Monday, Mar 29, 2010
Let's have an over 45 tax
BBC News: Did the over-45s ruin life for the rest of us
Baby boomers collectively own close to £500bn of the UK's assets, which is four-fifths of the entire nation's wealth. They've turned into micro banks, loaning sometimes huge sums to their children each year. The majority of boomer wealth comes from the sale of houses. As first time buyers in the early 70s, they would have borrowed three times their annual income to purchase a two-up-two-down for £60,000 in today's money. They're selling them on for £160,000 in 2010. Young adults need to borrow 6.5 times their salary to afford those prices.
Posted by miken @ 06:08 PM (2493 views) Add Comment
55 Comments
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1. chrisa said...
Yet another attempt to deflect the blame away from those really responsible. Yes the over 45s had a hand in this but the cause was the deliberate production of asset bubbles by central banks keeping interest rates too low for too long. Stop trying to blame others and start intergenerational warfare and focus on the true cause - the central banks. The central banks and the private banks and their allies the estate agents are to blame. Taking the UK as an example Brown and the BoE deliberately created the housing bubble economy to compensate for the loss of manufacturing to China and employed the layoffs in the public sector to hide what they were doing. Now that TS has hit the fan will they really allow it all to be exposed or will they cut the public sector or borrow and trash the currency to keep the illusion going? I know what I think.
2. quiet guy said...
This "baby boomers" fixation is becoming ridiculous. It would be surprising if the over 45 did not own most of the wealth in this country, considering that most of them have been working and saving for many years. Yes, they may have benefited from the property market trends but that will hopefully reverse a bit in the next few years :) I hope to reach retirement age with some savings so that I can at least change gear to a more sedentary work life.
3. mr g said...
Now that the Brown Broadcasting Commissariat are seeing a Baby Boomer Conspiracy you can bet that a re-elected Liebour government will do the same and enact legislation against us.
If that sounds silly, it's intended to be and to highlight the stupidity of this post.
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. mr g said...
Thanks Chrisa and Quiet Guy for sensible comments.
Yes, I know that I rise to the bait whenever we get a post like this but the "blame the boomers culture" has gone unchallenged on HPC for too long and I will continue to fight it until certain contributors accept that today's problems are not all down to my generation.
6. cyril said...
divide and rule....
7. i remember the 90`s said...
I`m over 45 own our 3 bed semi but i want prices to drop after all i have children who will want to own one day there can`t be that many over 45 that can afford to buy for their offsprings !!!!!!!!!!!!
8. chrisa said...
@4 AND @5
The title should be 'How a central bank asset bubble conspiracy ruined life for the young and trashed the economy'
And the spinmeisters and propagandists at the Babylonian Broadcasting Corpse dutifully follow their orders to confuse and lie and encourage further divide and rule. Are they really trying to stoke up intergenerational warfare? Someone please cull the BBC and replace it with a service that presents real news and facts rather than political propaganda..
9. alan said...
"Young adults need to borrow 6.5 times their salary to afford those prices".
But prices will drop soon - you don't need to rush out and buy right now! All assets fluctuate in price - they go in cycles or waves.... Houses have hit a peak, soon they will drop - once interest rates rise.
In 2 or 3 years rapid inflation will change the numbers once again....
If you really want to be controversial, why not try forecasting the house price rise/drop by Halliwide this month. I'll go for a drop of -0.3%.
10. Mark Wadsworth said...
Chrisa; "The central banks and the private banks and their allies the estate agents are to blame."
They, along with most people who 'own' a house (whether under or over 45), and bonus bankers, solicitors, BTLers, interior designers, MPs with second homes, NIMBYs etc etc can be collectively referred to as Home-Owner-Ists.
But the largest proportion of the Home-Owner-Ists, by number, are homeowners (not all of whom are Home-Owner-ists, for example I remember the 90s) and NIMBYs.
11. monty032 said...
Since 2003 we have lived in a country where the majority cheerfully admit that they could never afford the house they are living in if they had to buy it now. That's not a sustainable situation in the long term. Baby boomers can't carry on forever selling houses to each other at ever higher prices. Eventually those who didn't own houses over the 1997-2007 period will be in the majority. House prices will fall a long, long way until the majority can afford to buy again. This could take 10-20 years though, as it has in Japan. Governments of all parties will spend vast amounts of taxpayers' money trying to delay the inevitable.
12. mr g said...
@Monty032 " House prices will fall a long, long way until the majority can afford to buy again"
Bring it on!!
@i remember the 90`s "I`m over 45 own our 3 bed semi but i want prices to drop after all i have children who will want to own one day there can`t be that many over 45 that can afford to buy for their offsprings !!!!!!!!!!!!"
My sentiments exactly!!
I belong to the boomer generation and couldn't give a tinker's f*rt about the price of my house, in fact if prices fall I might be able to downsize and get a better house for my brass!! Sorry, that's said tongue in cheek and not meant to cause offence
13. chrisa said...
And who is this poster miken with his 'Lets have an over 45 tax' ? Work for lying s~~ts at Millbank by any chance Miken?
As I keep saying on here Brown and the BoE deliberately created the house price bubble economy to provide the illusion of growth and compensate for the loss of manufacturing jobs to China by employing the layoffs in the public sector. They thus hid the damage that they have ALLOWED to happen to the UK manufacturing base. The UK is a hollowed out shell by DESIGN. Any talk of the UK returning to being a strong manufacturing country is complete b###ocks. China has been deliberately enabled to become the worlds manufacturing power (of trashy goods etc) and soon foremost military power. Central banks in the west acted in concert to enable this and bring down US and UK and others. And yet people blame the over 45!????????
14. paul said...
"They account for 70% of MPs in Parliament, they populate the chairs of company boardrooms, and they head up the majority of the country's civil and cultural institutions."
Well, after ten years of our economic policies being dominated by their property-flipping interests, it's about time they piped up about the real cause of our economic ills.
Sorry mr g and chrisa. The truth hurtz.
15. mr g said...
And to any boomer bashers who might be lurking, I suggest that you read the comments on this article on HPC Forum.
16. mr g said...
@Paul "The truth hurtz"
It doesn't hurt me sunshine, I've a clear conscience.
17. iguana said...
Hmmmm..... interested to see that 'baby-boomers' now include youngsters of 45. As I recall, 1965 was some 20 years after 1945, when demob happy young men and women went 'at it' like rabbits to produce the 'boom' that so many seem to revile.
18. mr g said...
@iguana "'baby-boomers' now include youngsters of 45."
And the reason for that is that many under 45's (the "victim culture" generation) think they can live a celeb lifestyle regardless of their income, can't hack it when things get tough and being victims, have to blame someone else.
19. chrisa said...
@12
Paul I'm not even a boomer. I'm one of the younger generation who saved up and yet for however much I saved prices went up faster putting me further behind. But at least I recognise a blatant piece of political diversion tactics, unlike yourself. Economic policy is the realm of the BoE and Brown, not the boomers. Blame them. Tell the TRUTH.
As an aside how many of the MPs, company chairs, local government etc are Masons? Quite a few I bet. Why not blame the Masons?
20. mr g said...
@Chrisa "And who is this poster miken with his 'Lets have an over 45 tax' ? Work for lying s~~ts at Millbank by any chance Miken"
Its Balls. (Ed) fantasising about who he can tax when he's Chancellor.
21. Paranoia Blue said...
I’m so fed up re: boomer-bashing.
I’m one of the many of that generation who seeped blood sweat and tears, to bring in the North Sea oil.
Peruse “Facebook” for the contemporary generation’s content, contribution, and consideration….
As we noted in the 1980’s the “real guys” KICK ass. Take care, I worry for the many!
22. chrisa said...
@18
I'm fairly sure that this site along with many others has been infiltrated by fake posters working on behalf of the criminally insane at Millbank etc. I wouldn't expect otherwise. Actually insane is wrong. As is incompetence. Corrupt and evil fit better probably.
23. paranoia blue said...
I’m so fed up re: boomer-bashing. I’m one of the many of that generation who seeped blood sweat and tears, to bring in the North Sea oil.
Peruse “Facebook” for the contemporary generation’s content, contribution, and consideration….
As we noted in the 1980’s the “real guys” KICK ass. Take care, I worry for the many!
[sorry for 2X post - its thats old password!!]
24. mr g said...
PB@20
Agree entirely with your comments.
Whilst I didn't work in the oil industry, I did work in manufacturing for firms that contributed to the wealth of this country by exporting our products unlike today's service and meja led economy.
25. hpwatcher said...
@11. chrisa:-
Central banks in the west acted in concert to enable this and bring down US and UK and others.
I'm curious as to your particular thinking on this? Why would the banks effectively cut their own throats?
Thanks - in advance!
26. drewster said...
It's not just about houses. Pensions are another yawning gap between old and young. Has anybody here started a new job in the private sector recently with a final-salary or defined-benefit pension?
Even the state pension scheme is looking in worse shape with every passing day. Today's over-50s will get to retire at the age of 65; the over-40s will retire at 66; and the over-30s will retire at 67. The under-30s will be retiring at 68.
[Source: DirectGov: Changes to the State Pension age]
And what about the UK's natural resources? Oil production in the North Sea started in the latter half of the 1970s. By the mid-1980s the oil fields were pumping out as much oil as possible, and boomers were enjoying the economic boom. Most of that oil has now gone forever. Similar story for natural gas. Thanks, boomers.
27. tenant super said...
In a nutshell, 'no'. All the facets, good and bad, of humanity are present in every generation and every age. Their expression depends upon the social, political and economic environment.
It will always be a human attribute to want to secure wealth and stability for oneself and family. People have misunderstood that HPI does not achieve this for the reason IRT90s points out @6. The fault lies with those who created a system which naturally gives rise to endless cycles of 'Boom and Bust' rather than low house prices and stability that we see in countries like Germany.
28. devo said...
24. tenant super said... The fault lies with those who created a system which naturally gives rise to endless cycles of 'Boom and Bust'
which begs the question: who created such a system?
29. chrisa said...
@22
Who do the central banks work for? certainly not the populations of the countries they are in. Depends what the agenda is. If the agenda is to create chaos and collapse out of which you can forge a NWO then maybe that's it. Order out of chaos. If the agenda is to enable the rise of China in order to fulfill some religious prophecy maybe that's it. How many of the people in power are occultists and religious nutters? Interesting to know. Consider Mr Blair.
30. devo said...
by the way,
has t'internet been running slow lately?
31. devo said...
26. chrisa said... Depends what the agenda is
the agenda is self-enrichment
i doubt you have to go any deeper than that
32. chrisa said...
@27
They're probably having trouble tracking the activities of all the 'subversives' on HPC!
Digital TV. Anyone suspect that this will be able to transmit as well as receive? A CCTV in every home if you like.......
33. uncle tom said...
I take issue with the notion that the baby boomer generation, as represented by those who rode the wave, ended in 1964..
I vaguely recall that 1964 was the peak birth year - I'd have to check - but there is a disconnect between that and the financial representation of the baby boomer..
Those born bertween the mid war years up until the late fifties - arguably '57 - have had it very good. Those born after that period found the property market running away from them during the '80's, and if they did get on board then found themselves crushed by the last housing bust. Those born earlier were mostly able to cruise through the last bust, and have done very well since..
34. chrisa said...
28. the agenda is self-enrichment
More likely Global domination and enslavement. I might agree with you but isn't the symbol commonly associated with China the Red Dragon? Probably nothing.....probably..
The stated aim of Mr Blair (middle east Peace envoy - what a laugh!) is to unify all the worlds religions to form a One World Religion. And this guy was UK PM. How many others like him in positions of power?
35. devo said...
@31. chrisa
i think we give the powers that be far too much credit. they are invariably flawed individuals who have let power go to their heads
i suppose that jesus himself would fall within this definition
36. sneaker said...
makes a change from the under-18's!
37. chrisa said...
@32
.....far too much credit.
No that's what they gave us!
Interesting to look back at the photos of people like Thatcher and Blair and Brown before they were in serious power and compare to what they look like now. Not a pretty sight.
38. miken said...
@11 Not heard of 'Millbank'. I've heard of 'Millbrook' which is not too far away from me. So I'm probably not the insane, corrupt or evil person you think I am! You probably have a form of paranoia caused by persistently rising house prices. Though I'm not a qualified blog doctor...
Actually I wasn't blaming the over 45's. More reflecting the sentiment of the article. Obviously touched a nerve!
Yes it's hard to compete with a country like China who has next to no welfare system and treats some workers like slaves.
I feel that the SLS and QE has no doubt supported house prices and stopped a crash. Those who have invested in a 2nd home and then sold recently have no doubt benefited. The question is how to shift some of this wealth back to the young who don't even have one house? The fact of the matter is that there are people who are investing in lots of properties and getting low interest rates on their mortgages because of SLS/QE. The poor FTB can't access these low rates because of the high LTV. It all seems very unfair.
39. devo said...
what we need is a global benevolent dictator
i vote for shipbuilder
a 21st century noah
40. chrisa said...
@ 35.....Yes it's hard to compete with a country like China who has next to no welfare system and treats some workers like slaves.
That's funny. This is the country that George Bush described as Americas most favoured nation. This is also the country that has an environmental footprint of 1 (the ideal of the UN) unlike the UK and USA which are about 3 and 5 apparently. So this country is apparently the UN ideal with its family and environmental policies and as it's going to be the world superpower what's the betting its lack of welfare system and slave population will be the model to us all too!
When they tell you that the financial crisis was caused by incompetence they're lying.
When they tell you that no-one could have seen it coming they're lying.
Of course it's unfair. A future unfair for all ...is that the New labour election slogan?
41. shipbuilder said...
36. devo said...
"what we need is a global benevolent dictator
i vote for shipbuilder
a 21st century noah"
LOL
42. devo said...
37. chrisa said... When they tell you that no-one could have seen it coming they're lying
yes they are
When they tell you that the financial crisis was caused by incompetence they're lying.
yes and no (who readily admits to incompetence, unless caught?)
Chuck Prince discounted worries over the credit markets—saying Citigroup should continue the derivatives dance until the music stopped
43. devo said...
@38. shipbuilder
it is said that humour is funniest when based on truth
the chinese, who have a quote for every situation (as does the bible) says one can only move forwards or backwards
we either go backwards to the dark ages, or forwards to an enlightened future
(it's not easy being an idealist in the era of globalism)
44. mr g said...
@devo "the chinese, who have a quote for every situation"
As exemplified by the following, although no connection with HPC:
Man with one chopstick go hungry
War does not determine who is right, war determine who is left
Man who scratch ass should not bite fingernails. (Hope Gordon Brown remembers that seeing he bites his fingernails)
Person who cooks meat and peas in same pot is very unhygienic
Baseball is wrong: man with four balls cannot walk.
Man who fish in other man's well often catch crabs
45. Sampford said...
If they Under-45s did not have expectations and aspirations way beyond their means or capabilities, if they did not have two or three maxxed-out credit cards and other ridiculous debts, and if they started saving their money instead of spending it all on luxuries with their restaurant life-style, Sky-TV and Wii games, I might have some sympathy for them. If you live for today, you will burn up by tomorrow.
46. matt_the_hat said...
mr g - I'm sure you'll be willing to set the record straight and not claim a state pension - should cover the budget deficit from previous years.
47. Si said...
Can I just point out the absolute blind hypocracy of the likes of mr g defending the baby boomers in one one breath, and in the very next tar the whole of the "younger" generation as celebrity following mindless idiots who deserve their fate? I'm sorry you do yourself, or your generation, no favours.
PS I'm a PhD, 32, careful with money, very politically aware, and still have to live in a shared house.
48. nomad said...
Shape up shipbuilder.
Cometh the time. Cometh the man.
49. Stevie Dee said...
I spoke to one bb and he said he had 5 jobs to choose from. Furthermore, a lot of bb's diversified the savings from share in collusion with government social engineering to basically create an albanian pyramid devoid of morality and consideration of the collective or society as a whole. They naturally practised self-interest control freakery on the rest of us, this behaviour / mentality was conceived / introduced under thatcherism. The free-love, lets through values out of window, morally bankrupt (majority) generation, the pluto-leo's will imo end up eating soup. They are the charmed generation, most as well as having an unfair advantage vis-a-vis house prices, but a lot also inherited money from a more frugal and steadeast generation who went through the horrors of two world wars. This generation fought for our freedom and for the well-being of future generations, like with most things, good intentions don't always produce the intended results. Imo this generation will pay a hefty price for the state of our society today. Quite simply, this generation, have tried to rig the game of monopoly, but nobody wants to play. Eat soup my friend, eat soup.
50. Rental John said...
I'm 51 going on 52....worked hard all my life....and have been screwed over so often I don't even know when I am being srewed anymore!
Endownment policies - screwed (criminal mismanagement by Standard Life!)
With Life policies - screwed (crap performance by Scottish Widows)
Pension - screwed
Savings - screwed
Children's student debt - screwed
51. Ppyj said...
The boomers have caused immeasurable, incalculable damage. Every day I see friends of my kids, and have tremendous respect for them; they have to deal with a world where the opportunities I had have been curtailed or extinguished; doors that were opened to me are now welded shut; even the public libraries have been reduced to shells of what they were. There are fees and loans where there were once grants, abysmal health care and dental care, surveillence rather than freedom, gang warfare, drugs, lawlessness, globalisation.
It is worse than that. The music of the boomers is vapid to the point of being nauseating; the really important classical music of the 20th century is either invisible to them or a damn nuisance; I'm thinking about Berio, Lutoslawski, Ligeti, Hindemith, Williams, Britten. The boomers have no such figures of such stature.
The parliamentary institutions that we had that protected us from tyranny have been replaced by bull*** ersatz substitutes that promote self interest, corruption and nepotism.
The best you can say about them is that they produced generation X, who on the whole were nothing like their bloated, ignorant, and self centred parents; but generation X were subtracted from the world of the living to the best of their parents ability; ignored in childhood, they developed patterns of insecurity and fear that shaped the years and the culture to come.
Generation X grew up knowing that they could not trust their parents for spit. Knowing that they would inherit nothing but debt and dust from their boomer parents, they nutured their own kids with a ferocity never before seen; over compensating perhaps.
The faster the boomers are buried, the better the world will be, and the greater the chances of the human race recovering.
The next generation and the one after that are still in the huge, cold shadow of the boomers. They do the best they can; but in a world where so much has been destroyed, they have to rediscover morality, science, faith, and civilisation.
I salute them; may God bless them.
52. tenant super said...
Devo @ 25
24. tenant super said... The fault lies with those who created a system which naturally gives rise to endless cycles of 'Boom and Bust'
which begs the question: who created such a system?
Imagine that all the individuals born after 1980 entered into a strange time-space anomoly and swapped places with the baby boomers, would the situation be any different? Of course not. The individual people would have made the same lousy choices given the social and economic environment.
Causal determinism is the thesis that future events are necessitated by past and present events combined with the laws of nature. If hard determinism is true, and free will is not, then morality and ethics are meaningless concepts. I am a soft determinist and believe that there are varieties of free-will and ethical choices on the level of the individual but these are heavily influenced by media, culture and society so they are only free to degrees. The consumption of the boomers was influenced by war-time austerity. The autonomy and individualism was in part a backlash against Victorian Christian morality.
'Boomer-hate' is misguided as it assumes individual and collective choices were made in a societal vacuum. The system evolved as the natural consequence of human nature in a unique cultural, societal, political and economic situation.
53. mr g said...
@MTH " I'm sure you'll be willing to set the record straight and not claim a state pension -"
I'll have no qualms whatsoever in claiming the state pension.
I paid in 44 years NI contributions and as sure as hell I've no intention of gifting them to the state. If that upsets some people, tough.
However, I'm sure all those who aren't boomers will bequeath their NI contributions at the appropriate moment, (said with irony)
54. ontheotherhand said...
From each according to their ability. To each according to their need.
The argument for taxing the rich and redistributing it is that it is fairer and that the rich have broad shoulders. The reason it works in a democracy of course is that the rich are a minority and the majority will always vote for ever more goodies and freebies from the public wallet. Similarly it could be argued (I don't agree) that since the over 45's have so much of the wealth, it would be fairer to tax them more because they have broad shoulders. Luckily, the reason this would never work in a democracy is that the over 45s are not a minority by any means, and those under 45 know that they will get there one day!
55. shipbuilder said...
ontheotherhand - the primary argument for taxing the rich is nothing to do with the rich simply having more, but that the rich benefit more from public services - the education and healthcare of their employees, transport systems and so on - the 'externalities' that allow their businesses to flourish. Another, more divisive argument, is that the rich also receive more wealth than their 'value' to society.
We all know by now that in many cases, the 'market' is a poor determinant of the value of many individuals' work, so the balance is redressed somewhat by tax.