alt Hacker NewsBetting on economic growth exceeding the piling up of debt is something most governments around the world have been doing for about 40 years straight now.
Betting on economic growth exceeding the piling up of debt is something most governments around the world have been doing for about 40 years straight now.
Exactly, this is MUCH less betting anything as it is evaluating options and picking the most thinly veiled excuse to keep spending:
1) economic reality of an aging population and the gdp = population * efficiency equation, which now in every last EU country requires constant reductions in government spending until, at minimum 2050
2) find some excuse to predict economic growth and keep (or even increase) spending, note: this is not something these governments necessarily actually believe, this is something to tell investors
This is an extremely self-serving money NOW effort where someone used a secondhand crayon to write "strategy" on it. But it's not like governments actually have a real choice in this, a message the people for example gave to French government, a big unmissable message set in flame across the streets of Paris.
The truth is that stock market margin debt, what usually sets of crises, is not at cycle highs, surprisingly, it's at maybe 60-70%. Government debt is high but is at about 70% of the hillbilly point, the point where new borrowing only gives you interest payments and no longer enables you to spend more. Which means company spending will rise and government spending will rise for ~2 years from this point forward.