Labour pays homage to Iron Lady

[Beskar]

As has already been pointed out your system will return the world to a place where only the toffs get credit and the rest of us are locked out of a system where we couldnt even borrow to fix the roof on our houses.

???

You can't just invent things. There are things such as "insurance" you know, there is saving money opposed to mass spending like we did. There is still normal people taking out small loans which they can repay.

Also, why would a toff need to take a loan? They got the money already.

[Beskar]

This kind of thinking is why I disagree so strongly with economic leftists. They think the world operates on a tangible basis (forget what it's called. speices economy or something?). Thus, there's a limited amount of wealth and therefore the more someone has, the less someone else has.

There is a total of 8 apples. I have 5 apples, you have 3. Are you saying you can magically pull apples out of thin air? I think that is called Money Laundering.

Dark Age thinking. It's like they want the Church to ban interest on loans again.

This was never mentioned?

Money, even gold, isn't worth much. It is the perception of its worth that is important. What's the difference between a $1 bill and a $5 bill: The ink pattern. The differing in perception of value is largely what causes market swings.

???

I wished I lived in this fantasy land where the only difference is the ink pattern. I mean, there would be no world hunger, no suffering, everyone is happy with wealth to fill long fulling lives without work, afterall, the only difference in money is the ink pattern!

and I thought I was meant to be the crazy loony one.

[seireikhaan]

You could use a voucher economy. But now that would be really showing my red stripes.

Well, there's really not much I can tell you at this point if you think voucher economies thrive.

I was using surplus in the context of money extra than deposits. A business in debt is a bad business model. Any debt should be temporarily in times of an emergency or as a repayable investment. If the actual instituitions don't even have the money themselves to cover the debts, you have the credit crunch and the great collapse we just had as the bank gave out money it didn't even have. It is a very flawed system, and yes, banks can actually work without going into such dangerous waters.

No. Again, you demonstrate a misunderstanding of how business works. DEBT is not a "bad" business model. Debt is not some all consuming monster, its not the boogyman. Debt is potentially harmful, as well as potentially beneficial. It depends entirely on what the money that is borrowed is used for. Was it bad for the United States to go into debt to help fix Europe after WWII? Of course not.

Most businesses start their youths in quite a bit of debt, and many find ways of doing pretty well. The guy I worked for over summer had a 10 employee company, and he got loans from a big bank so he could get the business going. Debt is THE business model, debt is how anything gets done. Very few people have the necessary capital to start a business, or buy the house they want, just with what they have in savings or checking. You say that debt should only be used as "emergency" or "a repayable investment". What on earth do you think 99% of of debt is? Do you think businesses get debt for the sheer fun of it? They do it because they think the money they're getting will make them more profitable! That's the whole point of business, to make more money.

The banks are there so we can go into debt. We aren't there for the banks to go into debt and bail them out.

And yet, when banks allow us to go into debt, they deplete the very surplus you demand they have. Ifso facto, there's a lot less credit and opportunity for everyone. Which, as I stated earlier and you refuse to acknowledge or contest, hurts society as a whole by leaving those in power now with the leverage to maintain their financial autonomy at the sufferance of everyone else.

Yet there are many people who are driven, ethical and unselfish, how did they become like that? It is their upbringing and environmental factors. It will take generations for it to truely work, nothing can be done overnight, that is your fallacious assumption.

Hardly. I look at history, and history tells me that nearly every generation has the same concerns. Socrates was accused of "corrupting the youth", as is rap music today. People worry whether the newer generation will be as hard working as the last. People worry whether their futures are secure. The history of Psychology is a giant record that's skipping on the same beat.

[seireikhaan]

To illustrate a point:

Beskar, how much are you willing to pay for an apple?

[gaelic cowboy]

???

You can't just invent things. There are things such as "insurance" you know, there is saving money opposed to mass spending like we did. There is still normal people taking out small loans which they can repay.

Also, why would a toff need to take a loan? They got the money already.

Ah but you would not allow this to happen because often insurance companies take on risk which you are adverse to so eventually even I would not be insured for my house.

Toffs have always borrowed money at very nice interest rates thats why when my dad borrowed years ago he practically needed a letter from the bishop as to his character for the bank manager and it was at a cruel interest rate which took years to pay off.

So you see no small person will get past the door and will generally be barred from taking that small loan you talk off

[Beskar]

Well, there's really not much I can tell you at this point if you think voucher economies thrive.

In an economic downturn, on a local scale such as that used by the ROC (which lead to a 1% increase in GDP this year) and things like the "Brixton Pound" actually does.

However, the goal of life isn't to make as much money as possible, unless you are a capitalist. Standard of living, welfare of the poorest of society are far more important. Also, a Voucher system based on Labour.

Beskar, how much are you willing to pay for an apple?

Too many factors. From the taste of the apple, to the situation, the relative value to other products. If Melon is cheaper than Apple, and I like Melon more, I would obviously buy Melon. The value and price is depicted by the supply and demand, even in socialist economies this is the case.

So the answer to your question is simply this "I am willing to pay whatever I feel like paying in what circumstance and situation". Your question is akin to "How much wood can a wood chuck, chuck, if a wood chuck could chuck wood?", it is too non-specific.

[Beskar]

Ah but you would not allow this to happen because often insurance companies take on risk which you are adverse to so eventually even I would not be insured for my house.

Toffs have always borrowed money at very nice interest rates thats why when my dad borrowed years ago he practically needed a letter from the bishop as to his character for the bank manager and it was at a cruel interest rate which took years to pay off.

So you see no small person will get past the door and will generally be barred from taking that small loan you talk off

Not really, insurance works on the statistical chance of you not claiming for anything, thus receiving money for nothing. It depends on situation and people are willing to pay.

Also, not they wouldn't unless they have a poor credit rating or simply have no chance or repaying it back. It is a case-by-case basis, and since we are talking about something different, you cannot use the current system to say the flaws, as it is a different situation. It would be like talking about the flaws of a car in a sandpit, opposed to a car on the road.

[seireikhaan]

In an economic downturn, on a local scale such as that used by the ROC (which lead to a 1% increase in GDP this year) and things like the "Brixton Pound" actually does find.

However, the goal of life isn't to make as much money as possible, unless you are a capitalist. Standard of living, welfare of the poorest of society are far more important. Also, a Voucher system based on Labour.

And this is what I don't get. You claim to want to improve the lives of everyone, and yet you would deliberately sabotage the only way for the poorest to improve their lives. A poor person has no capital from which to buy a house, or car, or start a business. If you bar banks from dipping into debt, they will NEVER get a house, or car. Large businesses can and do leverage banks by giving them favorable terms. Its a bit of a problem now, with a tight credit market. You want to make it air-tight. When a person has a loan to pay, no matter what for, they are given an incentive, nay, an obligation, to pay it. That will improve their lives.

If the poor have no option for credit, there is no "light at the end of the tunnel". There is no better apartment, or house, or car. At best, they will struggle and languish for years upon years on lesser standards of living than otherwise. At worst, they give up and become dependent on gov't handouts.

[Beskar]

And this is what I don't get. You claim to want to improve the lives of everyone, and yet you would deliberately sabotage the only way for the poorest to improve their lives. A poor person has no capital from which to buy a house, or car, or start a business. If you bar banks from dipping into debt, they will NEVER get a house, or car. Large businesses can and do leverage banks by giving them favorable terms. Its a bit of a problem now, with a tight credit market. You want to make it air-tight. When a person has a loan to pay, no matter what for, they are given an incentive, nay, an obligation, to pay it. That will improve their lives.

If the poor have no option for credit, there is no "light at the end of the tunnel". There is no better apartment, or house, or car. At best, they will struggle and languish for years upon years on lesser standards of living than otherwise. At worst, they give up and become dependent on gov't handouts.

Few fundamental errors, you are assuming debt is the only way through those situations when it isn't.

Starting new business? Investment, either by yourself from working, or by other companies or enterprises. Even then, you can still have a bank loan if you can afford to repay it.

House - Mortgage, I see no problems there, unless you are in a situation where house prices are too expensive, so it is simply something you do without, there are other options such as renting. In Europe, majority of houses and apartments are rented, NOT bought. It is only common in the USA and the United Kingdom to generally have bought accommodation. You are inserting cultural bias.

Car - There is always public transport, a car is not the end of the world. You simply pay for a car if you need to. Again, if you save money, you can easily pay for a car, unless you are going for something completely out of your price range.

Again, House and Car ownership is not the end of the world, there is still other forms of transport and other forms of shelter.

Again, what happened to these people having jobs?

Also, welfare can be implemented in a number of ways. However, since we are not actually talking about that as that is a different situation, I won't comment further.

. DEBT is not a "bad" business model.

Constantly Running into Debt and staying in Debt is a very bad model. Yes, Debt can be really good in temporarily situations, or for doing a money and finical investment into something. Since we are talking about a current situation where there is constant debt, thus making everything go bankrupt, I think the evil's of abusing the debt function is pretty well obvious. Debt is temporary thing, not a life-style, if you make it a life-style, it is just a path to your own destruction.

I never go into debt and when I do, I pay it off as soon as possible, I actually know how to handle my money. I have food on the table, shelter, even afford luxuries. Guess what? I basically never even been in debt. Guess what? I have working class parents thus no money from them. My money is my own and I am living on my own in my own place.

[seireikhaan]

Few fundamental errors, you are assuming debt is the only way through those situations when it isn't.

Starting new business? Investment, either by yourself from working, or by other companies or enterprises. Even then, you can still have a bank loan if you can afford to repay it.

I repeat, will you ever actually counter my argument? How many times must I repeat myself? Big corporations can and DO leverage banks into giving them loans before all others, by taking out more money than other people could conceive of. When you take away the bank's ability to go into debt, their surplus is easily eaten through by corporate giants, and little is left for everyone else.

House - Mortgage, I see no problems there, unless you are in a situation where house prices are too expensive, so it is simply something you do without, there are other options such as renting. In Europe, majority of houses and apartments are rented, NOT bought. It is only common in the USA and the United Kingdom to generally have bought accommodation. You are inserting cultural bias.

Again, you're not accounting for the point that big corporations can and do get loans before all others, because they can borrow so much more.

And renting is indeed an option, but it should not be the only option.

Again, House and Car ownership is not the end of the world, there is still other forms of transport and other forms of shelter.

Again, previous point. I might be biased on the car thing, but in the US, its pretty rough trying to rely on public transport. Of course, Europe is much better at this sort of thing.

Again, what happened to these people having jobs?

Never said they wouldn't. However, without credit, again, because banks won't have any left to give since they can't go into debt, it will take much longer. Additionally, without the obligation to pay, the importance of the job is not the same as if they have very few financial obligations.

Also, welfare can be implemented in a number of ways. However, since we are not actually talking about that as that is a different situation, I won't comment further.

Same.

Constantly Running into Debt and staying in Debt is a very bad model. Yes, Debt can be really good in temporarily situations, or for doing a money and finical investment into something. Since we are talking about a current situation where there is constant debt, thus making everything go bankrupt, I think the evil's of abusing the debt function is pretty well obvious. Debt is temporary thing, not a life-style, if you make it a life-style, it is just a path to your own destruction.

Again, you are being out of touch with how business works. And no, we're really not talking about "just now". If you want to ban debt for banks, that impacts the future as well. The current situation does demand limitations on how far banks should be allowed to go into debt. But again, you must remember that banks don't operate on the same business model as most businesses. When they have lots of money(ie deposits), they lose money. When they have debt(ie- loans), they increase their revenue, assuming its paid back. That is why banks have so much "debt", they aren't meant to have a huge amount of cash on hand. Because of the prior assumption, there should be limits on just how far they go into debt, but barring them from debt causes havoc with the entire model and will likely run a large number of banks out of business entirely, with those surviving being crippled both in their ability to finance average folks and aspiring entrepreneurs, and their own fiscal ability to expand business and pay their employees a good wage.

[Beskar]

Again, you are being out of touch with how business works. And no, we're really not talking about "just now". If you want to ban debt for banks, that impacts the future as well. The current situation does demand limitations on how far banks should be allowed to go into debt. But again, you must remember that banks don't operate on the same business model as most businesses. When they have lots of money(ie deposits), they lose money. When they have debt(ie- loans), they increase their revenue, assuming its paid back. That is why banks have so much "debt", they aren't meant to have a huge amount of cash on hand. Because of the prior assumption, there should be limits on just how far they go into debt, but barring them from debt causes havoc with the entire model and will likely run a large number of banks out of business entirely, with those surviving being crippled both in their ability to finance average folks and aspiring entrepreneurs, and their own fiscal ability to expand business and pay their employees a good wage.

I will accept this argument I am slightly out of touch, because I have to say, how do banks lose money when they have lots of money?

Obviously, working on interest of the deposit and the interest of the repayment would correct the balance out? Also, I was meaning surplus money as being its own money, not actually deposits.

Yes, there is possibly the chance that deposits could revert just to keeping that money in storage (after all, who wants to carry all their money around in their house where they could lose it for good?) however, I don't see how banks could actually lose money, unless no one invested and the loans were not repaid and they weren't secured against property or anything like that.

[seireikhaan]

I will accept this argument I am slightly out of touch, because I have to say, how do banks lose money when they have lots of money?

Obviously, working on interest of the deposit and the interest of the repayment would correct the balance out? Also, I was meaning surplus money as being its own money, not actually deposits.

On deposits, yes. Depending on the type of account, they are required to pay interest to the person as payment for giving the bank the money.

Banks lose on money that's just sitting in a vault because of inflation- its sitting there, being slightly less valuable each day. Plus, if they could find someone who was a worthy candidate for a loan, they could give that money to them, and earn interest on it. Of course the loan could bust, but then, that's the nature of banking.

Also, just as an interesting tidbit- the money you deposit in your bank usually doesn't stay in it. Usually its sent out to other people/banks/businesses as a loan, and when you ask for your money back, you get some other person's cash that's on its twentieth loan trip through the banking system.

[Beskar]

Also, just as an interesting tidbit- the money you deposit in your bank usually doesn't stay in it. Usually its sent out to other people/banks/businesses as a loan, and when you ask for your money back, you get some other person's cash that's on its twentieth loan trip through the banking system.

We call this "The Credit Crunch" due to them relieving money against a wall and when people took out their deposits, the bank is left completely vulnerable and bankrupt.

Hence why the bank shouldn't go in the negative, and the surplus is there so any changes in the equilibrium can be cushioned.

Hence "Money has to come from some where", and as such, there needs to be some one, some where, which doesn't actually go into debt, unless it is a recipe for devastation.

I am fully aware that banks skate on a thin-line where they just give away money they don't have, relying on the future, but it really is a very poor practise. Debt overall needs to shrink everywhere.


As for inflation, I believe it is zero at the moment, or was it actually negative? Only good inflation has is for those indebt, as they only have to repay less, while people with savings lose out.

[seireikhaan]

We call this "The Credit Crunch" due to them relieving money against a wall and when people took out their deposits, the bank is left completely vulnerable and bankrupt.

Hence why the bank shouldn't go in the negative, and the surplus is there so any changes in the equilibrium can be cushioned.

Hence "Money has to come from some where", and as such, there needs to be some one, some where, which doesn't actually go into debt, unless it is a recipe for devastation.

Again, we're at a wall here. Simply put, your solution is far too extreme. As I've pointed out repeatedly, if you mandate that, credit slowly dries up and tightens the noose of too many banks. The credit market for those outside the larger business cycle will be vitally threatened, and you risk the very health of the economy by hoping that those that are benefited by the new barriers to entry will not fail. I agree that there's to be some limits in place, but limits that actually allow for credit to be available to those that need it.

[Beskar]

Again, we're at a wall here. Simply put, your solution is far too extreme. As I've pointed out repeatedly, if you mandate that, credit slowly dries up and tightens the noose of too many banks. The credit market for those outside the larger business cycle will be vitally threatened, and you risk the very health of the economy by hoping that those that are benefited by the new barriers to entry will not fail. I agree that there's to be some limits in place, but limits that actually allow for credit to be available to those that need it.

You could always just have one bank. The lack of competition would ensure money would flow easier (as it has a monopoly on the market).

As I said, this wouldn't be an overnight thing, and the good thing is, if it ends up being a little too extreme, you could always relax it by undoing the top button to find that happy place. As I am some one who does things in stages anyway, it probably would get to a point it would be too negative.

I think it is a difference in that I am far more optimistic and you are far more pessimistic about the possibility. There are millions of other factors we haven't even discussed and working out all of those, I believe a very stable and solid banking system could be done.

[drone]

You could always just have one bank. The lack of competition would ensure money would flow easier (as it has a monopoly on the market).

You may as well just bring back the gold standard.

The reason we are in trouble today is not because banks had debt, but because they had too much debt. When you deposit money into a bank, you are essentially loaning the bank money (usually at a fairly low interest rate). The bank makes money by then loaning money from deposits (or loans from the federal banks) out to people or companies at a higher rate. The payback of these loans are at a planned, scheduled rate, with some magic math added in to account for defaults. What is unscheduled and unplanned for is the amount of money deposited or removed by the account holders, so a bank run will crush the bank since it can't demand full loan repayments to cover. Bank runs are caused by the perception of vulnerability, even the best run bank in boom times could potentially be hit under the right circumstances.

What you seem to be proposing is that a bank must build up a huge amount of capital of it's own, independent of it's deposits, before making loans. This would pretty much kill the economy. A better solution would be to properly regulate the banks (holding and investment) so they do not become over leveraged. A debt-to-equity ratio of ~15:1 is fine, not the ~30:1 the US investment banks got to before the crash.

[Philippus Flavius Homovallumus]

Another major issue is that they took on debts they didn't know the value of.

The world works like this, there are 8 screwdrivers, we can either have 4 each, or we can swap around as we need them. Some days I have all 8, sometimes I have none; but it's like we both have 8. The problems only start when one of us decides not to share.

The problem with socialism is it tries to give everyone eight screwdrivers, socialists are greedy.

[Beskar]

The problem with socialism is it tries to give everyone eight screwdrivers, socialists are greedy.

8 screwdrivers, 4 people.


Capitalist - One person has 5, one has 2, one has 1, the other with none.

Socialist - Everyone has 2.

Only one person actually lost out, the person who had 5, while it is the same for one, and the other two benefitted.


Problem is, capitalists are greedy as they want the 5 screwdrivers and more, at the expense of the other 3.

[gaelic cowboy]

8 screwdrivers, 4 people.


Capitalist - One person has 5, one has 2, one has 1, the other with none.

Socialist - Everyone has 2.

Only one person actually lost out, the person who had 5, while it is the same for one, and the other two benefitted.


Problem is, capitalists are greedy as they want the 5 screwdrivers and more, at the expense of the other 3.

Actually shouldnt that read everyone has one screwdriver the other 4 were never made because the quota for four people was already reached. As a result actual electricians never got their screwdriver cos the quota for this year was done.

[Seamus Fermanagh]

8 screwdrivers, 4 people.


Capitalist - One person has 5, one has 2, one has 1, the other with none.

Socialist - Everyone has 2.

Only one person actually lost out, the person who had 5, while it is the same for one, and the other two benefitted.


Problem is, capitalists are greedy as they want the 5 screwdrivers and more, at the expense of the other 3.

Not quite. The idea behind capitalism is that the manufacturer of screwdrivers -- trying to sell as many as possible -- will come up with a less expensive way to make them. This should drive down the price of screwdrivers allowing the "rich" fellow to acquire 7, both of the "middlers" 2 each, and the "poor" chap can now actually get one because 12 can be made for the price that used to get 8.

[Beskar]

Not quite. The idea behind capitalism is that the manufacturer of screwdrivers -- trying to sell as many as possible -- will come up with a less expensive way to make them. This should drive down the price of screwdrivers allowing the "rich" fellow to acquire 7, both of the "middlers" 2 each, and the "poor" chap can now actually get one because 12 can be made for the price that used to get 8.

But Socialism doesn't equal Planned Economy. There is still supply and demand controlling prices and other things.

So while you are in the situation some guy now has 7, the other two has 2 and the poor has 1, in a ideal socialist, it would be 3,3,3,3 so in other words, everyone benefits except for one. However, it is usually not like that, so there might be some discrepancy like 4,3,3,2 since getting it truly equal is near impossible. Also, since it is possible for people are happy working for a 2 wealth as it makes them comfortable, they get more time off to do other things like leisure activities.

It is all a balancing act.

[Subotan]

Surely you would only ever need one screwdriver? This is a screwy analogy.

[Beskar]

Surely you would only ever need one screwdriver? This is a screwy analogy.

Different heads and sizes, no USB ports for DIY just yet.