Here's @RichardJMurphy pointing out the socially positive role that public debt plays in a modern capitalist society... so ignore the headlines & read Murphy's alternative Govt. press release on todays news of 'record' borrowing.

Good sense is easy to find once you step away from the mainstream media.

#politics #media #PublicDebt #economics

https://www.taxresearch.org.uk/Blog/2025/07/22/the-press-release-that-should-have-been-issued-on-todays-government-borrowing-figures/

https://www.europesays.com/2231431/ Rewiring Sovereign Capital: Europe’s structured liquidity revolution #AltFundsGlobal #CarbonCredits #ClimateCommitments #Economy #EconomyOfEU #EconomyOfEurope #EconomyOfEuropeanUnion #EconomyOfTheEU #EconomyOfTheEuropeanUnion #EUEconomy #Europe #EuropeMarkets #EuropeanMarkets #infrastructure #markets #MiddleEast #PublicDebt #SovereignBonds #SovereignCapital #SovereignWealthFunds #TaimourZaman #TraditionalDebt

"What happens when you crush the spending power of the people and you give lots of money to big business? Big business collects this money — of course, it’s free money; why wouldn’t they take it? But they look outside the window of their skyscraper in Paris or Frankfurt, and all they see are impecunious masses.

They’re not going to invest, because the many out there can’t afford to buy high value-added goods. But they have this money that has been printed and given to them, so what do they do? They go to the stock exchange and they buy back their own shares.

Their share price goes through the roof, and their bonus is connected to their share price, so they are laughing all the way to the bank. They go and buy a new apartment, a new yacht, more Bitcoins, a work of art. Asset prices go up, while the many are still impecunious and there’s no investment.

After fifteen years of that, it’s the end of Europe. It is the reason why Germany is now deindustrializing. It is deindustrializing because it did not invest anything in the last fifteen years. The managing directors and the members of the board of directors were doing splendidly, but they were not investing.

While the Chinese were investing their heads off and Elon Musk was investing in Tesla, SpaceX, Starlink, and so on, Europe had zero net productive investment for something like sixteen or seventeen years. That is preposterous. The result is that now, Europe is dying. If people ask — and they should ask — why it is that fascism is having a second or third wind, it is because this is what happens when you have something like 1929."

https://jacobin.com/2025/07/yanis-varoufakis-on-the-legacy-of-greeces-oxi-referendum

Foreign minister: Estonia will have to borrow more to hike defense spending | News https://www.byteseu.com/1159896/ #borrowing #DefenseSpending #Estonia #eu #MargusTsahkna #PublicDebt #safe #SvenMikser

Bank of Finland forecasts slow recovery, rising debt https://www.byteseu.com/1097105/ #BankOfFinland #EconomicOutlook #EconomicRecovery #Finland #FinlandGDP2026 #FinnishEconomy #FiscalDeficit #GDPForecast #PublicDebt

EU allows Bulgaria to use euro from 2026, but wants it to ‘fight corruption’ – Firstpost https://www.byteseu.com/1074315/ #Bulgaria #CurrencyTransition #ECB #EconomicIntegration #EUAllowsBulgariaToUseEuroFrom2026 #EuroAdoption #EuropeanUnion #Eurozone #Inflation #PublicDebt #Russia

LoL - Where there's smoke, there's fire and we all know that for the foreseeable future the US will need to continue to buy lots of weapons to send for free to Israel :-D

"Treasury secretary Scott Bessent has insisted the US would never default on its debt as he sought to assuage Wall Street concerns over the state of the country’s public finances.

“The United States of America is never going to default, that is never going to happen,” Bessent told CBS’s Face the Nation on Sunday. “We are on the warning track and we will never hit the wall.”

Investor jitters over the size of the US federal debt have mounted as President Donald Trump has urged Congress to push through his “big beautiful” budget bill, which is expected to ratchet up the federal deficit.

Bessent dismissed concerns raised by JPMorgan Chase chief executive Jamie Dimon on Friday that the US bond market would “crack” under the weight of the country’s rising debt."

https://www.ft.com/content/9c652f09-cfca-4078-9e2b-5fdacd772a75

"Since the Seventies, America’s deficits have provided East Asia (first Japan, then China) and Europe (primarily Germany) the demand for their factories’ manufactures. In return, the European Union, Japan and later China sent their accumulated profits to Wall Street to be recycled into US private and public debt, some equities, and real estate. A Chinese official once described this mechanism to me as a “dark deal”. “Our Dark Deal with the Americans,” the official explained, “turns on the US trade deficit, which keeps demand for our manufactures high. In return, our capitalists invest the bulk of their dollar superprofits into America’s FIRE”. (The acronym stands for “Finance, Insurance, and Real Estate.”) “Once this process got underway, America shifted much of its industrial production to our shores.”

The problem with this global recycling mechanism was that, to function smoothly, it had to generate larger and larger imbalances: greater trade deficits for the US and more accumulated savings for Northern Europe and East Asia. But there are limits to how large imbalances can grow. Ruptures are inevitable. The longer they are delayed, the greater the pain they inflict — a truth that centrists never acknowledged, not even when it was tearing down their houses.

Trump’s greatest strength comes from asking the pressing question that the centrists refuse to countenance: what comes after the Dark Deal? What comes after the imbalances built on the US trade deficit have proven unsustainably massive? Scott Bessent, Trump’s Treasury Secretary, put it succinctly in a recent speech at the IMF: “Everywhere we look across the international economic system today, we see imbalance… This status quo of large and persistent imbalances is not sustainable… The persistent over-reliance on the United States for demand is resulting in an evermore unbalanced global economy.”"

https://unherd.com/2025/05/the-centrist-comeback-wont-last/

"Japan’s finance minister has publicly identified the country’s more than $1tn holdings of US Treasuries as a “card” in its trade negotiations with the Trump administration, in a rare baring of teeth by America’s closest ally in Asia.

Speaking during a television interview on Friday, Katsunobu Kato was asked whether Japan would use its traditional stance as a non-seller of Treasuries as a tool in trade talks with Washington.

“It does exist as a card,” said Kato, adding that “whether or not we use that card is a different decision”.

Japanese holders, including the government, own $1.13tn of Treasuries, the largest hoard held by a foreign nation.

There is no suggestion that Tokyo is considering any sales of official Treasury holdings. But traders said that even the reference to such an action as a “card” could add to volatility in a US bond market that has lurched violently since April 2 when Donald Trump announced sweeping “reciprocal” tariffs on US trade partners."

https://www.ft.com/content/912f861f-26c8-4bcd-aca0-75a09e5767cc

Hmmm... I see that Japan, the largest holder of US T-bills (US public debt), now sees them as a 'card' in their negotiations with the US over tariff levels. They claim they are not considering divesting, but even to call it a card must put their holdings 'into play'....

How this will play in the Court of the Tangerine Tyrant will be interesting.

#PublicDebt #politics #japan

h/t FT

Trade war threat looms over Finland’s economic recovery, says ministry forecast https://www.byteseu.com/972325/ #DefenceSpending #EconomicForecast #Employment #EUTariffs #Finland #FinlandEconomy #FinnishExports #FinnishGDP #GovernmentDeficit #Inflation #MinistryOfFinance #PublicDebt #TradeWar

"Analysts and fund managers say the Treasury sell-off was primarily powered by a retrenchment of investors from the US government bond market, fearful that tariffs would fuel inflation and unnerved by what some say is an increasingly erratic administration that has antagonised allies and imperilled the country’s own economy.

However, many stress that the turmoil was also exacerbated by highly leveraged hedge fund strategies. These “relative-value” trades usually seek to take advantage of often tiny differences in prices between Treasury bonds and various derivatives contracts linked to them. Using short-term funding markets to borrow extreme amounts of money, they can transform small profits into large ones.

These trades have helped turn the club of big hedge funds that pursue them into vital pillars of the $29tn Treasury market, helping restrain the US government’s borrowing costs at a time when interest rates have been rising. Their importance is only likely to climb if foreign investors pull back from the Treasury market, as many analysts and fund managers predict.

However, many fear that they also make Treasuries vulnerable to sudden shocks."

https://www.ft.com/content/0bf5bcc2-6ff1-4309-afbf-f470250a4721

https://www.europesays.com/2019857/ IMF says tariff pressures to push global public debt past pandemic levels #business #DefenseSpending #EconomicPressures #Economy #FiscalDeficits #GlobalGDP #GovernmentBudgets #InternationalMonetaryFund #PublicDebt #VitorGaspar

https://www.europesays.com/2001902/ We will not default in loan repayment #business #default #Economy #Finance #JOHNMBADI #NdindiNyoro #PublicDebt #StarNews #StarNewsKenya #TheStar #TheStarNewspaper

"In the case that concerns us here, the request to the IMF for a loan violates not only the National Constitution but also Law 27,612, passed in 2021, whose second article states that “any financing program or public credit operation carried out with the IMF, as well as any extension of the amounts – in addition to terms and conditions – of such programs or operations, shall require a law of the Honorable Congress of the Nation that expressly approves it.” In short, Javier Milei’s government is acting in open violation of the Constitution and the laws of this country, something that prima facie would violate the IMF’s own regulations, whose Board, if it did not take this situation into account, would become an accomplice in a violation of the Constitution and the laws of Argentina.

In view of this accumulation of irregularities, the debt that Argentina may contract becomes an “odious debt” not enforceable by the eventual creditors, in this case the IMF. This is something that has been sustained by US jurisprudence since the end of the 19th century up to the present day. "

https://socialistproject.ca/2025/03/open-letter-to-kristalina-georgieva-imf/

'fiscal credibility' cont'd:

The UK has no record of defaults & is very unlikely to now, so the real issue is yield (price of bonds). The lower the price the higher the yield of existing bonds on the secondary market, and the higher the interest rate that would need to be offered on new issues to 'encourage' buyers.

This comes down to better profits for investors - so the judgement of 'bond vigilantes' is all about their profits when they spot political weakness!

#PublicDebt #politics
2/2

This week, you're going to hear a lot about 'fiscal credibility' & the 'bond market sentiment'.... to translate:

Investors who buy/deal in public debt are expected to judge Rachel Reeves Spring Statement by how it will support growth, & importantly produce an economy without an inflation 'problem'.

Bond holders want a stable currency for their assets (Gilts/public debt) so interest payments hold their value & a clear indication of no default.

1/2

The next time someone tells you that the UK public debt service costs are unsustainable & as a result cuts are required to public sector budgets (such as welfare or health) you might want to show them the chart below, which shows the UK is both below the OECD average & well below the proportion paid by the USA.

Such claims are not economics but political cover for cuts they want to make regardless of any fiscal rules or claims for probity!

Just sayin'

"La France Insoumise MP David Guiraud told Jacobin in January that France’s manufactured deficit crisis was part of a premeditated plan to cut social spending.

“French capitalists have never tolerated social security,” Guiraud said then. “When it was created . . . it was hundreds of billions of euros which escaped the logic of the private sector, hundreds of billions of euros which they couldn’t make a profit off of. They know that they’re breaking social security. They know it. I think they do it deliberately for the most part.”

Boosting military spending while trying to maintain “fiscal discipline” will result in the same thing. A column by Janan Ganesh in the Financial Times on March 5 titled “Europe must trim its welfare state to build a warfare state” gave away the game even more directly.

“[T]he welfare state as we have known it must retreat somewhat: not enough that we will no longer call it by that name, but enough to hurt,” Ganesh wrote.

The threat of war is a useful motive.

“Chronic discomfort isn’t enough,” Ganesh elaborated. “An element of real fear has to come in, as perhaps it has now.”"

https://jacobin.com/2025/03/france-eu-defense-spending-austerity