
Countries are still paying off debt from World War 1 - gamechangr
http://qz.com/290183/in-2014-countries-are-still-paying-off-debt-from-world-war-one/
======
EliRivers
On a related note, shells fired during WWI are still killing people today.
Hell of a thing, to fire a weapon and kill someone a hundred years later.

[http://www.bbc.co.uk/news/world-
europe-26654314](http://www.bbc.co.uk/news/world-europe-26654314)

~~~
patio11
The most recent casualty of the U.S. Civil War lived to see Obama voted into
office. He is unlikely to be the last.

UXO is a hell of a thing.

~~~
cbd1984
The last Civil War veteran died in 1956; the last to have seen combat died in
1953.

[http://en.wikipedia.org/wiki/Albert_Woolson](http://en.wikipedia.org/wiki/Albert_Woolson)

[http://en.wikipedia.org/wiki/James_Hard](http://en.wikipedia.org/wiki/James_Hard)

And the last Revolutionary War veteran died in 1866. (The year after our Civil
War ended, in case you don't know much American history.)

[http://en.wikipedia.org/wiki/Lemuel_Cook](http://en.wikipedia.org/wiki/Lemuel_Cook)

~~~
Figs
They're talking about unexploded ordnance:
[http://en.wikipedia.org/wiki/Unexploded_ordinance](http://en.wikipedia.org/wiki/Unexploded_ordinance)

I don't know if there's a more recent example of Civil War UXO causing
injuries, but here's a news article about a man killed in February 2008:
[http://www.foxnews.com/story/2008/05/02/virginia-man-
killed-...](http://www.foxnews.com/story/2008/05/02/virginia-man-killed-in-
civil-war-cannonball-blast/)

~~~
patio11
That is the incident I was thinking of, although I seem to have misremembered
the date of it.

------
cperciva
Misleading. The debts in question could have been paid off years ago if anyone
had wanted to, but they were at such low rates of interest that it was better
to pay off more recent debts instead.

~~~
mtmail
True. In 1990 Germany had €125 million debt outstanding. Easy to pay off if
they wanted. Instead a new contract was signed with 20 annual installments.

~~~
brazzy
And note that those 125 million were only outstanding because their payment
had been frozen while the country was divided. Someone made a HUGE profit on
what were fore decades essentially super-junk bonds.

------
frik
The country next to Germany, Austria, has to pay to both the allied forces and
soviets (russia) for WW 1 & WW 2: much of the former land mass that formed
Austria (it's now tiny), a lot of money, gold, natural ressources (like rare
earth and food to the soviets) and as usual after wars they captured and
removed all valuable technology. The allied bombed many cities and railway
stations and 10% didn't exploded and many are still in the ground (the
chemical ignotion mechanism is still active and several bombs detonate each
year).

~~~
eliben
Is your comment supposed to make someone feel sorry about a country that
helped start wars that led to _tens of millions of lost lives_ and devastated
much of the continent for decades?

~~~
junto
I'm British and live in Germany. My grandparents and my wife's grandparents
fought on different sides of WWII. In WWI my grandfather won the Military
Medal (the highest possible recognition for a non-commisioned soldier) aged
19.

My children have dual nationality. Let's apportion your Nazi blame on them
shall we?

Attitudes like yours solve nothing.

------
justincormack
Governments have rarelybpaid down debt in absolute terms (there are exceptions
eg Australia at one point). Generally it shrinks as a percentage if GDP at
best. If nominal GDP ever stops growing it will never be paid off. Hence 2%
inflation targets...

~~~
seanmcdirmid
Taking on debt is also necessary for a functioning financial system with the
US gov playing an important role as global debtor of last resort. Money has no
intrinsic value, and the only way to save it is for someone else to borrow and
spend it!

Inflation is basically a tax on savings, which is not that bad when you
consider again that money has no value. A low inflation rate then creates
subtle pressure for people to invest money productively (or just spend it) as
they lose out if they just hide it under their mattress. A high inflationary
rate is not good, of course, as you basically can't save at all, while
deflation is also bad because it rewards saving and causes value to evaporate
(since money has no intrinsic value, things produced have to be bought and
used...).

~~~
icelancer
This is a very Keynesian way to look at things that isn't necessarily
absolutely true. There are a lot of times when this ideal of "slight
inflation" is detrimental given the actual output of said policies.

~~~
seanmcdirmid
For example, when? There are very fundamental truths here; e.g. consumption
has to match production with very few exceptions, no matter how much someone
has to save (or can't spend according to what they are earning). You might be
able to save for a rainy day (or retirement), but it is impossible for the
world to do that (instead, they must invest for the future to prepare for that
rainy day).

I'm not sure you could find a single serious economist who would claim "slight
inflation is bad;" i.e. would argue that 2-3% is worse than 0%. Maybe a
libertarian, but there is a good reason we never vote them into power.

~~~
authatheist
You have no idea what you're talking about.

Inflation is a tax on savings, but that's alright because money has no value?!
But if money actually had no value, there would be no use for it.

Consumption "has to" match production?! What's that supppsed to mean? If I
produce something no one wants, people "have to" consume it anyway?

You say inflation is good because it motivates people to invest (because their
money loses value just sitting in a bank), but why wouldn't people want to
invest even if their money was gaining in value? The purchasing power of
whatever money you earn through investments is increased by deflation too, so
the sooner you make a good investment, the better off you'll be.

~~~
seanmcdirmid
Money has no intrinsic value, it only has value based on trust that the money
We receive can be used to purchase other goods. The value of money is set by
the markets (and indirectly by prices, wages, and printing new bills).

If you produce and no one buys, then you stop producing because you are
providing no value; simple. If your production is non perishable, you could
pay rent and upkeep to stockpile it, but value is lost regardless.

People have an incentive not to invest because investing is risky. Many would
just sit on a gold hoard than to risk losing it, but that behavior doesn't
solve any consumption problems (worse, it leads to temporary deflation, since
that gold is taken out of circulation).

This isn't rocket sicence, most of us have college degrees, this is just Econ
101.

~~~
marcosdumay
You've just said that everything produced must be consumed. Now you have a
more realistic model, with stocks. You are still missing waste. Keep improving
it, and you may come into something useful.

You seem to have misunderstood you Econ 101 classes because "supply" isn't the
same thing as "production", "demand" isn't equivalent to "consumption", and
"intrinsic value" is a completely artificial construct.

Also, people save mostly because they want to spend later, invest mostly
because they want to have more money, and consume mostly because they want the
wealth. Inflation and deflation have very complex and often non-intuitive
relations with those three. You can't just extrapolate from Econ 101, not even
after you understand it right.

~~~
seanmcdirmid
I didn't confuse production and consumption with supply and demand, which
anyways determines costs and is not the point. We simply have little capacity
to save production like we can save water in a reservoir. People save because
they want to spend later, sure, but again, that is irrelevant, because
production can't be saved in general someone else must borrow.

Investments require taking on risk and...they actually require skills to do
right (e.g. Doing your homework). So you might want to invest to get rich, but
you might not want to invest because you aren't good at it or do t want to
become poor. It still has to be incentivized, especially when most people just
want comfortable lives.

You seem to have an agenda in introducing more relationshios above this one
simple fact. So make your point rather than just claiming my ignorance,
because no points were argued in your post.

~~~
authatheist
> production can't be saved in general someone else must borrow

What's that supposed to mean?

------
whiddershins
no better read than "Debt, the first 5,000 years" to realize you can't
possibly be cynical enough about the nature of debt.

[http://www.amazon.com/Debt-First-5-000-Years-
ebook/dp/B00513...](http://www.amazon.com/Debt-First-5-000-Years-
ebook/dp/B00513DGIO/)

~~~
sdm
From the Amazon description:

> He also brilliantly demonstrates that the language of the ancient works of
> law and religion (words like “guilt,” “sin,” and “redemption”) derive in
> large part from ancient debates about debt, and shape even our most basic
> ideas of right and wrong.

Did he just rewrite Nietzsche's "Genealogy of Morals"?

------
tedunangst
It was only 100 years ago. Countries are still issuing 100 year bonds today.
[http://www.bloomberg.com/news/2014-03-12/mexico-said-to-
sell...](http://www.bloomberg.com/news/2014-03-12/mexico-said-to-sell-
benchmark-100-year-bond-in-british-pounds.html)

------
chiaro
A quote from an econ professor:

"Economists hate war because it's the equivalent of taking your economy out
the back and shooting it"

------
carsongross
Ah, that's nothing. The brits still haven't paid off the loan some guy named
William III took out in the 1690's.

Shirkers.

~~~
lotsofmangos
The people from the bank do visit, but Liz set the corgis on them last time
while Philip waved a shotgun around and shouted something rather rude, so they
are leaving it another decade or two before they try again.

------
wnevets
>So the solution to this was brokered by the future US vice-president Charles
Dawe, who in 1924 proposed that the US lend money to Germany to fund its
reparation payments to France and the UK, who in turn would use the money to
repay their war debts. The solution was so good that Dawes won the Nobel Peace
Prize the next year in recognition. And the plan worked.

Wow.

------
zw123456
One could argue that the true cost of war can never be repaid.

------
spitfire
I recall a bond from the 1700's in London that isn't being paid off. It had a
structure that made it better to simply pay the interest rather than pay out
the full bond.

Looking it up, I think it was probably a british Consul. A type of perpetual
bond. Which in the case, you have very little reason to redeem it.
[http://en.wikipedia.org/wiki/Consol_(bond)](http://en.wikipedia.org/wiki/Consol_\(bond\))

~~~
walshemj
Until fairly recently before QE the 4% consol was well under par around 70 and
so would have been costly to redeem.

I looked at buying some of the consols for my ISA last month - its one of the
few ways of getting a safe investment that pays more than inflation.

~~~
justincormack
The 4% Consol is the one being redeemed. Not entirely clear why - they could
buy it back cheaper in the market than paying par.

~~~
walshemj
I know I was vaguely looked at the 4% consuls as investment before the crash
they where selling for around 60/70 in 2008

------
michaelchisari
Even worse than that,

[http://en.wikipedia.org/wiki/External_debt_of_Haiti](http://en.wikipedia.org/wiki/External_debt_of_Haiti)

France demanded that Haiti pay the modern equivalent of $21 billion in debt
for the "loss of men and slave colony".

------
Spooky23
Here's an example of 19th century debt in NYC

[http://www.nytimes.com/2009/02/13/nyregion/13jerome.html?pag...](http://www.nytimes.com/2009/02/13/nyregion/13jerome.html?pagewanted=all&_r=0)

------
jmnicolas
Wars would be over sooner if it wasn't for debt.

------
gamechangr
Germany makes it's last World War 1 payment 2010

[http://www.spiegel.de/international/germany/legacy-of-
versai...](http://www.spiegel.de/international/germany/legacy-of-versailles-
germany-closes-book-on-world-war-i-with-final-reparations-
payment-a-720156.html)

------
dba7dba
Had it not been for WWI, most of the globe might still be under colonial
rules.

~~~
PeterisP
Didn't the main release of colonial nations happen after WW2?

Most of Africa, Palestine/Israel, India/Pakistan/Bangladesh, etc.

------
bsitum
wow

