I1L2T3 Posted April 25, 2012 Author Share Posted April 25, 2012 It's "unaffordable" because they couldn't afford to keep the show on the road and repay the money they borrowed, hence widescale defaults. If all the money that had been lent had been repaid as agreed then there would not have been a financial crisis. While the banks have a lot of responsibility for the problem so have the people who borrowed money they could not afford to repay. It is a three way debt crisis and it was good to hear the PM finally acknowledge this at last today instead of just blaming profligate public spending by the last government: - government debt - corporate debt - personal debt Once we acknowledge that we need to deal with all three then we can have a proper plan to move forward. Unfortunately indebted households will have to pay the piper eventually too. And it isn't going to be pretty. Link to comment Share on other sites More sharing options...
Anna B Posted April 25, 2012 Share Posted April 25, 2012 We aren't going to be a third world country, not even little old Sheffield. We still export stuff like steel and bizarrely make more scaples than anyone else, there is still money about. The midlands and the north still churn out massive numbers of cars for global consumption. It's bad yes but third world - no. As for global equality that means you and me taking a massive drop in living standards. The measure of a third world country is the discrepancy between rich and poor, (there's actually a % measure for it, but I can't remember what it is,) and the per capita money that goes into infrastructure and welfare. As the top 1% gets richer, the gap gets bigger. Infrastructure is no longer keeping pace with the rate of degradation, (although the Olympics is skewing the figures momentarily,) and we are now in a position where welfare is being cut and will continue to be cut. We're happily not third world yet, but don't assume it can't happen here. It can. It might look different to the third world images we imagine, think more Rumania than Africa, but third world nontheless. Link to comment Share on other sites More sharing options...
I1L2T3 Posted April 25, 2012 Author Share Posted April 25, 2012 There’s plenty of stuff out there dangled in front of peoples nose, the trick is to ignore them if you can't afford them. Why blame the banks, you may as well blame every business that supplies stuff you can’t afford. The banks are to blame too. For every irresponsible loan there has to be an irresponsible borrower. It's quite wrong not to blame the banks as well. Link to comment Share on other sites More sharing options...
MrSmith Posted April 25, 2012 Share Posted April 25, 2012 The difficulties we are in are the fault of a) the banks, b) succesive governments of both parties over the last 50 years. c) A system which is unsustainable in the long run. Until that is accepted, all this pointless squabbling and name calling will continue, and that is a diversion that both parties seem to be relying on. We best all keep squabbling then untill the other guilty party is prepared to take some responsibility. The banks are to blame too. For every irresponsible loan there has to be an irresponsible borrower. It's quite wrong not to blame the banks as well. I agree. The responsibility for the crisis lies with Governments, banks, businesses and consumers. Link to comment Share on other sites More sharing options...
Anna B Posted April 25, 2012 Share Posted April 25, 2012 It is a three way debt crisis and it was good to hear the PM finally acknowledge this at last today instead of just blaming profligate public spending by the last government: - government debt - corporate debt - personal debt Once we acknowledge that we need to deal with all three then we can have a proper plan to move forward. Unfortunately indebted households will have to pay the piper eventually too. And it isn't going to be pretty. I think he's realised how sick people are of hearing 'we're all in it together,' and 'it was all the fault of the last government' and now his wizard plan has failed and we're in a double dip he's maybe he's realised at last we're not as gullible as we look. Personal debt was largely through mortgage lending. People have to live somewhere. The bank encouraged house prices to inflate by granting ever bigger amounts even when thay knew it was unrepayable. If it wasn't for this irresponsible lending the market would have found it's own sustainable and sensible level. Yes, householders will have to pay, and no it's not going to be pretty. There will be a lot more homeless for a start. Link to comment Share on other sites More sharing options...
MrSmith Posted April 25, 2012 Share Posted April 25, 2012 I think he's realised how sick people are of hearing 'we're all in it together,' and 'it was all the fault of the last government' and now his wizard plan has failed and we're in a double dip he's maybe he's realised at last we're not as gullible as we look. Personal debt was largely through mortgage lending. People have to live somewhere. The bank encouraged house prices to inflate by granting ever bigger amounts even when thay knew it was unrepayable. If it wasn't for this irresponsible lending the market would have found it's own sustainable and sensible level. Yes, householders will have to pay, and no it's not going to be pretty. There will be a lot more homeless for a start. Actually that was Gordon Brown when he took house price growth out of the inflation figures, if he had left them in, the Bank of England would have had grounds to raise interest rates to stop inflation getting out of control, which would have helped to kerb house price growth, it didn’t help the situation allowing so many into the country without building more houses to accommodate them. Link to comment Share on other sites More sharing options...
I1L2T3 Posted April 25, 2012 Author Share Posted April 25, 2012 Actually that was Gordon Brown when he took house price growth out of the inflation figures, if he had left them in, the Bank of England would have had grounds to raise interest rates to stop inflation getting out of control, which would have helped to kerb house price growth, it didn’t help the situation allowing so many into the country without building more houses to accommodate them. House price inflation is a big part of the problems we've got. It encouraged high levels of household debt, speculative buy to let activity, release of equity. People are locked into renting because they can't afford to buy and people who bought locked into negative equity and can't afford to sell. A big proportion of the remainder are struggling financially to such an extent that a return to historical norms for mortgage interest rates, say to to 6-7% is going to finish them off. There is insufficient housing stock and it is very,very difficult for people to easily move to where job opportunities are. It's a total mess. The thing is though where was the opposition to house price inflation from the Tories. They enjoyed the rising property prices as much as anybody and many of the people who benefited most are natural Tory supporters - the baby boomers, the recently retired, people living in prosperous areas of the country. The average Daily Mail reader enjoyed every blummin' minute of that surge in house prices. Link to comment Share on other sites More sharing options...
MrSmith Posted April 25, 2012 Share Posted April 25, 2012 House price inflation is a big part of the problems we've got. It encouraged high levels of household debt, speculative buy to let activity, release of equity. People are locked into renting because they can't afford to buy and people who bought locked into negative equity and can't afford to sell. A big proportion of the remainder are struggling financially to such an extent that a return to historical norms for mortgage interest rates, say to to 6-7% is going to finish them off. There is insufficient housing stock and it is very,very difficult for people to easily move to where job opportunities are. It's a total mess. The thing is though where was the opposition to house price inflation from the Tories. They enjoyed the rising property prices as much as anybody and many of the people who benefited most are natural Tory supporters - the baby boomers, the recently retired, people living in prosperous areas of the country. The average Daily Mail reader enjoyed every blummin' minute of that surge in house prices. I would imagine people from all political persuasions took advantage of the houseing bubble, some probably now even blame the banks instead of their own greed. Link to comment Share on other sites More sharing options...
green Posted April 25, 2012 Share Posted April 25, 2012 http://www.theatlantic.com/business/archive/2012/04/austeritys-greatest-failure/256340/ Some neat charts & commentary on our austerity. This government needs a new plan. Link to comment Share on other sites More sharing options...
I1L2T3 Posted April 25, 2012 Author Share Posted April 25, 2012 I would imagine people from all political persuasions took advantage of the houseing bubble, some probably now even blame the banks instead of their own greed. I know people who took out stupidly massive mortgages now see themselves as victims. Quite wrongly. Mumsnet for example is full of people posting about how much in the poo they are and how it's the fault of everybody but themselves. The Tories loved it at the time. Few complaints. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.