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Sovereign Debt

posted by Stephen Lubben

From the the second volumn of J.F. Molloy, Court Life Below Stairs (rev ed. 1885), regarding events after the death of George III's spouse, Queen Charlotte:

















A 5% recovery is pretty bad, even by modern Greek standards, but maybe that's where things are headed. Of course, maybe the proper point of comparison is actually personal bankruptcy. But note the numbers -- £1,000 in 1818 (the year the Queen died) would be worth about £70,000 today; about £85,000 if we count from 1827, the date of the Duke of York's death. So the Duke's debts were ... large. Much larger that most personal bankruptcies today for sure.


Larger but not that much larger. In the 2007 CBP data, the median U.S. bankruptcy filer had $87,261 in total debts. Inflation adjusting to 2012 and using the current exchange rate, that would be £61,500.

I object, as a fan of Jane Austen and the Regency Period, the inflation comparisons are numerically sound but economically questionable because they do not take the wealth gap into account.

For example, based on cost of living £70,000 in 1815 is equal to about £4,040,000 today. Using the value of labor £70,000 then comes out to £47 million today. As a share of GDP it comes to a staggering £202 million today. That's why it was a national scandal.

That's why Mr. Darcy's annual income of £10,000 was astronomical at the time and delighted Ms. Bennett so much. By comparison, a good lawyer earned between £500 - £1,000 per year.

Source www.measuringworth.com

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