Author Topic: Mustachian nation?  (Read 1317 times)

Albert

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Mustachian nation?
« on: September 15, 2013, 10:57:09 AM »
http://www.bbc.co.uk/news/world-europe-24049876

Instead of frittering it all away by, for example, subsidising fuel today like in so many oil rich countries Norway is saving most of it for rainy days. I bet Norwegians would be able to list some downsides to the strategy, but I salute their long term vision.

sisca

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Re: Mustachian nation?
« Reply #1 on: September 15, 2013, 11:08:46 AM »
Well, as a norwegian I am not so convinced. Sure, the government saves quite a lot, but that is because revenues are so immense it is hard to spend it all. If they had tried, the economy would quickly overheat, pushing up wages and inflation. There are a lot of signs this is already happening, and have for a long time.

Norway still has favourable demographics, with fairly few young people, few old people, and a huge working age population. Such a nation should be running huge surpluses, even without oil. It is not. It is running a 10 % deficit, exluding oil. There is nothing mustachian about Norway, income has simply risen faster than governments imagination on how to spend it all.

The people have mortgaged up to levels not seen in many other places. Consumer debt to GDP runs at 230 %, way way higher than what the US wa at before the crash in 2007.
« Last Edit: September 15, 2013, 11:13:22 AM by sisca »