The article below was originally published at Morganist Economics and is copyright © 2020 Peter James Rhys Morgan. http://morganisteconomics.blogspot.com/2020/10/using-pension-fund-easing-to-close.html Using Pension Fund Easing To Close The Government Spending Deficit And To Reduce The Overall Government Debt. By Peter Morgan. 19:28 09/10/20. When government spending exceeds government revenue over a specific period of time the surplus government expenditure is referred to as the government deficit. The government deficit is only the amount of overspending a government generates over a set period of time, which is different to the government debt. The government debt is the total amount of debt the government generated throughout the entire period of time that it began to borrow money. To be capable of paying off the outstanding government debt the government deficit has to be closed by increasing government revenue until it surpasses governmental expenditure, when government income exceeds government spending it is referred to as the government surplus. Once the government is in surplus the excess income can be used to pay off the outstanding government debt, this is the traditional method of reducing the total government debt to GDP. There is another method of reducing the total government debt to GDP that can be achieved without having to pay off any of the outstanding government debts. Increasing economic growth will reduce the amount of total government debt as a percentage of GDP, reducing the relative amount of money the government has to pay back from future revenue. The increase in GDP also boosts future governmental revenue streams making it easier to pay the debt off. By generating further economic growth it is possible to reduce the relative amount of total government debt to the overall level of economic output, which is effectively outgrowing the government debt. Even if the government deficit is not closed if the rate of economic growth exceeds the rate of government borrowing the amount of total government debt will decrease in relation to GDP, no debt has to be repaid but a higher rate of economic growth is required. The government can in effect continue to borrow money, maintaining a deficit, but reduce the total amount of government debt in relation to GDP, as long as the rate of economic growth is greater than the deficit. As long as economic growth is higher than the deficit during the same period of time overall government debt will fall as a percentage of GDP. Attaining economic growth over prolonged periods of time can dramatically reduce the government debt to GDP. Pension Fund Easing has the ability to stimulate additional economic growth by increasing the velocity of transactions during a specific period of time, through the superior placement of the money invested in pension funds. By increasing economic growth for sustained periods of time even by small percentages it is possible to reduce government debt to GDP massively. Even if the government has a deficit if it is exceeded by growth it will reduce debt to GDP. Although it is possible to reduce the percentage of government debt to GDP while there is still a government deficit, as long as economic growth is greater than the shortfall, it is best to get rid of the deficit first to slash the amount of government debt through sustained economic growth. It might be possible to generate a further 4% of economic growth per year from the use of 'Pension Fund Easing', that will help to close the deficit and pay off government debt.
Thanks, I will change it to extra instead. Writing an article like this can be confusing, I used the wrong word in the wrong place by accident. Thanks for pointing it out.
Ok, but curious you never find spending less a solution or at least part of one? Correct me if I am wrong.
I think I may have been using the second definition of surplus or got the wrong word. The second definition of surplus just means an excess of anything, according to a google definition search. Anyway I changed it to excess to make it clearer, thanks for the tip off as to how people will read it. It is hard being the writer to appreciate how other people with perceive the articles and other work you write so feedback is vital, I appreciate it. To answer your questions, which is I assume. Why don't you cut government spending to reduce the government debt? If this is your question the answer is this. Government spending can support an economy and makes sure vital services are provided, reducing government spending is politically difficult and can be hard to implement due to opposition in both the lower house and the higher house of government. There are also legal requirements for certain criteria to be paid for, which the government can be sued for if they do not comply with them. I want to avoid these issues by outgrowing the government debt as a percentage of GDP using a new economic stimulation technique that has been unappreciated previously. I feel the political and legal position of fiscal policy has constrained it and monetary policy it too constrained to create much more stimulation. There is massive room for the use of Pension Fund Easing, the superior directing of the money invested in pension funds to increase the velocity of transactions within an economy. This has not been appreciated previously and it certainly has not been utilised fully even by accident. This can be changed and it could be introduced to gain additional economic growth to speed up the shrinking of government debt as a percentage of GDP.
Well that sums it up. It is the easiest option, plus it is the most inexpensive and least consequential. Anyway I wrote a paper on it and sent it to the Chancellor of the Exchequer and the Treasury departments of many different countries that have had problems with the Coronavirus. When problems like this happen I release papers that resolve many of the issues.
This is beyond a joke. The evidence is copyrighted, published and has the permission and approval of the government, parliament and the politicians involved. I have shown you clear evidence of this.
No, this is beyond a joke: https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/ihyp/pn2