Friday, Jun 15, 2007
A nation dependent on debt
thisismoney.co.uk: From frugality to £34,000 debt
But everything changed when I started university. Teachers, careers advisers and the Government started telling me debt was nothing to worry about, that it was simply an 'investment'. To cope with my uneasiness, I told myself it wasn't 'real money' and tried to forget about the future when it would need to be repaid. Right now I owe, in total, £34,000 - yet I don't feel anxious. Primarily, that's because it seems normal: almost everyone around me is in a similar situation and taking credit was a conscious choice.
Posted by uncle chris @ 10:50 AM (170 views) Add Comment
17 Comments
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1. tyrellcorporation said...
Silly moo! Trouble is I'm helping to finance her lifestyle by porr interest rates on my savings accounts and bank charges - oh and she'll probably opt for an IVA real soon.
2. Scott said...
And what does the idiot have to show for it? They sure fleeced this moron didn't they.
3. No Room At The Inn said...
I went to school with this girl, she was quite bright. Shame she thinks it is ok to be 34,000 in debt.
4. sovietuk said...
Oh dear oh dear, this is little short of an epidemic. But at least she seems to be having a good time. More worrying is whether all major high street banks can cope with the level of bad debt that will spiral out of control. Be very careful where your savings are, history is littered with examples of sensible people loosing their savings to over exposed banks.
5. Ticktock said...
Tyrell,
When this girl took the loan, whose bank account balance was reduced as a result? The answer.... nobody's?
Pondor how that works.
6. Bloody Annoyed said...
Does anyone know if there is any information out there regarding which are the banks are least exposed to bad debt. I don't particularly want to find one day that my savings have disappeared because some dizzy cow has spent 34K buying dresses and pissing her money up the wall with a bunch of brain dead toffs.
7. Orwell said...
Agreed...
But I want that IPOD... I want I want I want ....
I am going to stamp my feet and wet myself if I don't get it..
Mmmmmmmmmmm my 3 year old niece comes to mind....
8. Happyrenterabroad said...
She's probably on the phone to mum and dad saying , "Look, I'll be able to pay you guys back real soon - see how I'm making a fantastic career for myself in journalism here at the Evening Standard by writing about what an irresponsible example I am to the youth of today!"
9. cyril said...
I have some sympathy with this person. If you've got a little bit of money in the bank it makes you very careful with your money. But once you go into the red you just think what the hell. And if everyone else is doing it, it seems quite normal.
I expect there are plenty of people in the UK who are careful with their money, but as tyrell says, we'll all have to pay for it.
10. japanese uncle said...
I ate only basic unbranded food, sandwiches made out of 19p loaves of bread with 39p 'mixed fruit' jam, dried pasta with only butter, porridge, and never any meat. I walked everywhere as I couldn't afford the bus fare; waited at King's Cross on Sundays for incoming trains so I could collect used newspapers to read; my shoes had visible holes and I was grateful for second-hand, misfitting clothes from my friends.
--------------------------------
Soon this will be lifestyle of the vast majority of the nation.
11. wage slave said...
The irony is that when it all does go belly up, the ones that have restrained themselves from indulging in this orgy of cheap credit will be just as likely to be sh@fted as the ones who have.
12. wage slave said...
Sorry should say haven't.
The irony is that when it all does go belly up, the ones that have restrained themselves from indulging in this orgy of cheap credit will be just as likely to be sh@fted as the ones who haven't.
13. enuii said...
This was all the grand plan of Teflon Tony & Grabbin Gordon, get the average kids to got to university on mediocre courses as well as the 5% who were truly university material and get them to pay for the privilege themselves. Net result 5+ years of self funded debt instead of claiming unemployment benefit or being on a course at the governments or employers expense. These two self serving charlatans have literally screwed the financial life out of the UK's average kids net result first time buyers in their thirties, geriatric mothers and a generation (in denial) who cannot afford to pay enough into their pension schemes.
14. The Capitalist said...
Recessions are caused by thrift - known as the 'paradox of thrift' by economists - until people kick the credit habit things will just keep on rolling on..of course when they do kick the habit we are all condemned to cold turkey!!
15. little professor said...
Japanese uncle - I salute you, sir!
16. Chilli said...
I have this theory that follows this example: Take 500 people who buy a limited source of goods within their means. Now offer one of them cheap credit and say 'Buy! Everything you see is yours'. Next thing, the sellers realise they can make more money by raising prices but not increasing supply (there is still the same amount of demand, so no increase in supply). So the guy who borrows spends more on slightly more goods. The rest, unfortunately, have to do with less, unless.... their friendly neighbourhood banker lends them some money. Pretty soon, all these people are buying the same goods they used to at inflated prices. The retailers are getting rich. The banks are getting rich. And the rest of the 500 are not.
This is what is happening in society today. If no-one lent money, we would still be buying the same amount of goods. Reason: China etc need a market for those t-shirts. We would pay less for them in numerical terms, but in actual buying power, the same amount.
Laura isn't really to blame, therefore. Any robust economy does not depend on the good intentions of every single individual. The problem here is easy credit.
Think about it this way; would Laura have the friends and the life she is entitled to if she didn't borrow money to mantain her social habits? No!!!!
Society has been manipulated into a state were we have to borrow to maintain the same lifestyle we have always had, the same friends, the same toys, accommodation etc. The only way to not be affected by this is to be a hermit.
17. Marks said...
Isn't this just another clever 'off balance sheet' form of government spending?
Rather than fund student fees and grants through public expenditure (as has been the case for several decades), Gordon Brown has successfully got it off the balance sheet (like PFI) but has really just pushed another tranche of public spending into the distance. Either the student borrowers end up paying large chunks of earnings back (deferred taxation) or they default on the loans and the private sector has to pick up the tab (now that the student loans company has been privatised).
Either way, 'prudence' is not the name for this sleight of hand.