We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Flatlining GDP is Our Fault
Comments
-
GeorgeHowell wrote: »The answer is that you can't have it all ways. If consumers save instead of spending, for whatever reason, at a time of slump, then it will prolong the slump. If they do not see fit to blame themselves, then it's no good trying to blame anyone else either. If even half the additional 5% a year being saved over the immediate pre-crunch period was put back into spending it would make a huge difference.
Business confidence is in large part a reaction to consumer confidence. In large part the one will drive the other.
I'll simplify the savings game here and split it three ways...
No 1 ..the bottom third don't and never save...
No 2...the middle third have 5 grand.
No 3...the real savers.
Now how are we going to get No 3 the real savers to spend tens of thousands each....and soon we'll be back to historic low savings ratios.
Have a look at the chart below...its dramatic...up from 1950 and down from 1980....now whats caused that.
I'll have a guess it was industry in decline in the UK due to global events...so from 1980 policy has been to encourage the public to be spenders...the credit boom...
Now that doesn't seem to fit in with thrift that I often here from some our great leaders in that period..;)
0 -
grizzly1911 wrote: »It is what you do.
I never said It did.
.
What you appear to be doing is playing the man and not the ball, a familiar internet tactic when arguments are being lost.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
I'll simplify the savings game here and split it three ways...
No 1 ..the bottom third don't and never save...
No 2...the middle third have 5 grand.
No 3...the real savers.
Now how are we going to get No 3 the real savers to spend tens of thousands each....and soon we'll be back to historic low savings ratios.
Have a look at the chart below...its dramatic...up from 1950 and down from 1980....now whats caused that.
I'll have a guess it was industry in decline in the UK due to global events...so from 1980 policy has been to encourage the public to be spenders...the credit boom...
Now that doesn't seem to fit in with thrift that I often here from some our great leaders in that period..;)
I agree. The encouragement of thrift really meant just "Please don't sponge off the state". We had got used to a higher ratio of spend to income. When that suddenly changed the disruptive effect is what we are seeing now -- annual growth coming to a halt while everything re-adjusts. It's not a disaster, but it's economic cold turkey, albeit from nicotine not heroin. The doom and gloom is a self-fulfilling effect of the risk-averse financial approach of consumers.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »What you appear to be doing is playing the man and not the ball, a familiar internet tactic when arguments are being lost.
Football isn't my game, stop diving."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Why spend here when there is nothing much people want?
Maybe they have realised that last year's iPad still works, and that the 50in plasma isn't that much smaller than the current 55in telly in the shops.
If I consider members of my family they have been spending; just not here in Blighty. If my experiences of Canada are anything to go by, plenty of Brits are still spending abroad.0 -
grizzly1911 wrote: »Football isn't my game, stop diving.
The advantage here is that there a constantly available video replay facility.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
Why spend here when there is nothing much people want?
Maybe they have realised that last year's iPad still works, and that the 50in plasma isn't that much smaller than the current 55in telly in the shops.
That is undoubtedly part of the issue -- people cutting back on waste and unncecessary profligacy. That's why the obsession with GDP is so facile. If people cut back for example on latest model iPads, alcohol, fast food, gambling, fashion clothing, and air travel, is a -0.3% on GDP really a bad thing ? Or might it actually be favourable in terms of health, conservation of resources, and the environment ?No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
Anecdote isn't data.
What the data show is that people are not saving excessively, they are saving at rates just below what it is reasonable to consider normal.
I realise that this theory doesn't fit your economic catastrophe model but it does fit the data.
And yes, I do know people in that position. Most of them are working hard to get into a better position as I did when I was.
I do not have a economic catastrope model. Its not anecdote that those that have money are choosing to save rather than spend. Why do you think they are doing this. What you call anecdote on my part is a plausible reason why people are not spending. Why do you think they are saving?
Whatever the reason however, if someone chooses to save for a mortgage rather than buy a new car or chooses to stay at home rather than go to a restaurant what can you or I do about it?
As I said, I am lucky and I can continue to spend. I spend as much in real terms now as I did 10 years ago. But my personal spending will not achieve George's goal unless peiople believe that they have more security of employment or prospects for their businesses. If interest rates of 0.5% will not persuade people to spend when inflation is higher, how do you think people can be persuaded?Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
GeorgeHowell wrote: »That is undoubtedly part of the issue -- people cutting back on waste and unncecessary profligacy. That's why the obsession with GDP is so facile. If people cut back for example on latest model iPads, alcohol, fast food, gambling, fashion clothing, and air travel, is a -0.3% on GDP really a bad thing ? Or might it actually be favourable in terms of health, conservation of resources, and the environment ?
A sustainable future is not necessarily an impoverished one.
A car made to last 10 or 15 years generates a tremendous amount of ongoing service and repair business.
The cash for clunkers scrappage scheme took many serviceable vehicles off the road. Their replacements took a lot of energy to produce.
I think the consumerist society was a corporate vision.0 -
GeorgeHowell wrote: »I agree. The encouragement of thrift really meant just "Please don't sponge off the state". We had got used to a higher ratio of spend to income. When that suddenly changed the disruptive effect is what we are seeing now -- annual growth coming to a halt while everything re-adjusts. It's not a disaster, but it's economic cold turkey, albeit from nicotine not heroin. The doom and gloom is a self-fulfilling effect of the risk-averse financial approach of consumers.
I agree, but what can individuals do about this? Government cannot do everything either. But while this one has done some good in discouraging a benefits dependency, it is providing no leadership to encourage business or consumers to spend and created a culture of fear and uncertainty that will eventually be counter productive. Blaming consumers is pointless.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.3K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.3K Work, Benefits & Business
- 601.1K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards