Why the government is lying

[OhBuggerandArse]

Good blog post by Johann Hari here, on the myth that the cuts are needed because of our debt.

Here's a taster, but it's worth reading the lot, it's not long:

Let?s start with a fact that should be on billboards across the land. As a proportion of GDP, Britain?s national debt has been higher than it is now for 200 of the past 250 years. Read that sentence again. Check it on any graph by any historian. Since 1750, there have only been two brief 30-year periods when our debt has been lower than it is now. If we are ?bust? today, as George Osborne has claimed, then we have almost always been bust. We were bust when we pioneered the Industrial Revolution. We were bust when we ruled a quarter of the world. We were bust when we beat the Nazis. We were bust when we built the NHS. Or is it George Osborne?s economics that are bust?

WinkyWinkola in this case can you please explain, how the bank's greed got them and the country in this mess, when others are innocent of any wrongdoing? Because I really have trouble understanding it.

In many cases, the public have had to take out loans and rely on credit to keep up their standard of living - in some cases this means keeping a roof over their head.

If this is the sort of 'blame' you want to accord to the public, go ahead. You should realise, though, that the fact that they needed to do this shows a problem with the way the economy is heading.

As noted previously, the standard of living for the past 20 or 30 years or so has increased steadily, while wages have stagnated. People are feeling more and more squeezed.

The middle-class (middle-earners) are under attack, and the gap between the rich and the poor is higher than it ever has been in the past.

The general public will have to just suck it up.

Or revolt, and claim back some of their wealth which has been appropriated by the rich.

Tosca, Joe Thepublic is also to blame because he was going out of his way to borrow when his capacity to repay was not sufficient. Consumer credit is not "roof over their head" for which there is a whole array of different benefits. It is "equity release" and unsecured loans to buy things he fancied to keep up with the Jones'.

Sure, Bemybebe, Joe Public has behaved irresponsibly by the enormous levels of personal debt.

But if you were a bank/credit card company, wouldn't you ensure that you didn't give 120% mortgages or credit cards willy nilly? Or at least ensure that your customers were able to pay it back regardless. Because that's what was happening. You have to question the professionalism as well.

Tosca, Joe Thepublic is also to blame because he was going out of his way to borrow when his capacity to repay was not sufficient. Consumer credit is not "roof over their head" for which there is a whole array of different benefits.

Firstly, how do you know people didn't take out loans and credit to pay the household bills?

Secondly, there is nothing wrong with wanting to maintain your standard of living. If there wasn't concerted class warfare on the part of the rich, people could afford all these things they desire without having to rely on credit.

As I said before, wages have remained stagnant (in real terms) for the past two or three decades, while the cost of living has soured. Capitalists have wanted their cake and eat it too: they want to push down wages and workers rights as much as possible, while at the same time maintaining consumer spending to keep the economy going and keep profit rates up. Unfortunately, they achieved this through throwing credit at consumers.

Now the whole house of cards has fallen down. Nobody has any money to spend, and banks have lent out money which they don't even have themselves and will never get in return. The whole economy is screwed.

I think it's a bit disingenuous to blame consumers on this, who, after all, were simply trying to stay afloat.

A lot of consumers (not all) should accept some of the responsibility too.

For every bank who stupidly lent 120% mortgages, their was a stupid idiot who thought it was a good idea to borrow it!

Remember back in the days when credit cards where being issued like free toys in a cereal box? It wasn't uncommon for people to have 3 or more cards. Run out of credit on one? Just get another! And don't forget store cards too.

How many people watched shit programs like Locationx3, Property Ladder and other such crap then thought they too could buy a property, throw a lick of paint around then sell at a vastly inflated price. Many did it too....whilst the good times rolled.

Later, how many programs like Spendaholics, Bank of Mum & Dad were on TV as more & more people started struggling?

And of course it's not just consumers. Banks also lent to businesses, many of whom over-extended themselves because hey.....no more boom & bust. It must be true, Gordon Brown said it. So we can borrow large sums and "invest" it.

It's easy to blame the banks. But for every loan they made, there's someone who took the money. I'm not saying the banks are blameless but they didn't create this mess alone.

ttosca

If this is the sort of 'blame' you want to accord to the public, go ahead. You should realise, though, that the fact that they needed to do this shows a problem with the way the economy is heading.

Sorry but some did not "need" to do this a friend borrowed £27k against the equity in her house, both she and her partner were in full time work now she has had notification of possible redundancy and he is no longer getting overtime and they will struggle. What did they borrow the money for? a BMW convertible.

Sorry for my spelling earlier, I am very bad when I am in a hurry.

Tosca, 'the cost of living has soared' because it was fueled by consumer boom in the West, later pushed up BRIC economies, who created their own mini-booms. It is a vicious circle which was going to end up in tears. Economists were talking about it as far as 2002.

Rather than lushing at banks for binging at the 'consumer boom' table just like everyone else, we all should settle down, take a deep breath and a long look at the economy and ... do the right thing and cut the DEFICIT (not debt, deficit). Such a massive deficit will kill us unless we do something about it pronto. Or we can fill the gap in the following sequence Greece, Ireland, Portugal, ... Spain (?), Italy (?). It is all our choice.

What i am trying to say here is not that the banks are blameless, but that isolating banks and pinning all the blame on them prevents us from looking objectively at the situation and making sure that we navigate out of the recession as soon as possible and put all the possible mechanisms to prevent the same happening again.

Shouting "bad bad banks" on Question Time may make some people feel better about their situation, but it is not going to help them going forward.

bemybebe

Dont altogether agree, sure there was "binging" all round BUT the biggest bingers of all were the greedy shits bankers.;

The same bankers who are STILL binging with their disgusting greedy snouts well into the trough.

The same bankers who seem to be almost the only ones riding out the economic collapse that they were mostly responsible for.

The same bankers demanding their taxes are not increased.

The same bankers who dont want their bonuses cut.

The same bankers who think cuts in public spending is a good idea as the country cannot afford not to.

It's like being mugged and the mugger being rewarded and the victim arrested and jailed.

Dont fucking tell me we were all to blame and dont fucking tell me we are all in this together.

newwave-

I'm sorry to hear about your friend, but you can't generalise from a sample of one. The fact is, people are actually poorer, in real terms, than they were two decades ago. Many, even if not all, people took on credit in order to maintain the same standard of living or simply to pay the bills.

RE: Banks

Agree entirely, newwave.

Bemy-

Shouting "bad bad banks" on Question Time may make some people feel better about their situation, but it is not going to help them going forward.

It will help them. Their anger is righteous and just. They can and should use that anger to demand that the people who got us in to this mess (primarily the financial sector which caused the crisis, bailouts, and recession), need to pay for and clean up their own mess - not the public.

"For every bank who stupidly lent 120% mortgages, their was a stupid idiot who thought it was a good idea to borrow it!"

But the banks are the money professionals! Or so they claimed. It in their interest to make sure they get their return and more, right? That is why they are in business. So, for them to distribute such mortgages etc is lunacy on their part.

Look, the banks are to blame for a very large proportion of the mess. No bones about it.

"Such a massive deficit will kill us unless we do something about it pronto."

And making such cuts, reducing everybody's (including the prudent) disposable income, generating enormous unemployment etc etc is going to spiral us into not recession but depression.

Dont fucking tell me we were all to blame and dont fucking tell me we are all in this together.

i dont "fucking" tell you anything. you make no sense, just shouting slogans.

But that's exactly what this government is doing. Shouting slogans. All in this together. The mess the last government (and every government in the west) left. It's little wonder people are fuming. Is it?

Like Mervyn King, I do wonder why people aren't appearing to be angrier. It is a total p*ss take imo.