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de-link individual benefits from inflation; you get the going rate but you lose more buying power the longer it goes on.
"Some years ago a small rural town in Spain twinned with a similar town in Greece.
The Mayor of the Greek town visited the Spanish town. When he saw the palatial mansion belonging to the Spanish mayor he wondered how he could afford such a house. The Spaniard said; "You see that bridge over there? The EU gave us a grant to build a four-lane bridge; but by building a single lane bridge with traffic lights at either end this
house could be built".
The following year the Spaniard visited the Greek town. He was simply amazed at the Greek Mayor's house, gold taps, marble floors - it was marvellous, beyond imagination. When he asked how this could be afforded the Greek said; "You see that bridge over there?"
The Spaniard replied, "No."
The Mayor of the Greek town visited the Spanish town. When he saw the palatial mansion belonging to the Spanish mayor he wondered how he could afford such a house. The Spaniard said; "You see that bridge over there? The EU gave us a grant to build a four-lane bridge; but by building a single lane bridge with traffic lights at either end this
house could be built".
The following year the Spaniard visited the Greek town. He was simply amazed at the Greek Mayor's house, gold taps, marble floors - it was marvellous, beyond imagination. When he asked how this could be afforded the Greek said; "You see that bridge over there?"
The Spaniard replied, "No."
lol IA, good joke.
in other news, Clegg converts to the dark side of the force............ publicly:
http://www.telegraph.co.uk/news/8890...auvinists.html
Mr Clegg said there was a middle ground between greater integration, favoured by France and Germany, and total withdrawal from Europe, favoured by dozens of backbench Conservative MPs:
“What we want is a European Union which is exclusively oriented towards growth prosperity and jobs,”
in other news, Clegg converts to the dark side of the force............ publicly:
http://www.telegraph.co.uk/news/8890...auvinists.html
Mr Clegg said there was a middle ground between greater integration, favoured by France and Germany, and total withdrawal from Europe, favoured by dozens of backbench Conservative MPs:
“What we want is a European Union which is exclusively oriented towards growth prosperity and jobs,”
Originally Posted by Furunculus:
“What we want is a European Union which is exclusively oriented towards growth prosperity and jobs,”
That comment is fir for the Miss World contest - utterly vacuous.“What we want is a European Union which is exclusively oriented towards growth prosperity and jobs,”
What I find amazing is the silence from Our Masters in Westminster about the suspension of democracy in two EU countries.
They better come up with that mechanism for countries to leave the Euro fairly quick cos if they want treaty change, there plan is toast.
There is not a hope in hell that it could pass not after they effectively removed two democratic leaders and replaced them with drones.
The thing I have to laugh at is the idea mr Papademos is the man to fix things in Greece surely he was the problem he must have know Greece lied for the Euro at the time.
There is not a hope in hell that it could pass not after they effectively removed two democratic leaders and replaced them with drones.
The thing I have to laugh at is the idea mr Papademos is the man to fix things in Greece surely he was the problem he must have know Greece lied for the Euro at the time.
Originally Posted by InsaneApache:
What I find amazing is the silence from Our Masters in Westminster about the suspension of democracy in two EU countries.
Thankfully it's impossible to do what they did in Greece/Italy in both Ireland or UK both the PM's must be picked from elected members.What I find amazing is the silence from Our Masters in Westminster about the suspension of democracy in two EU countries.
No sticking in life senators here
Originally Posted by rory_20_uk:
That comment is fir for the Miss World contest - utterly vacuous.
from a tory it would be, but for a leader of the lib-dem's to utter those words will be considered heresy by his party.That comment is fir for the Miss World contest - utterly vacuous.
Originally Posted by InsaneApache:
What I find amazing is the silence from Our Masters in Westminster about the suspension of democracy in two EU countries.
About Greece: Papandreou surprised everybody by announcing a referendum after he had agreed with the other European leaders that he'd implement reforms. Said European leaders put pressure on him, to make sure he kept his end of the bargain that (I can't stress this enough) he, as prime minister of Greece, had agreed to. Greece could still have decided to go on with the referendum, or to hold elections about it. The prospect of not getting financial aid from the rest of Europe made them decide otherwise. Granted, it's not a shining example of democracy in action, but if the hands of the Greek politicians are tied, it's because of the fiscal reality of their country, not by the leaders of other countries.What I find amazing is the silence from Our Masters in Westminster about the suspension of democracy in two EU countries.
Italy? There's nothing unconstitutional about the way Monti has gotten into power (to my knowledge, anyway), and his government will be subject to the same parliamentary scrutiny as any other Italian government. Where's this supposed "suspension of democracy"? And, again, it's fiscal reality* which dictates that Italy should reform its economy. The Italians probably won't like it, but then again, Italian voters can't vote their national debt away in a national election or democraticly decide that Italy will only need to pay <5% interest on loans that Italy accepts from other parties.
The only way you could describe what's happened as "undemocratic" is if you consider representative democracy as such undemocratic. I've always been of the belief that elected governments should govern according to what they think is the right course of action, and not according to opinion polls. The only thing disaffected Italians and Greeks can do about it, short of revolution, is punishing this course of action at the next election. Which is how representative democracies have worked for centuries.
*or speculative attacks against Italy's finances, if you're inclined to believe that. Even then, the fact of the matter is that those investors can do with their money what they want, and if Italy wants to borrow money from them, it will have to do so on the lenders' conditions. Not that I necessarily agree with everything that happens in or around the financial market. I'm just arguing against the idea that the EU is somehow destroying democracies.
Originally Posted by :
Where's this supposed "suspension of democracy"?
Oh I dunno. Replacing two elected heads of state with EU apparatchiks sounds awfully like a coup d'etat. Or maybe it's just me. Whether you agree with the Greeks or the Italians is beside the point. It's up to the voters to boot out miscreant politicians. Not the EUSSR.Where's this supposed "suspension of democracy"?
Having only a superficial knowledge of the Greek situation it seems like Papandreou sought referendum not in the interest of democracy but for personal gain. An opinion was that he wanted to use it as a negotiating tool to further reduce Greece's liabilities.
I'm far too skeptical of politicians, especially lately, Greek politicians, to believe that democracy was served here.
I'm far too skeptical of politicians, especially lately, Greek politicians, to believe that democracy was served here.
Without wanting to be pedantic, a prime minister isn't a head of state. Napolitino or Papoulias, the presidents of Italy and Greece, are heads of state. And the term "coup d'etat" is usually understood to mean seizing power by illegal means.
Prime ministers resign between elections for all sorts of reasons. Both Berlusconi's and Papandreaou's position in their respective parliaments were pretty shaky anyway, and the fact that foreign pressure played a part does not make it undemocratic, let alone a coup d'etat. In both cases, the former opposition (i.e elected members of parliament) has agreed to support a technocratic cabinet because neither country can afford to delay the decision making caused by an interim election. Unusual? Certainly. Undemocratic or unconstitutional? No.
I already said that it's not a shining example of democracy in action, but neither is it the end of democracy.
Prime ministers resign between elections for all sorts of reasons. Both Berlusconi's and Papandreaou's position in their respective parliaments were pretty shaky anyway, and the fact that foreign pressure played a part does not make it undemocratic, let alone a coup d'etat. In both cases, the former opposition (i.e elected members of parliament) has agreed to support a technocratic cabinet because neither country can afford to delay the decision making caused by an interim election. Unusual? Certainly. Undemocratic or unconstitutional? No.
Originally Posted by Vladimir:
Having only a superficial knowledge of the Greek situation it seems like Papandreou sought referendum not in the interest of democracy but for personal gain. An opinion was that he wanted to use it as a negotiating tool to further reduce Greece's liabilities.
I'm far too skeptical of politicians, especially lately, Greek politicians, to believe that democracy was served here.
He more or less said that the referendum was supposed to call bluff on the opposition. The opposition knew well enough that accepting the bailout and the conditions that came with it was the only viable choice, but opposed it publicly to garner support from the voters. If he really intended to use a "no" in the referendum to bargain a new deal, he would have gone through with it, unless he came to the conclusion that it was a bad idea afterall.Having only a superficial knowledge of the Greek situation it seems like Papandreou sought referendum not in the interest of democracy but for personal gain. An opinion was that he wanted to use it as a negotiating tool to further reduce Greece's liabilities.
I'm far too skeptical of politicians, especially lately, Greek politicians, to believe that democracy was served here.
I already said that it's not a shining example of democracy in action, but neither is it the end of democracy.
Oh as I've shown, I loath politicians, I maintain that they are the problem not the solution. However it must be up to the demos to decide who wields the kratos. Not foreign powers. If they try that on the Irish for example, I can foresee lots of semtex being dug up. It sets a dangerous precedent that we ignore at our peril.
It has been pointed out that had the *bailout* been subjected to referendums in the countries footing the bill for Greek creative finance management, the place would've been left to burn long ago. (Since this would be economically insane, and the "great unwashed" tends not grasp that any better than the Greeks rioting against the austerity measures, nobody has. Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.)
Papandreou was pretty much engaging in sheer political brinksmanship with an awful lot of other peoples' money (and, in a sense, the immediate future of the whole continent's economies) at stake; confusing that with some kind of genuine "democracy in action" is plain silly. That veins started popping in Paris and Berlin was hardly unreasonable.
Papandreou was pretty much engaging in sheer political brinksmanship with an awful lot of other peoples' money (and, in a sense, the immediate future of the whole continent's economies) at stake; confusing that with some kind of genuine "democracy in action" is plain silly. That veins started popping in Paris and Berlin was hardly unreasonable.
Originally Posted by Watchman:
It has been pointed out that had the *bailout* been subjected to referendums in the countries footing the bill for Greek creative finance management, the place would've been left to burn long ago. (Since this would be economically insane, and the "great unwashed" tends not grasp that any better than the Greeks rioting against the austerity measures, nobody has. Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.)
Papandreou was pretty much engaging in sheer political brinksmanship with an awful lot of other peoples' money (and, in a sense, the immediate future of the whole continent's economies) at stake; confusing that with some kind of genuine "democracy in action" is plain silly. That veins started popping in Paris and Berlin was hardly unreasonable.
Bingo. It is hardly the EU imposing some sort of apparatchik, it is Papandreou & Berlusconi losing their respective games. Berlusconi's wanted to protect himself from persecution because of his own murky past, but he also needed to push through fiscal reform in Italy. That meant, he wanted to have his cake and eat it, too. It has been pointed out that had the *bailout* been subjected to referendums in the countries footing the bill for Greek creative finance management, the place would've been left to burn long ago. (Since this would be economically insane, and the "great unwashed" tends not grasp that any better than the Greeks rioting against the austerity measures, nobody has. Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.)
Papandreou was pretty much engaging in sheer political brinksmanship with an awful lot of other peoples' money (and, in a sense, the immediate future of the whole continent's economies) at stake; confusing that with some kind of genuine "democracy in action" is plain silly. That veins started popping in Paris and Berlin was hardly unreasonable.
Originally Posted by :
Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.
LOLSeriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.
Originally Posted by Watchman:
Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.
Apparently the top boys in finance and economics dont have a clue either.Seriously, you don't want "the people" to decide macroeconomics for the rather sound reason they really don't understand **** about the topic.
Entirely possible, but I'd still rather trust them with it than the monkeys who can't even grasp that the fallout WILL, in fact, affect them too, even if their governement didn't lift a finger to try and control the damage.
Because seriously, watching the ball-punchingly stupid and terminally myopic public discourse on the topic here long since stripped away whatever little confidence in the judgement of the "common man" I may have had left. It may also have killed a part of my soul and made baby Jesus cry, but I'm too numb to tell for certain.
Because seriously, watching the ball-punchingly stupid and terminally myopic public discourse on the topic here long since stripped away whatever little confidence in the judgement of the "common man" I may have had left. It may also have killed a part of my soul and made baby Jesus cry, but I'm too numb to tell for certain.
old phrase about paying people peanuts and getting monkeys, pretty sure their is a valid parallel to be drawn with representative democracy.
[edited for clarity]
[edited for clarity]
Originally Posted by gaelic cowboy:
Apparently the top boys in finance and economics dont have a clue either.
In finance it does not matter the long term prospects of a company, it matters what is going to happen in the next few days to months. In the dot-com bubble, one analyst showed that for one company to justify its share price its capitalisation in 5 years would have to equal the world's economy. He was of course let go.Apparently the top boys in finance and economics dont have a clue either.
As long as there is someone to sell things to, that's all that matters.
Hello all! I would like some advise from the more economically minded ones of you amongst us.
I was reading this article by the BBC which provides a very interesting picture of who owes what to who:
http://www.bbc.co.uk/news/business-15748696
If you click on the various countries, you can see who owes what to what.
One very interesting tibbit I noticed was this - countries owe money between themselves and their counterpart
So what I propose is this - Debt Cancellation
Let's take the United Kingdom for example. America owes us more money than we owe them. However, under what I propose is that we basically do this sum:
USA debt - UK debt = NewUSA Debt, Ukdebtless
So using United Kingdom again, we sort of get a picture like this.
United Kingdom
Debts - Germany, Spain, Ireland
Owed - America, Italy, Portugal
Cancelled - Japan, France
So now, the United Kingdom only owes debt to Spain, Germany and Ireland, whilst only America, Italy and Portugal owes to United Kingdom.
Effectively, we start pulling all these strings away reducing it all to simply numbers.
If politicians want to take that extra-step. They could attempt to use the Central European Bank as the debt-nexus. By doing this for example, lets say Germany owes America money (whilst UK owes Germany and America owes UK), they can eliminate the debt America owes UK in return to the debt the UK owes Germany.
Edit: Double checking it, it seems America owes more money to everyone in Europe than the otherway around..
Since all this debt gets eliminated, it means there is far less money being lost on "interest", which means all the economies can improve at home.
I was reading this article by the BBC which provides a very interesting picture of who owes what to who:
http://www.bbc.co.uk/news/business-15748696
If you click on the various countries, you can see who owes what to what.
One very interesting tibbit I noticed was this - countries owe money between themselves and their counterpart
So what I propose is this - Debt Cancellation
Let's take the United Kingdom for example. America owes us more money than we owe them. However, under what I propose is that we basically do this sum:
USA debt - UK debt = NewUSA Debt, Ukdebtless
So using United Kingdom again, we sort of get a picture like this.
United Kingdom
Debts - Germany, Spain, Ireland
Owed - America, Italy, Portugal
Cancelled - Japan, France
So now, the United Kingdom only owes debt to Spain, Germany and Ireland, whilst only America, Italy and Portugal owes to United Kingdom.
Effectively, we start pulling all these strings away reducing it all to simply numbers.
If politicians want to take that extra-step. They could attempt to use the Central European Bank as the debt-nexus. By doing this for example, lets say Germany owes America money (whilst UK owes Germany and America owes UK), they can eliminate the debt America owes UK in return to the debt the UK owes Germany.
Edit: Double checking it, it seems America owes more money to everyone in Europe than the otherway around..
Since all this debt gets eliminated, it means there is far less money being lost on "interest", which means all the economies can improve at home.
It’s not impossible, but it would be painful to my knowledge. Could be wrong of course.
I am not able to give a lot of details off the top of my head, yet every loan has different payment timelines, is negotiated under different risk conditions, at different interest rates, between different departments which depend on different budgets with different scheduled cash flow intakes in different currencies with different, fluctuating exchange rates. Mutual debt cancellation would always incur significantly increased costs for one party on a case by case basis.
It would probably be a nightmare to sort it out equitably and it would not translate into significant benefits; the goal is to lower your debt while continuing to invest your money for maximum return, not decrease both.
I am not able to give a lot of details off the top of my head, yet every loan has different payment timelines, is negotiated under different risk conditions, at different interest rates, between different departments which depend on different budgets with different scheduled cash flow intakes in different currencies with different, fluctuating exchange rates. Mutual debt cancellation would always incur significantly increased costs for one party on a case by case basis.
It would probably be a nightmare to sort it out equitably and it would not translate into significant benefits; the goal is to lower your debt while continuing to invest your money for maximum return, not decrease both.
Originally Posted by Tiaexz:
Since all this debt gets eliminated, it means there is far less money being lost on "interest", which means all the economies can improve at home.
This is the problem - no-one lends money except to earn interest and no lender is willing to cancel a loan early and forsake the interest which would come later and the potential profit which is to be made in the future if the rate at which you are lending is higher than the rate at which you borrow. There is an actual loss and an opportunity cost in a loan being repayed early. Where bonds are issued with such an option embedded in the structure (ie. when the lender can repay early) they are typically more expensive for the borrower to compensate the lender for the risk that they will receive the principal back early. It's called 'repayment risk'. Since all this debt gets eliminated, it means there is far less money being lost on "interest", which means all the economies can improve at home.
Also, it is not as neat as simply saying "Europe is owed money by America" because it is privately owned institutions like banks, funds management and insurance companies which are the actual lenders. The American government has not borrowed directly from European governments or vice versa.
Didn't debt cancellation as a policy occur at some point before or after one of the world wars? I think I remember reading some sort of debt scheme they came up regarding how to get the losers to pay up after their country had been destroyed.
I think that ultimately, if the four debt horsemen of the apocalypse comes around and starts having all hell break loose, countries may just decide to start forgiving debt as a last ditch measure to prevent the new Great Depression. When the world economy is at stake, I feel like everything is up for grabs.
I think that ultimately, if the four debt horsemen of the apocalypse comes around and starts having all hell break loose, countries may just decide to start forgiving debt as a last ditch measure to prevent the new Great Depression. When the world economy is at stake, I feel like everything is up for grabs.
Originally Posted by phonicsmonkey:
This is the problem - no-one lends money except to earn interest and no lender is willing to cancel a loan early and forsake the interest which would come later and the potential profit which is to be made in the future if the rate at which you are lending is higher than the rate at which you borrow. There is an actual loss and an opportunity cost in a loan being repayed early. Where bonds are issued with such an option embedded in the structure (ie. when the lender can repay early) they are typically more expensive for the borrower to compensate the lender for the risk that they will receive the principal back early. It's called 'repayment risk'.
Also, it is not as neat as simply saying "Europe is owed money by America" because it is privately owned institutions like banks, funds management and insurance companies which are the actual lenders. The American government has not borrowed directly from European governments or vice versa.
I am of the economical mind that you should pretty much never borrow money (other than longterm investment with easy repayment well within your budget), and only lend money if you can afford to lose it. Whilst I do have my fabulous student loan, I have absolutely no credit card bills or any other loans or negative amounts of money and I only buy what I can afford.This is the problem - no-one lends money except to earn interest and no lender is willing to cancel a loan early and forsake the interest which would come later and the potential profit which is to be made in the future if the rate at which you are lending is higher than the rate at which you borrow. There is an actual loss and an opportunity cost in a loan being repayed early. Where bonds are issued with such an option embedded in the structure (ie. when the lender can repay early) they are typically more expensive for the borrower to compensate the lender for the risk that they will receive the principal back early. It's called 'repayment risk'.
Also, it is not as neat as simply saying "Europe is owed money by America" because it is privately owned institutions like banks, funds management and insurance companies which are the actual lenders. The American government has not borrowed directly from European governments or vice versa.
As such Government should be running a surplus of money from taxes and what not, which it can then use to provide loans for investment into the nation or even lend to another nation if needed, or simply for "rainy day" emergencies.
Originally Posted by :
As such Government should be running a surplus of money from taxes and what not, which it can then use to provide loans for investment into the nation or even lend to another nation if needed, or simply for "rainy day" emergencies.
A budget surplus doesn’t entail an absence of debt though. Under Clinton, you chaps had one. That is, if you kept on that course, you would’ve eventually paid your whole debt. Yet the then surplus was caused by Clinton’s further deregulation of the financial industry in ’94.As such Government should be running a surplus of money from taxes and what not, which it can then use to provide loans for investment into the nation or even lend to another nation if needed, or simply for "rainy day" emergencies.
Now, the budget deficit is used as a tool of demand management; most economists would support the use of changing the level of borrowing as a way of fine-tuning or managing the level of aggregate demand. An increase in borrowing can be a stimulus to demand when other sectors of the economy are suffering from weak spending. A fiscal stimulus given is important in stabilizing demand and output at a time of global uncertainty. The argument is that the government can and should use fiscal policy to keep real national output closer to potential GDP so that a large negative output gap is avoided. Maintaining a high level of demand helps to sustain growth and keep unemployment low.
Plus, a government debt can lead to economic growth: a budget deficit can have positive macroeconomic effects in the long run if it is used to finance extra capital spending that leads to an increase in the stock of national assets. For example, higher spending on the transport infrastructure improves the supply-side capacity of the economy promoting long-run growth. And increased public-sector investment in health and education can bring positive effects on labour productivity and employment. The social benefits of increased capital spending can be estimated through use of cost-benefit analysis.
Overall, your overall GDP, in every situation, has more to gain from efficient debt management than from an aggressive approach to acquit it. I know where you’re coming from though and why it seems a lot safer, ideally, we’re all fiscally conservative and the current system has not been proved sustainable ad infinitum; it has not been disproved either yet thank F.
Originally Posted by Nowake:
A budget surplus doesn’t entail an absence of debt though. Under Clinton, you chaps had one. That is, if you kept on that course, you would’ve eventually paid your whole debt. Yet the then surplus was caused by Clinton’s further deregulation of the financial industry in ’94.
I am not American, but during a "Boom" period, the government should attempt to erase its debts and work up its surplus so lets say the Global Meltdown happened, the government has the resources for its "bail outs" and for heavy investment to keep the employment down, creating jobs and opportunities for businesses to continue under these conditions.A budget surplus doesn’t entail an absence of debt though. Under Clinton, you chaps had one. That is, if you kept on that course, you would’ve eventually paid your whole debt. Yet the then surplus was caused by Clinton’s further deregulation of the financial industry in ’94.
(There should be budget set aside for investment anyway, regardless of where about it is in the boom-bust cycle. This is for extra-intensive investment during the hardtimes)
However, if it is a situation where the debts are cleared and you got surplus money, you either use it for investment (if required for any major projects or serious work) or lower taxes.
Originally Posted by a completely inoffensive name:
When the world economy is at stake, I feel like everything is up for grabs.
I think this is a reasonable view. It's not beyond the realms of possibility that debt could be forgiven but it would effectively involve nationalising privately owned banks and other institutions.When the world economy is at stake, I feel like everything is up for grabs.
I think a more likely move is that the credit default swap contracts outstanding on sovereign debt (Italy's mainly) will be declared null and void as they present a systemic risk to the financial system.
Originally Posted by Tiaexz:
I am of the economical mind that you should pretty much never borrow money (other than longterm investment with easy repayment well within your budget), and only lend money if you can afford to lose it. Whilst I do have my fabulous student loan, I have absolutely no credit card bills or any other loans or negative amounts of money and I only buy what I can afford.
This is very sensible and it's quite possible to live this way until you want to buy a house. Then you realise that in order to get hold of that kind of asset you either have to borrow or spend many many years saving up while prices rise and push it further out of reach.I am of the economical mind that you should pretty much never borrow money (other than longterm investment with easy repayment well within your budget), and only lend money if you can afford to lose it. Whilst I do have my fabulous student loan, I have absolutely no credit card bills or any other loans or negative amounts of money and I only buy what I can afford.
Originally Posted by phonicsmonkey:
This is very sensible and it's quite possible to live this way until you want to buy a house. Then you realise that in order to get hold of that kind of asset you either have to borrow or spend many many years saving up while prices rise and push it further out of reach.
As I stated:This is very sensible and it's quite possible to live this way until you want to buy a house. Then you realise that in order to get hold of that kind of asset you either have to borrow or spend many many years saving up while prices rise and push it further out of reach.
Originally Posted by :
other than longterm investment with easy repayment well within your budget
IE: Mortgage other than longterm investment with easy repayment well within your budget
Originally Posted by Tiaexz:
I am of the economical mind that you should pretty much never borrow money (other than longterm investment with easy repayment well within your budget), and only lend money if you can afford to lose it. Whilst I do have my fabulous student loan, I have absolutely no credit card bills or any other loans or negative amounts of money and I only buy what I can afford.
As such Government should be running a surplus of money from taxes and what not, which it can then use to provide loans for investment into the nation or even lend to another nation if needed, or simply for "rainy day" emergencies.
I agree, but it's worth noting that most religions consider Usury (lending money at interest) a mortal sin, it's never outright stopped anyone but it did appear to curtail the practice somewhat.I am of the economical mind that you should pretty much never borrow money (other than longterm investment with easy repayment well within your budget), and only lend money if you can afford to lose it. Whilst I do have my fabulous student loan, I have absolutely no credit card bills or any other loans or negative amounts of money and I only buy what I can afford.
As such Government should be running a surplus of money from taxes and what not, which it can then use to provide loans for investment into the nation or even lend to another nation if needed, or simply for "rainy day" emergencies.
They were obviously on to something.
As to your debt cancelation plan, I don't think we're quite there yet, but it's worth noting that many countries (including Italy) have a primary surplus, but currently need to borrow to pay off their debts.
So we may get there.
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