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Discussing EU multilateral debt write-offs with Jeremy Vine

I was grateful to the BBC today for the opportunity to discuss my colleage Dr Anthony J Evans’ work for ESCP Europe on the potential for multi-lateral debt write offs between EU nations. You can find the interview here at about 1 hour 10 minutes and Anthony’s work is here. As I said in the interview, there are all kinds of catches and complexities but, as Anthony has said, multilateral debt write-offs between EU member states are a policy option. More of […]

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Accessible and insightful fiscal analysis with Ray Stevens

American musician Ray Stevens has produced this superb analysis of the Obama Budget Plan: I’m sure Ray has much to teach politicians and the public in the UK and Europe too, particularly about ethics and decency in the public finances. For more on that subject, see Jörg Guido Hülsmann’s brilliant book The Ethics of Money Production (PDF) and these sovereign debt projections from the Bank for International Settlements.

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Inflation and government borrowing

In his short article Inflation and You, Ludwig von Mises explains inflation itself, the social and economic effects of inflation, who inflation’s victims are, the futility of attempts to hedge against inflation, the moral and political effects of inflation and, finally, inflation and government borrowing. I thoroughly recommend the whole article, but I reproduce the section on government borrowing, which seems particularly pertinent at the moment: Inflation and Government Borrowing The writer, having witnessed the course of inflations in one European […]

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Spending – up. Borrowing – up. Debt interest – up.

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Via National Statistics Online – Public Sector Finances, the trajectory of cumulative public borrowing this year more or less matches last year: See also Deficit plan under pressure as UK borrows £14bn more in June. Here’s the tragedy: while my constituents and people across the country are seeing real reductions in services and worrying about cuts to public spending, public sector borrowing in June was slightly worse than last year and Government expenditure will increase in cash terms every year of the next five. In […]

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Are government bonds a good investment?

Scanning the news this morning, I read that pension funds and insurance companies are to be encouraged to hold more “safe” government bonds. I’m fairly sure this is a dreadful idea. Government bonds amount to a promise to tax productive activity later. Unlike corporate bonds, they do not represent investment in productive assets but, overwhelmingly, spending on present consumption. Borrowing to fund present consumption is a route to poverty, not prosperity. If major investors switch from supporting productive investment to […]

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The consequences of the impending national bankruptcies » The Cobden Centre

A fascinating perspective from Robert Thorpe at The Cobden Centre – The consequences of the impending national bankruptcies: The governments of Portugal and Ireland are waiting for Greece to default. If that happens then it will likely trigger the bankruptcy of several European banks*. This is the “Second Lehmann Brothers” the UK press have been discussing that could cause another financial crisis. I think such a crisis is likely to happen, but for political reasons more than economic ones. If one […]

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Bailouts are a dead end but bilateral debt cancellation could transform the European crisis

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Over on ConservativeHome, I introduce an interesting piece of work by Anthony J Evans and Terence Tse of ESCP Europe: Many will argue that Eurozone financial stability is in Britain’s interests and they are right. That’s why the Government should look carefully at a new report by two Associate Professors at ESCP Europe Business School: Anthony J. Evans (Economics) and Terence Tse (Finance). On their website, The great EU debt write off, Anthony and Terence explain a simulation conducted by their masters students: The […]

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Five videos for a better-understood new year

Some of these videos are in a US context, but the concepts apply to the UK and Europe. (We’ll just have to raise the funds to have such things done in the UK…) On levels of debt: On the madness of QE and the current economic consensus: On the battle of economic ideas: What worked for the republic of Georgia: My presentation on honest money and the future of banking (follow the link for the slides):

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Panel discussion held in Parliament on Martin Durkin’s film Britain’s Trillion Pound Horror Story

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In November 2008, the Institute of Economic Affairs published Nick Silver’s A Bankruptcy Foretold: The UK’s Implicit Pension Debt (PDF), which argued that if the UK’s debt is calculated in line with generally-accepted accounting principles, it is something over £4 trillion. In June this year, an update was published, putting the full scale of the British state’s liabilities at £4.8 trillion, which is around 333% of GDP or £78,000 per person. For comparison, the Budget Red Book (page 2) forecasts […]

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Tonight: Britain’s Trillion Pound Horror Story

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Britain’s Trillion Pound Horror Story will be transmitted on Channel 4 tonight at 9pm: Film maker Martin Durkin explains the full extent of the financial mess we are in: an estimated £4.8 trillion of national debt and counting. It’s so big that even if every home in the UK was sold it wouldn’t raise enough cash to pay it off. Durkin argues that to put Britain back on track we need to radically rethink the role of the state, stop politicians […]

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