UK goes from footloose to frugal

Harry_Powell

mbga9pgf wrote: »

Such as? Want to give an example there partner? I am personally waiting for the BR wave of 2010 before I get in.

I read somewhere that a lot of BR peeps can stay in their properties, especially if they have neg equ. They can also stay put if they can find someone to 'purchase' their equity (i.e. family or friend) if they are not in neg. Equ.

Given the above, and the fact that the government is pulling out all the stops, via the benefit system, to keep people in their homes. Where is the wave going to come from?

Harry_Powell

inspector_monkfish wrote: »

so are you planning to buy a house here - live in it for less than 10 years - and then emmigrate ?

Indeed, why wait 10 years? Why not go now, certainly with the economy as it is (and will be for the forseeable future), what's the point of delaying?

Do you always plan 10 years in advance? I don't know what I'm doing two days in advance!!

Pobby

Saving. Well all depends. Have always tried to save even as a kiddie. From my twenties, always put something into pensions regardless, and the same goes for my wife but there have been periods when saving was just not possible. Not on a brilliant joint income during the downturn but attempt to put aside 30% plus per annum.

Not so good if things go badly, not even jsa. I really wonder what this lot think they are up to. Mixed messages doesn`t come into. We must be prudent and save, oh no, we mean spend and borrow, oh no, we meant save...............................................................................................................................................................................

Arcaine

CLAPTON wrote: »

be careful what you wish for

try googling 'the paradox of thift'

basically it says
-if everyone decides to increase their saving
-then that means that everyone reduces their spending
-reduced spending mean that shops, pubs, eating places etc etc will experience reduced trade
-when trade is reduced then companies start laying people off
-these redundant people obviously can't increase their savings as they intended ..in fact the exact opposite
-these people who have been laid off will stop/deduce spending in shops/pubs etc and so will lead to a new wave of redundancies
-these new redundancies will obviously not be able to increase saving as intended etc etc and the cycle continues

net effect is that overall there is LESS savings in the nation but massively more unemployed people

so when you read that you can't borrow your way out of debt... that may well be true for an individual person or company but if the nation tries it then the effects will be quite the opposite ... which is why the governments of all the major nations are NOT reducing their spending (unlike the 1920/30s ) because they know this will mean massive increases in unemployment. (ps. the Conservatives know this too which is why they are very vague about their spending/borrowing plans.. remember the difference between aspiration and committed policy)

I hate to say it but this is complete Keynsian nonsense. If a recession has been caused by too much debt and loose lending standards, then how can the answer be MORE lending and MORE debt. Who too and what for? More roads? More Shopping Centres? More Hospitals? More regeneration? All of which only produce jobs for a limited period and in the long run you just push up tax rates to pay for it all making the country less competitive.
The answer is the Government has got to get its house in order, produce a balanced budget, and start promoting a Britian that is attractive to business and new investment to kick-start job creation.

Radiantsoul

Arcaine wrote: »

I hate to say it but this is complete Keynsian nonsense. If a recession has been caused by too much debt and loose lending standards, then how can the answer be MORE lending and MORE debt. Who too and what for? More roads? More Shopping Centres? More Hospitals? More regeneration? All of which only produce jobs for a limited period and in the long run you just push up tax rates to pay for it all making the country less competitive.
The answer is the Government has got to get its house in order, produce a balanced budget, and start promoting a Britian that is attractive to business and new investment to kick-start job creation.

The reason is too much a fall in spending will discourage investment. Firms will only invest if they have a prospect of selling the items they might produce.

Equally too much debt is unstaintable. What we need is a path that plots a middle path towards higher growth and spending without unstainable debt.

The government is currently spender of last resort and it is interesting how that position will unwind, but the issues of reducing private and public sector borrowing are different issues.

CLAPTON

Arcaine wrote: »

I hate to say it but this is complete Keynsian nonsense. If a recession has been caused by too much debt and loose lending standards, then how can the answer be MORE lending and MORE debt. Who too and what for? More roads? More Shopping Centres? More Hospitals? More regeneration? All of which only produce jobs for a limited period and in the long run you just push up tax rates to pay for it all making the country less competitive.
The answer is the Government has got to get its house in order, produce a balanced budget, and start promoting a Britian that is attractive to business and new investment to kick-start job creation.

the solution you suggested was indeed tried during the 1920 and 30s and wasn't a success.
as a long term goal it may well have great merit but if tried in the middle of a recession then it would result in massive unemployment and probably much social unrest.

why would a country with massive unemployment and no money to spend be attractive to business? why would a business invest in country where no-one would afford to buy it's products?

Conrad

Many more people now are paying down thier mortgages whilst interest payments remain so low.

tomterm8

I think people should not draw too many conclusions from the 1920's/1930's... we have an entirely different monetary system. The fact is, recent experience in latvia, Ireland etc have shown that attempts in the short term to cut public spending have been rather futile, just causing much higher unemployment and a much worse recession. Which leads to higher debt....

Over the middle term, the right answer is to repay debt as the economy goes into recovery. This involves spending cuts. But we should not cut too soon.

Thrugelmir

tomterm8 wrote: »

I think people should not draw too many conclusions from the 1920's/1930's... we have an entirely different monetary system. The fact is, recent experience in latvia, Ireland etc have shown that attempts in the short term to cut public spending have been rather futile, just causing much higher unemployment and a much worse recession. Which leads to higher debt....

Over the middle term, the right answer is to repay debt as the economy goes into recovery. This involves spending cuts. But we should not cut too soon.

Agreed. Particularly as the repercussions of the First World War were still felt in the 20's. (And led to Facism in the early 30's and ultimately WW2).

We now have Corporate globalisation, freedom of capital movement, foreign ownership and investment.

What ever money is spent needs to be productive and as far as possible wealth creating.

Ireland engineered its own downfall with unsustainable economic policy.

Thrugelmir

Conrad wrote: »

Many more people now are paying down thier mortgages whilst interest payments remain so low.

Those with a comfortable income yes. For many I doubt mortgage repayment is the first priority.