# Debt death spiral **URL:** \ **Category:** Macro Economic Trends and Risks\ **Created:** [January 22, 2025, 12:39pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526 "2025-01-22T12:39:10Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Divitias](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/divitias/32/9302_2.png) [@Divitias](https://discussion.fool.com/u/Divitias)\ **Post date:** [January 22, 2025, 7:19pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/21 "2025-01-22T19:19:40Z")
> [@Hawkwin](#): > > So you reject it based on an ad hominem logical fallacy and not based on an actual review and consideration of the data. It was rejected on the basis of who commissioned it and who paid for it. Give me enough money and I’d write a report on something happening that could never be disproved. He’d be better spending the money on the rising knife crime in London: > **[Reform UK demands Sadiq Khan impose Public Order Emergency to halt 'knife...](https://www.gbnews.com/politics/reform-uk-sadiq-khan-knife-crime-london-impose-public-order-emergency)** > > A 14-year-old boy was stabbed to death on a bus in London in broad daylight yesterday ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [January 22, 2025, 7:19pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/22 "2025-01-22T19:19:42Z")
> [@Goofyhoofy](#): > > No, the reactionaries took the pistol, aimed it straight at their head, and pulled the trigger. Same folks complaining about wokies, nationalism, immigrants and such now. Liz Truss. She destroyed the UK. Absolutely destroyed the economy. ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [January 22, 2025, 7:20pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/23 "2025-01-22T19:20:47Z")
> [@Divitias](#): > > Give me enough money and I’d write a report on something happening that could never be disproved. That is not true. You have never done so for free right here. You have made endless attempts. Money won’t make your arguments any better. ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [January 22, 2025, 7:22pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/24 "2025-01-22T19:22:30Z")
> [@btresist](#): > > The vast majority of the Brexit impact studies suggest the UK economy will grow more slowly after Brexit than it would do as a member of the EU, with those predictions ranging from a negligible cost to an 18% reduction in output in 2030 compared to a world in which the UK remained a member of the EU. years ago before labour took power. The money currently being spent to open factories is worth every pound of it. ---
**Author:** ![Divitias](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/divitias/32/9302_2.png) [@Divitias](https://discussion.fool.com/u/Divitias)\ **Post date:** [January 22, 2025, 7:32pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/25 "2025-01-22T19:32:38Z")
> [@Leap1](#): > > Money won’t make your arguments any better. Send me some money and see the result 🙂 ---
**Author:** ![Hawkwin](https://g.foolcdn.com/misc-assets/discourse-member-avatar_120px_green600.png) [@Hawkwin](https://discussion.fool.com/u/Hawkwin)\ **Post date:** [January 22, 2025, 7:48pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/26 "2025-01-22T19:48:55Z")
> [@Goofyhoofy](#): > > No, I reject it based on results. Dude, my reply was not to you. I even quoted the name of the poster. ![image](https://us1.discourse-cdn.com/motleyfoolfree/original/3X/1/b/1bdf6d0ec9963e30af352cb28f644c26878109da.png) ---
**Author:** ![MarkR](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/markr/32/2011_2.png) [@MarkR](https://discussion.fool.com/u/MarkR)\ **Post date:** [January 22, 2025, 8:28pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/27 "2025-01-22T20:28:15Z")
> [@DrBob2](#): > > The difference is that GDP growth in the US is running at a bit under 3%. Not stagnant. But the debt growth is higher, and even if deficits hit zero (of current spending), if the interest rate is higher than the GDP growth rate, the debt still grows faster than GDP (because 4% of $36T is more than 3% of $27T). Heck, even if interest rates were to drop from ~4% to 2.5%, the debt growth will still outpace GDP growth (2.5% of $36T is more than 3% of $27T). ---
**Author:** ![Leap1](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/leap1/32/72176_2.png) [@Leap1](https://discussion.fool.com/u/Leap1)\ **Post date:** [January 23, 2025, 12:45pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/28 "2025-01-23T12:45:37Z")
Taxes on the rich need to be higher. But I am going to enjoy the next four years. Assuming my video game does well. Even a small market would be a very good return. ---
**Author:** ![Goofyhoofy](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/goofyhoofy/32/4721_2.png) [@Goofyhoofy](https://discussion.fool.com/u/Goofyhoofy)\ **Post date:** [January 23, 2025, 12:45pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/29 "2025-01-23T12:45:40Z")
> [@Hawkwin](#): > > Dude, my reply was not to you. I even quoted the name of the poster. This is a message board. You should expect people who read it to, well, have opinions. Perhaps even to post them. This is not a new concept. ---
**Author:** ![btresist](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/btresist/32/1678_2.png) [@btresist](https://discussion.fool.com/u/btresist)\ **Post date:** [January 23, 2025, 1:12pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/30 "2025-01-23T13:12:02Z")
> [@Divitias](#): > > Compared with the rest of the Eurozone we have held our own and are streets ahead of Germany whose economy is shrinking: Germany also has shot itself in its economic foot, though with a different gun (really pushing this metaphor). Ukraine and Russian sanctions created an energy shortage that Germany responded to by shutting down its nuclear plants. German companies made big investments in marketing BEVs that Germany responded to by abruptly ending EV subsidies to collapse the domestic market. This at the same time German car company sales in China collapsed because they are so far behind in EV tech. Germany made multiple mistakes. The UK made one huge mistake—Brexit. The negative impact of Brexit was predicted and you have documented in your OP that it occurred. Also note that UK debt is about 100% of it GDP. In Germany that metric is about 60%. No doubt Germany could outperform the UK if it wanted to deficit spend at the same level. ---
**Author:** ![Divitias](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/divitias/32/9302_2.png) [@Divitias](https://discussion.fool.com/u/Divitias)\ **Post date:** [January 23, 2025, 1:44pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/31 "2025-01-23T13:44:28Z")
> [@btresist](#): > > The UK made one huge mistake—Brexit. The negative impact of Brexit was predicted and you have documented in your OP that it occurred. Interestingly, Bloomburg worked out that Brexit cost us £100 billion, but, from what i remember this was based on a massive increase in foreigners workers coming to the UK. ---
**Author:** ![btresist](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/btresist/32/1678_2.png) [@btresist](https://discussion.fool.com/u/btresist)\ **Post date:** [January 23, 2025, 2:00pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/32 "2025-01-23T14:00:48Z")
> [@Divitias](#): > > Interestingly, Bloomburg worked out that Brexit cost us £100 billion, but, from what i remember this was based on a massive increase in foreigners workers coming to the UK. Nope. It was speculated as resulting from reduced business investment and a worker **shortage** resulting from 370,000 **fewer** EU workers. > **[Brexit is Costing the UK £100 Billion a Year in Lost Output](https://www.nasdaq.com/videos/brexit-is-costing-the-uk-ps100-billion-a-year-in-lost-output)** > > From business investment to the ability to hire workers, Brexit is costing the UK $124 billion (£100 billion) a year in lost output, according to Bloomberg Economics. Alex Morgan explains. ---
**Author:** ![Divitias](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/divitias/32/9302_2.png) [@Divitias](https://discussion.fool.com/u/Divitias)\ **Post date:** [January 23, 2025, 2:08pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/33 "2025-01-23T14:08:57Z")
That doesn’t make sense as migration has soared in the UK in the last two/three years: > Net migration was unusually high in the year ending June 2024, driven primarily by high demand for workers in the health and care sector and an increase in international student numbers > **[Net migration to the UK - Migration Observatory](https://migrationobservatory.ox.ac.uk/resources/briefings/long-term-international-migration-flows-to-and-from-the-uk/)** > > An overview of net migration in the UK – defined as the difference between immigration and emigration of people moving for at least a year. > In the last two years, estimated immigration to the UK was approximately 2.5 million > **[Immigration claims in the 2024 general election: fact checked - Full Fact](https://fullfact.org/election-2024/immigration-claims-roundup/)** > > Claims about legal and illegal migration have been prominent in the election campaign. Here’s a roundup of our verdicts on some of the key claims from the major political parties. I can’t find the link but I have heard that we are looking at another 2.5 million in the next two years. If being in the EU would increase the above figures then heaven help us! ---
**Author:** ![Hawkwin](https://g.foolcdn.com/misc-assets/discourse-member-avatar_120px_green600.png) [@Hawkwin](https://discussion.fool.com/u/Hawkwin)\ **Post date:** [January 23, 2025, 2:13pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/34 "2025-01-23T14:13:02Z")
> [@Goofyhoofy](#): > > This is a message board. You should expect people who read it to, well, have opinions. Perhaps even to post them. LOL, your reply to me makes no sense. I shared the same objection to the OP as you did. ---
**Author:** ![btresist](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/btresist/32/1678_2.png) [@btresist](https://discussion.fool.com/u/btresist)\ **Post date:** [January 23, 2025, 4:46pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/35 "2025-01-23T16:46:57Z")
> [@Divitias](#): > > That doesn’t make sense as migration has soared in the UK in the last two/three years: Temporary post-covid blip. Work visa numbers indicate a sharp decline in immigration going forward with an increase in emigration. As immigrants are made to feel less welcome, the huge influx of foreign students trained in the UK and who are keeping UK universities from financial ruin are expected to leave in higher numbers. All part of a general “brain drain” of UK grads who plan to leave for the EU, with Spain, Portugal, and Italy top of the list: [Billionaire Warns of UK Brain Drain as 38% of Brits Under 35 Plan To Leave in the Next 5 Years | IBTimes UK](https://www.ibtimes.co.uk/fintech-billionaire-warns-brain-drain-38-under-35s-plan-leave-uk-next-5-years-1729172) This will probably help with the housing shortage but hurt the economy. Expectations are that with reduced migration the debt will increase. > OBR also [observed](https://obr.uk/docs/dlm_uploads/E03057758_OBR_EFO-March-2024_Web-AccessibleFinal.pdf) that a ‘low migration’ scenario would – even after taking account of reduced pressures on public spending – push up borrowing by about £14 billion per year in 2028-29, considerably more than the cost of a 2p cut in National Insurance contributions, and raise the debt to GDP ratio – the government’s key fiscal target – by about 2.5%, or about £75 billion. > [Immigration is falling but the economic cost may be high - UK in a changing Europe](https://ukandeu.ac.uk/immigration-is-falling-but-the-economic-cost-may-be-high/) That’s because all those immigrants paid more taxes than they used in public services. Also, those immigrants helped alleviate work shortages in UK tech and health care and social care. Expect longer NHS wait times as migration declines and if you are old, Good Luck!. But at least there will be a lot fewer foreigners. Yippee! ---
**Author:** ![DrBob2](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/drbob2/32/3456_2.png) [@DrBob2](https://discussion.fool.com/u/DrBob2)\ **Post date:** [January 23, 2025, 4:53pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/36 "2025-01-23T16:53:30Z")
> [@btresist](#): > > This will probably help with the housing shortage but hurt the economy. Don’t know about the UK, but in the Netherlands the net cost is negative for many immigrants. From the University of Amsterdam School of Economics: **Borderless Welfare State: The Consequences of Immigration for Public Finances** van de Beek et al. > **[Borderless\_Welfare\_State-2.pdf](https://demo-demo.nl/wp-content/uploads/2023/06/Borderless_Welfare_State-2.pdf)** From Table 0.2, Average net contribution of immigrants to public finances, by immigration motive and region, including the cost for the second generation ``` Labor immigration from Japan, North America & Oceania 625K euro Asylum immigration from Africa - 625K Study immigration from EU 75K Study immigration from Africa - 250K ``` “_If immigration remains at the 2015-2019 level in terms of size and cost-benefit structure, the annual budget burden will gradually increase from 17 billion euros in 2016 to about 50 billion euros per year in the long run, **a threefold increase that the welfare state most likely wouldn’t survive**._” DB2 ---
**Author:** ![btresist](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/btresist/32/1678_2.png) [@btresist](https://discussion.fool.com/u/btresist)\ **Post date:** [January 23, 2025, 4:54pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/37 "2025-01-23T16:54:44Z")
> [@Divitias](#): > > If being in the EU would increase the above figures then heaven help us! I think what you are missing is that the EU immigrant is generally different from the nonEU immigrant. The EU immigrant preBrexit was mostly likely recruited by UK companies to work, taking advantage of the free movement of workers. The nonEU immigrant was primarily coming to go to school, join family or for jobs in health care or social services. This difference means there is a work shortage in a lot of UK industries that didn’t exist preBrexit. ---
**Author:** ![Divitias](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/divitias/32/9302_2.png) [@Divitias](https://discussion.fool.com/u/Divitias)\ **Post date:** [January 23, 2025, 4:57pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/38 "2025-01-23T16:57:05Z")
> [@btresist](#): > > That’s because all those immigrants paid more taxes than they used in public services. Also, those immigrants helped alleviate work shortages in UK tech and health care and social care. Expect longer NHS wait times as migration declines and if you are old, Good Luck!. One in thirty people walking the streets of the UK came here in the last two/three years. 14% of the UK’s population is foreign born: > **[Net migration to the UK - Migration Observatory](https://migrationobservatory.ox.ac.uk/resources/briefings/long-term-international-migration-flows-to-and-from-the-uk/)** > > An overview of net migration in the UK – defined as the difference between immigration and emigration of people moving for at least a year. Our GDP has stagnated: > The UK economy remained stagnant in the third quarter of the year, with the quarter-on-quarter gross domestic product (GDP) growth rate coming in at 0%, according to the Office for National Statistics. > **[UK economy stagnates as concerns of recession increase](https://www.euronews.com/business/2024/12/23/uk-economy-stagnates-as-business-leaders-warn-of-worst-of-all-worlds)** > > Revised figures show that the UK's economy registered zero growth between July and September as both the services and production sectors saw marked declines. Per capita GDP has declined! ---
**Author:** ![btresist](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/btresist/32/1678_2.png) [@btresist](https://discussion.fool.com/u/btresist)\ **Post date:** [January 23, 2025, 5:07pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/39 "2025-01-23T17:07:32Z")
> [@Divitias](#): > > Per capita GDP has declined! As the facts show, Brexit was a huge economic mistake. Per capita GDP would have been worse without immigration. ---
**Author:** ![MarkR](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/markr/32/2011_2.png) [@MarkR](https://discussion.fool.com/u/MarkR)\ **Post date:** [January 23, 2025, 5:11pm UTC](https://discussion.fool.com/t/debt-death-spiral/112526/40 "2025-01-23T17:11:54Z")
> [@DrBob2](#): > > Average net contribution of immigrants to public finances, by immigration motive and region, including the cost for the second generation Sure. But it’s similar to a startup and capex investment. Most of the time the initial investment into a business doesn’t pay off for a good number of years. This is why businesses often do not declare a financial profit for many years after startup (because they are taking depreciation of all the startup costs). Immigration is similar in that respect, the first few generations are a cost, but thereafter become a gain, and likely gain that compounds forever. And there is another issue that has to be taken into account. If you don’t welcome immigration, _and_ you don’t produce your own new humans, what happens over time? You shrink and maybe even eventually disappear … that’s what happens. That’s [what’s happening to Japan](https://www.nippon.com/en/japan-data/h01664/), for example. ![2395401](https://us1.discourse-cdn.com/motleyfoolfree/original/3X/d/0/d0f4b1b74390e60ad18db5a25f4f1e3ae0883644.png) [Previous page](https://discussion.fool.com/t/debt-death-spiral/112526.md?page=1) [Next page](https://discussion.fool.com/t/debt-death-spiral/112526.md?page=3)