luxembourg, was established in 2012 with the intention of
providing instant access to financial assistance programmes for member
states of the eurozone in the event of emergencies.

However, in an article uploaded to the website of the Institute for
Research in Economic and Fiscal Issues, tax specialist Bob Lyddon warned
the system was no longer fit for purpose.

He wrote: “The European Stability Mechanism (ESM) backstops the euro.”

Its nominal size was £605billion (€705billion) but its lending capacity is
lower at £430billion (€500billion), with the main condition being that the
EU27’s guarantees of the ESM’s solvency need to be good enough to convince
credit rating agencies to assign the ESM a AAA rating, Mr Lyddon explained.

The difference between the ESM’s nominal size and its lending capacity
acknowledged that the guarantees of some member states were not good
enough, he added.

Mr Lyddon continued: “This structure is hanging by a thread. Standard &
Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
roof falls in.”

[Full report at the link below]

<https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>

--
Spike

Am 15/08/2023 um 08:22 schrieb Spike:
>

>
> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>

I've been saying this for 30 years: it's only a matter of weeks until
the Euro collapses.

--
Ottavio Caruso

On 15/08/2023 09:22, Spike wrote:
> This structure is hanging by a thread. Standard &
> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
> on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
> roof falls in.”

The EU will breach any laws rules and regulations to protect its
currency and its sovereignty.

Think SNP, writ larger.

--
"In our post-modern world, climate science is not powerful because it is
true: it is true because it is powerful."

Lucas Bergkamp

On 15/08/2023 09:29, Ottavio Caruso wrote:
> Am 15/08/2023 um 08:22 schrieb Spike:
>>
>
>>
>> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>>
>
>
> I've been saying this for 30 years: it's only a matter of weeks until
> the Euro collapses.
>

It looks as though Eurosceptic Bob Lyddon has as well.

--
Colin Bignell

On Tue, 15 Aug 2023 10:19:03 +0100
The Natural Philosopher <tnp@invalid.invalid> wrote:

> On 15/08/2023 09:22, Spike wrote:
> > This structure is hanging by a thread. Standard &
> > Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
> > rating on June 2, 2023. If at any point France’s rating drops to
> > AA-, the ESM’s roof falls in.”
>
> The EU will breach any laws rules and regulations to protect its
> currency and its sovereignty.
>
> Think SNP, writ larger.
>
Indeed. When to Euro was launched, most of the founder members did not
meet the Maastricht Criteria for joining without a lot of creative
accounting and rule-bending. Ironically, the UK did meet the Criteria.

--
Joe

On 15/08/2023 11:43, Joe wrote:
> On Tue, 15 Aug 2023 10:19:03 +0100
> The Natural Philosopher <tnp@invalid.invalid> wrote:
>
>> On 15/08/2023 09:22, Spike wrote:
>>> This structure is hanging by a thread. Standard &
>>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
>>> rating on June 2, 2023. If at any point France’s rating drops to
>>> AA-, the ESM’s roof falls in.”
>>
>> The EU will breach any laws rules and regulations to protect its
>> currency and its sovereignty.
>>
>> Think SNP, writ larger.
>>
> Indeed. When to Euro was launched, most of the founder members did not
> meet the Maastricht Criteria for joining without a lot of creative
> accounting and rule-bending. Ironically, the UK did meet the Criteria.
>
The ECB and the Euro are the two chef mechanism whereby individual
nations cannot set their own economic policies.

--
“Politics is the art of looking for trouble, finding it everywhere,
diagnosing it incorrectly and applying the wrong remedies.”
― Groucho Marx

On 15/08/2023 09:22, Spike wrote:
>
> Euro ‘hanging by thread’ as £605bn bailout fund risks collapse over French
> credit rating
>
> Bob Lyddon said there was a risk of the European Stability Mechanism's
> spending power "falling off a cliff" - severely curtailing its ability to
> lend money to members of the EU27.
>
> By CIARAN MCGRATH
> 12:50, Wed, Aug 2, 2023 | UPDATED: 13:40, Wed, Aug 2, 2023
>
> The possible downgrading of France’s credit rating would have a
> catastrophic impact on the “firewall” relied upon by the Eurozone to
> safeguard the single European currency, a UK-based economist has claimed.
>
> The European Stability Mechanism (ESM), an intergovernmental organisation
> based in Luxembourg, was established in 2012 with the intention of
> providing instant access to financial assistance programmes for member
> states of the eurozone in the event of emergencies.
>
> However, in an article uploaded to the website of the Institute for
> Research in Economic and Fiscal Issues, tax specialist Bob Lyddon warned
> the system was no longer fit for purpose.
>
> He wrote: “The European Stability Mechanism (ESM) backstops the euro.”
>
> Its nominal size was £605billion (€705billion) but its lending capacity is
> lower at £430billion (€500billion), with the main condition being that the
> EU27’s guarantees of the ESM’s solvency need to be good enough to convince
> credit rating agencies to assign the ESM a AAA rating, Mr Lyddon explained.
>
> The difference between the ESM’s nominal size and its lending capacity
> acknowledged that the guarantees of some member states were not good
> enough, he added.
>
> Mr Lyddon continued: “This structure is hanging by a thread. Standard &
> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
> on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
> roof falls in.”
>
> [Full report at the link below]
>
> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>

I am more worried about the GBP. With debt exceeding 100% of GDP it
makes our economy more sick that the EU's.

On Tue, 15 Aug 2023 11:43:34 +0100, Joe <joe@jretrading.com> wrote:

>On Tue, 15 Aug 2023 10:19:03 +0100
>The Natural Philosopher <tnp@invalid.invalid> wrote:
>
>> On 15/08/2023 09:22, Spike wrote:
>> > This structure is hanging by a thread. Standard &
>> > Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
>> > rating on June 2, 2023. If at any point France’s rating drops to
>> > AA-, the ESM’s roof falls in.”
>>
>> The EU will breach any laws rules and regulations to protect its
>> currency and its sovereignty.
>>
>> Think SNP, writ larger.
>>
>Indeed. When to Euro was launched, most of the founder members did not
>meet the Maastricht Criteria for joining without a lot of creative
>accounting and rule-bending. Ironically, the UK did meet the Criteria.

IIRC a while ago the accountants appointed to verify and approve the
EU's accounts refused to sign them off for several years on the trot.

--
Chris

On 15/08/2023 09:22, Spike wrote:
>
> Euro ‘hanging by thread’ as £605bn bailout fund risks collapse over French
> credit rating
>
> Bob Lyddon said there was a risk of the European Stability Mechanism's
> spending power "falling off a cliff" - severely curtailing its ability to
> lend money to members of the EU27.
>
> By CIARAN MCGRATH
> 12:50, Wed, Aug 2, 2023 | UPDATED: 13:40, Wed, Aug 2, 2023
>
> The possible downgrading of France’s credit rating would have a
> catastrophic impact on the “firewall” relied upon by the Eurozone to
> safeguard the single European currency, a UK-based economist has claimed.
>
> The European Stability Mechanism (ESM), an intergovernmental organisation
> based in Luxembourg, was established in 2012 with the intention of
> providing instant access to financial assistance programmes for member
> states of the eurozone in the event of emergencies.
>
> However, in an article uploaded to the website of the Institute for
> Research in Economic and Fiscal Issues, tax specialist Bob Lyddon warned
> the system was no longer fit for purpose.
>
> He wrote: “The European Stability Mechanism (ESM) backstops the euro.”
>
> Its nominal size was £605billion (€705billion) but its lending capacity is
> lower at £430billion (€500billion), with the main condition being that the
> EU27’s guarantees of the ESM’s solvency need to be good enough to convince
> credit rating agencies to assign the ESM a AAA rating, Mr Lyddon explained.
>
> The difference between the ESM’s nominal size and its lending capacity
> acknowledged that the guarantees of some member states were not good
> enough, he added.
>
> Mr Lyddon continued: “This structure is hanging by a thread. Standard &
> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
> on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
> roof falls in.”
>
> [Full report at the link below]
>
> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>

Good job Brexit

On 15/08/2023 12:22, Fredxx wrote:
> On 15/08/2023 09:22, Spike wrote:
>>
>> Euro ‘hanging by thread’ as £605bn bailout fund risks collapse over
>> French
>> credit rating
>>
>> Bob Lyddon said there was a risk of the European Stability Mechanism's
>> spending power "falling off a cliff" - severely curtailing its ability to
>> lend money to members of the EU27.
>>
>> By CIARAN MCGRATH
>> 12:50, Wed, Aug 2, 2023 | UPDATED: 13:40, Wed, Aug 2, 2023
>>
>> The possible downgrading of France’s credit rating would have a
>> catastrophic impact on the “firewall” relied upon by the Eurozone to
>> safeguard the single European currency, a UK-based economist has claimed.
>>
>> The European Stability Mechanism (ESM), an intergovernmental organisation
>> based in Luxembourg, was established in 2012 with the intention of
>> providing instant access to financial assistance programmes for member
>> states of the eurozone in the event of emergencies.
>>
>> However, in an article uploaded to the website of the Institute for
>> Research in Economic and Fiscal Issues, tax specialist Bob Lyddon warned
>> the system was no longer fit for purpose.
>>
>> He wrote: “The European Stability Mechanism (ESM) backstops the euro.”
>>
>> Its nominal size was £605billion (€705billion) but its lending
>> capacity is
>> lower at £430billion (€500billion), with the main condition being that
>> the
>> EU27’s guarantees of the ESM’s solvency need to be good enough to
>> convince
>> credit rating agencies to assign the ESM a AAA rating, Mr Lyddon
>> explained.
>>
>> The difference between the ESM’s nominal size and its lending capacity
>> acknowledged that the guarantees of some member states were not good
>> enough, he added.
>>
>> Mr Lyddon continued: “This structure is hanging by a thread. Standard &
>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
>> on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
>> roof falls in.”
>>
>> [Full report at the link below]
>>
>> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>
> I am more worried about the GBP. With debt exceeding 100% of GDP it
> makes our economy more sick that the EU's.

Governments don't have to pay off their debts. And we can always print
more money (QE).

--
Max Demian

Ottavio Caruso <ottavio2006-usenet2012@yahoo.com> wrote:
> Am 15/08/2023 um 08:22 schrieb Spike:
> >
>
> >
> > <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
> >
>
>
> I've been saying this for 30 years: it's only a matter of weeks until
> the Euro collapses.

July 2022:
https://www.express.co.uk/comment/expresscomment/1640038/Eurozone-meltdown-collapse-cost-UK-billions-despite-Brexit

June 2019:
https://brexitcentral.com/why-the-eurozones-fate-makes-an-immediate-brexit-vital/

etc etc

On 15/08/2023 11:43, Joe wrote:
> On Tue, 15 Aug 2023 10:19:03 +0100
> The Natural Philosopher <tnp@invalid.invalid> wrote:
>
>> On 15/08/2023 09:22, Spike wrote:
>>> This structure is hanging by a thread. Standard &
>>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
>>> rating on June 2, 2023. If at any point France’s rating drops to
>>> AA-, the ESM’s roof falls in.”
>>
>> The EU will breach any laws rules and regulations to protect its
>> currency and its sovereignty.
>>
>> Think SNP, writ larger.
>>
> Indeed. When to Euro was launched, most of the founder members did not
> meet the Maastricht Criteria for joining without a lot of creative
> accounting and rule-bending. Ironically, the UK did meet the Criteria.
>
Well we always were, and still are good at creative accounting...

On 15/08/2023 12:24, Chris Hogg wrote:
> On Tue, 15 Aug 2023 11:43:34 +0100, Joe <joe@jretrading.com> wrote:
>
>> On Tue, 15 Aug 2023 10:19:03 +0100
>> The Natural Philosopher <tnp@invalid.invalid> wrote:
>>
>>> On 15/08/2023 09:22, Spike wrote:
>>>> This structure is hanging by a thread. Standard &
>>>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
>>>> rating on June 2, 2023. If at any point France’s rating drops to
>>>> AA-, the ESM’s roof falls in.”
>>>
>>> The EU will breach any laws rules and regulations to protect its
>>> currency and its sovereignty.
>>>
>>> Think SNP, writ larger.
>>>
>> Indeed. When to Euro was launched, most of the founder members did not
>> meet the Maastricht Criteria for joining without a lot of creative
>> accounting and rule-bending. Ironically, the UK did meet the Criteria.
>
> IIRC a while ago the accountants appointed to verify and approve the
> EU's accounts refused to sign them off for several years on the trot.
>

The UK's Auditor General said at the time that if he had to meet the
same strict standards as the EU set, he would not have been able to sign
off the UK's accounts either.

--
Colin Bignell

On 15/08/2023 11:43, Joe wrote:
> On Tue, 15 Aug 2023 10:19:03 +0100
> The Natural Philosopher <tnp@invalid.invalid> wrote:
>
>> On 15/08/2023 09:22, Spike wrote:
>>> This structure is hanging by a thread. Standard &
>>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA
>>> rating on June 2, 2023. If at any point France’s rating drops to
>>> AA-, the ESM’s roof falls in.”
>>
>> The EU will breach any laws rules and regulations to protect its
>> currency and its sovereignty.
>>
>> Think SNP, writ larger.
>>
> Indeed. When to Euro was launched, most of the founder members did not
> meet the Maastricht Criteria for joining without a lot of creative
> accounting and rule-bending. Ironically, the UK did meet the Criteria.
>

You idiots still believe what Farage tells you? You will never learn.
TW

On Tue, 15 Aug 2023 13:52:48 +0100, Max Demian
<max_demian@bigfoot.com> wrote:

>On 15/08/2023 12:22, Fredxx wrote:
>> On 15/08/2023 09:22, Spike wrote:
>>>
>>> Euro ‘hanging by thread’ as £605bn bailout fund risks collapse over
>>> French
>>> credit rating
>>>
>>> Bob Lyddon said there was a risk of the European Stability Mechanism's
>>> spending power "falling off a cliff" - severely curtailing its ability to
>>> lend money to members of the EU27.
>>>
>>> By CIARAN MCGRATH
>>> 12:50, Wed, Aug 2, 2023 | UPDATED: 13:40, Wed, Aug 2, 2023
>>>
>>> The possible downgrading of France’s credit rating would have a
>>> catastrophic impact on the “firewall” relied upon by the Eurozone to
>>> safeguard the single European currency, a UK-based economist has claimed.
>>>
>>> The European Stability Mechanism (ESM), an intergovernmental organisation
>>> based in Luxembourg, was established in 2012 with the intention of
>>> providing instant access to financial assistance programmes for member
>>> states of the eurozone in the event of emergencies.
>>>
>>> However, in an article uploaded to the website of the Institute for
>>> Research in Economic and Fiscal Issues, tax specialist Bob Lyddon warned
>>> the system was no longer fit for purpose.
>>>
>>> He wrote: “The European Stability Mechanism (ESM) backstops the euro.”
>>>
>>> Its nominal size was £605billion (€705billion) but its lending
>>> capacity is
>>> lower at £430billion (€500billion), with the main condition being that
>>> the
>>> EU27’s guarantees of the ESM’s solvency need to be good enough to
>>> convince
>>> credit rating agencies to assign the ESM a AAA rating, Mr Lyddon
>>> explained.
>>>
>>> The difference between the ESM’s nominal size and its lending capacity
>>> acknowledged that the guarantees of some member states were not good
>>> enough, he added.
>>>
>>> Mr Lyddon continued: “This structure is hanging by a thread. Standard &
>>> Poor’s Global Ratings attached a ‘Negative Outlook’ to France’s AA rating
>>> on June 2, 2023. If at any point France’s rating drops to AA-, the ESM’s
>>> roof falls in.”
>>>
>>> [Full report at the link below]
>>>
>>> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>>
>> I am more worried about the GBP. With debt exceeding 100% of GDP it
>> makes our economy more sick that the EU's.
>
>Governments don't have to pay off their debts. And we can always print
>more money (QE).

Are UK debts always denominated in Pounds Sterling? If we print more
money, does this not lead to a downgrading of Sterling and having to
pay a higher rate of interest on future loans?

On 15 Aug 2023 at 12:22:17 BST, Fredxx wrote:

> <div id="editor" contenteditable="false">> [Full report at the link below]
>>
>> <https://www.express.co.uk/news/politics/1797868/eurozone-euro-eu-france-credit-rating>
>
> I am more worried about the GBP. With debt exceeding 100% of GDP it
> makes our economy more sick that the EU's.
> </div>
> <div class="footer" onclick="setCursorToBottom()"></div>

I find government receipts - that is, income from tax etc - a better measure
of debt resilience. It is after all what the government has to play with, once
it's laundered GDP, when it comes to servicing debt.

So, income is currently running at £1T. Debt is about £2.5T. I'd say there's
not too much to worry about there, in theory. Problem is that debt is being
used to prop up day to day spending, and that's not sustainable.

And AIUI the UK has a nasty habit of going interest only, and not paying off
the actual debt. Plus buying back soon to mature bonds by borrowing. So
something could hit the fan at some point . . .

--
Cheers, Rob, Sheffield UK

On Wed, 16 Aug 2023 04:43:13 -0000 (UTC)
RJH <patchmoney@gmx.com> wrote:

>
> And AIUI the UK has a nasty habit of going interest only, and not
> paying off the actual debt. Plus buying back soon to mature bonds by
> borrowing. So something could hit the fan at some point . . .
>
The big problem with paying down the government debt, even with grossly
inflated money, is that the government must spend less than it raises
in taxes.

I can't see that ever happening again.

--
Joe

On 16 Aug 2023 at 08:54:05 BST, Joe wrote:

> On Wed, 16 Aug 2023 04:43:13 -0000 (UTC)
> RJH <patchmoney@gmx.com> wrote:
>
>
>>
>> And AIUI the UK has a nasty habit of going interest only, and not
>> paying off the actual debt. Plus buying back soon to mature bonds by
>> borrowing. So something could hit the fan at some point . . .
>>
> The big problem with paying down the government debt, even with grossly
> inflated money, is that the government must spend less than it raises
> in taxes.
>
> I can't see that ever happening again.

Eh? Of course the government needs debt - for capital projects like hospitals,
roads, schools, er, HS2. So the repayments are bound to have an inpact on
revenue spending - in much the same way as a mortgage takes a chunk out of
income for private households. Private households on the whole manage. So
should governments.

Properly managed, it's not a problem.
--
Cheers, Rob, Sheffield UK

On 16/08/2023 08:54, Joe wrote:
> On Wed, 16 Aug 2023 04:43:13 -0000 (UTC)
> RJH <patchmoney@gmx.com> wrote:
>
>
>>
>> And AIUI the UK has a nasty habit of going interest only, and not
>> paying off the actual debt. Plus buying back soon to mature bonds by
>> borrowing. So something could hit the fan at some point . . .
>>
> The big problem with paying down the government debt, even with grossly
> inflated money, is that the government must spend less than it raises
> in taxes.
>
> I can't see that ever happening again.
>
The government everywhere raises taxes to pay employees to be arseholes
and vote for them. More taxes=more employees=more jobs=less wealth
productive work=falling standard of living.

I blame Ursula Upyourarsehole

--
WOKE is an acronym... Without Originality, Knowledge or Education.

On 16/08/2023 09:41, RJH wrote:
> Of course the government needs debt - for capital projects like hospitals,
> roads, schools, er, HS2.

Tony Blair didnt spend the money on ANY of that. He 'invested in people'
instead. In other words he borrowed the money and paid people to vote
for him.
So successful was this strategy that every since then has done the same
in a vain attempt to be the heir to Blair'

> So the repayments are bound to have an inpact on
> revenue spending - in much the same way as a mortgage takes a chunk out of
> income for private households. Private households on the whole manage. So
> should governments.
>
> Properly managed, it's not a problem.

But it isn't politically feasible to manage it properly.

--
WOKE is an acronym... Without Originality, Knowledge or Education.

On 16/08/2023 09:41, RJH wrote:
> On 16 Aug 2023 at 08:54:05 BST, Joe wrote:
>
>> On Wed, 16 Aug 2023 04:43:13 -0000 (UTC)
>> RJH <patchmoney@gmx.com> wrote:
>>
>>
>>>
>>> And AIUI the UK has a nasty habit of going interest only, and not
>>> paying off the actual debt. Plus buying back soon to mature bonds by
>>> borrowing. So something could hit the fan at some point . . .
>>>
>> The big problem with paying down the government debt, even with grossly
>> inflated money, is that the government must spend less than it raises
>> in taxes.
>>
>> I can't see that ever happening again.
>
> Eh? Of course the government needs debt - for capital projects like hospitals,
> roads, schools, er, HS2. So the repayments are bound to have an inpact on
> revenue spending - in much the same way as a mortgage takes a chunk out of
> income for private households. Private households on the whole manage. So
> should governments.
>
> Properly managed, it's not a problem.

The baby boomers have crashed the "I want my free NHS treatment"
party. Even before Covid our debt to gdp ration was projected
to reach 200% by 2035 as the BB's are into their 80's.

Forget tax cuts.

On 16/08/2023 09:41, RJH wrote:
> Eh? Of course the government needs debt - for capital projects like hospitals,
> roads, schools, er, HS2. So the repayments are bound to have an inpact on
> revenue spending - in much the same way as a mortgage takes a chunk out of
> income for private households. Private households on the whole manage. So
> should governments.
>
> Properly managed, it's not a problem.

When I was young I had a mortgage. I had to have one because I hadn't
had time to build up any capital. I don't have one now, and I pay for
things I want out of my income and saved capital.

The country isn't young. Our system has been around since Charles II
IIRC. By now it shouldn't need to borrow money, it should have saved
enough for its spending.

The real reason we have debt is because it allows the government of the
day to do things that may attract votes, and leave the next government
to pay for it.

Andy

Vir Campestris <vir.campestris@invalid.invalid> wrote:
> On 16/08/2023 09:41, RJH wrote:
> > Eh? Of course the government needs debt - for capital projects like hospitals,
> > roads, schools, er, HS2. So the repayments are bound to have an inpact on
> > revenue spending - in much the same way as a mortgage takes a chunk out of
> > income for private households. Private households on the whole manage. So
> > should governments.
> >
> > Properly managed, it's not a problem.
>
> When I was young I had a mortgage. I had to have one because I hadn't
> had time to build up any capital. I don't have one now, and I pay for
> things I want out of my income and saved capital.
>
> The country isn't young. Our system has been around since Charles II
> IIRC. By now it shouldn't need to borrow money, it should have saved
> enough for its spending.

That's not how countries work. Property is an asset that maintains value,
so you have something that both provides shelter and retains the money that
you put into it. Once you own a house, you don't need to pay for it again
(apart from maintenance). Even if the house falls down, you still own the
land.

Things countries spend money on mostly don't maintain value (wars,
education, healthcare, etc). You pay money for things, but those things
don't last (you educate people but they eventually die, even faster if a war
is involved). So you have to keep paying to do it all over again.

Infrastructure (canals, railways, roads, etc) sticks around for longer and
has a better financial return, but it still costs for upkeep.

Theo

On 21/08/2023 21:49, Theo wrote:
> Vir Campestris <vir.campestris@invalid.invalid> wrote:
>> On 16/08/2023 09:41, RJH wrote:
>>> Eh? Of course the government needs debt - for capital projects like hospitals,
>>> roads, schools, er, HS2. So the repayments are bound to have an inpact on
>>> revenue spending - in much the same way as a mortgage takes a chunk out of
>>> income for private households. Private households on the whole manage. So
>>> should governments.
>>>
>>> Properly managed, it's not a problem.
>>
>> When I was young I had a mortgage. I had to have one because I hadn't
>> had time to build up any capital. I don't have one now, and I pay for
>> things I want out of my income and saved capital.
>>
>> The country isn't young. Our system has been around since Charles II
>> IIRC. By now it shouldn't need to borrow money, it should have saved
>> enough for its spending.
>
> That's not how countries work. Property is an asset that maintains value,
> so you have something that both provides shelter and retains the money that
> you put into it. Once you own a house, you don't need to pay for it again
> (apart from maintenance). Even if the house falls down, you still own the
> land.
>
> Things countries spend money on mostly don't maintain value (wars,
> education, healthcare, etc). You pay money for things, but those things
> don't last (you educate people but they eventually die, even faster if a war
> is involved). So you have to keep paying to do it all over again.
>
> Infrastructure (canals, railways, roads, etc) sticks around for longer and
> has a better financial return, but it still costs for upkeep.
>
> Theo

Property is the only thing I've spent money on that retains its value.

I spend money on education, healthcare and transport. Just as with a
government those are continuous expenditures. (I hope not to spend any
on war).

I'm afraid I have no real faith in any government of any party or any
country. If you know of a good one please let me know.

Andy