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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To think another great Depression is coming?

326 replies

littleblackdress04 · 03/04/2020 17:42

Spoke to a surveyor friend yesterday - he said they can’t value houses at the moment as they think they could lose up to 50% of their value. Also read an article about how another Great Depression is coming.

Is it the re-set we need as a world? The end of billionaires when millions have no food? What will the societal impact be?

I personally hope it’s a fairer, kinder society where everyone gets their basic needs met

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Strawberrypancakes · 03/04/2020 18:42

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Message withdrawn at poster's request.

littleblackdress04 · 03/04/2020 18:43

@Strawberrypancakes as I have already said, yes I am a homeowner 🙄

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Grasspigeons · 03/04/2020 18:44

I hope the more optimistic are right. Its hard to feel positive when you see your self employed family members struggling so much. I also feel that my family only just got back on our feet after that whole 2008 thing. Its also hard when austerity has affected you as a family. That tax bill is big.
I know very little abount economics though so hope my worries are unfounded.

PicsInRed · 03/04/2020 18:44

Why post this doomsday twaddle, who does it help?

Noone said anything about doomsday, lovely.

This is a discussion forum and the present state of the economy is the question.

Presently, that economy has been put in a cryogenic freeze. The problem is that this has never before been done and there is no established defrost manual.

Just have a think about how many times a single £ circulates in the economy in a year, from road worker, to corner shop, to electrician, to auto mechanic, to cleaner, to clothes shop, to hairdresser's, to vegetable shop etc etc as it gets exchanged, spent, around the local economy, and how many times the government is able to take, take and retake a cut of that circulation, each spend, in tax.

That £ now sits in an isolating person's pocket. That tax, tax and retax isn't happening. That repeated taxing as the cash circulates is how we directly fund and indirectly raise money in the international markets to fund the NHS, police, roads etc.

That's why this is bigger than the virus.

Pishposhpashy · 03/04/2020 18:45

Come on then peaceanddove - teach us.

PicsInRed · 03/04/2020 18:45

That and our economy being entirely predicated on eternal inflation and this situation being potentially deflationary.

boringrobot · 03/04/2020 18:45

Absolutely. No good can come from a 50% drop.

Rubbish. Loads of people are mortgage free and have seen their houses go up in price over the past 30 years, so they won't be losing anything that they've actually paid for just some unearned, untaxed gains.

A house price would be absolutely brilliant for millions of people who are currently paying huge rents or mortgages, ie. most of the younger generation. It will just be a rebalancing of the status quo towards the younger working generation and about time too!

Mawbags · 03/04/2020 18:46

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Poetryinaction · 03/04/2020 18:46

People are able and want to work and spend. It's just halted.

AgeLikeWine · 03/04/2020 18:47

A substantial correction in asset prices, including equities & residential property was long overdue, but this crisis is going to result in thousands of otherwise viable businesses going bust and surging unemployment. Whatever the next few weeks & months bring, it will be a long slow haul back to an economy which looks anything like the one which existed at the start of last month.

And that’s before we start factoring in a no-deal Brexit....

littleblackdress04 · 03/04/2020 18:47

@Mawbags have I said that? I have a mortgage and kids myself. My point is that the economy is in big trouble 🙄

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Pishposhpashy · 03/04/2020 18:47

A house price would be absolutely brilliant for millions of people who are currently paying huge rents or mortgages, ie. most of the younger generation

Um no, if people are paying huge mortgages and there is a 50% crash, they will be trapped in negative equity.

JustInCaseCakeHappens · 03/04/2020 18:48

A house price would be absolutely brilliant for millions of people who are currently paying huge rents or mortgages

ahem.. sorry to break it to you, but your house losing value won't change the amount of existing mortgage you are paying.

And thinking you will be able to get a mortgage at all during a depression is even more naive.

sleepwhenidie · 03/04/2020 18:49

I was about to say the same pishposh - just because the value of a house crashes, doesn’t mean your mortgage (or rent) adjusts correspondingly! Confused

Beachtowel23 · 03/04/2020 18:49

peaceanddove what do you think will happen? I genuinely don’t know how things work and I’m trying to remain positive x

AmelieTaylor · 03/04/2020 18:49

To be perfectly frank, I’m going to worry about the future when it’s here, if I’m alive to worry about it.

Worrying about it now won’t change it. Worrying about family/friends/myself dying wont change it either, but I can’t seem to switch that off.

Que sera sera re the economy, but what will help is people trying to keep a positive attitude to the rebuilding of the economy, that an unrealistic one, but a positive one.

MissConductUS · 03/04/2020 19:00

As always, The Economist can be counted on for an intelligent discussion of the issues:

www.economist.com/leaders/2020/04/01/covid-19-presents-stark-choices-between-life-death-and-the-economy

The great depression was triggered by a collapse of the banking system. That's unlikely to impossible now. The long run economic impact will be determined by how quickly effective treatments and a vaccine can be made available.

The closest parallel is the Spanish Flu pandemic in 1918/1919, for which there were no pharmaceutical interventions. The impact was significant, affecting both supply and demand, but not generational like the great depression.

www.weforum.org/agenda/2020/04/pandemic-economy-lessons-1918-flu/

chomalungma · 03/04/2020 19:08

Many people are in debt,

Many people have over extended credit or hire rather than buy - look at cars and PCP

A lot of people have insecure jobs and zero hours contracts

This will change people - they will not spend money they don't have or don't need to spend. That's bad news for a service based economy

Doobigetta · 03/04/2020 19:12

Imagine what a one-off emergency tax on all assets over £1bn could do to help. And they’d still be richer than everyone else put together.

littleblackdress04 · 03/04/2020 19:15

Debenhams is about to go into administration too- it’s like a house of cards. I think my original point is that things will need to change as a society as everything is changing at the moment and we won’t be the same country after this

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Aldidl · 03/04/2020 19:17

The current situation has, for me, shone a real light on both how deep inequalities are AND the ignorance there is towards those inequalities. I cant see the gap shrinking.
Those with the luxury of staying home - and it is a luxury - will blame the spread of disease on those without such luxury.

JassyRadlett · 03/04/2020 19:27

Anyone who claims to knows what the economy is going to do is talking bollocks.

There are no lessons from previous recessions for this, because we are not facing a recession caused by lack of confidence, problems in financial markets or other economic fundamentals. We have never seen a situation where the global economy has been put into voluntary hibernation before. We have also never previously seen the investment to support the hibernating economy and try to ensure a degree of confidence and consumption after the pandemic.

No one knows what will happen next. There is no precedent, so there is no value in citing previous downturns.

Pishposhpashy · 03/04/2020 19:31

Debenhams has been on the brink for ages now.

Ethelfleda · 03/04/2020 19:32

What Jassy said

Ethelfleda · 03/04/2020 19:32

And again Pish - I was going to say that!