Have We All Been Mugged?

[Lucifer]

Have we all been mugged, has the opportunity to better ourselves been snatched away from under our noses?

First we had the banking crisis. Public money was used to protect the rich from the consequences of thier own greed,

incompetence and criminality..so they covered their losses and then used virtually free money supplied at the taxpayers expense

to make even more money.

Now that public debt has to be paid..services will be cut, taxes will be raised, but will the financial elite bear any of the pain,

pay any of the cost...I think not. Will decreased benefits, cuts in spending on health, education etc be reversed after they've been made and times are "better"..probably not.

Meanwhile, property in the UK seems to become ever more expensive. (Oh silly me, its the bankers investing all that free money we've given them into BTL portfolios...)

If you can't afford to buy you'll have to rent, and pay through the nose as rents (underwritten by houseing benefit, paid by the taxpayer)

also seem to be on an upward trajectory.

In fact, you'll pay so much in rent that its unlikely you'll ever be able to save up the 25% deposit needed to put down for a mortgage, particularly as your wages are likely to fall in real terms over the next few years as globalisation bites even deeper into the social fabric.

(Actually thats if you even have a job...).

Still, perhaps you could start your own business. You could open a shop, except that rents and business rates are set so high you'll work your **** off and the likelihood is it'll only ever be a marginal business. An internet business, then, perhaps..except that the internet is a bit like a ponzi scheme..it works well if you get in there first but after that its very difficult to squeeze money out of...unless you can buy market share through lots of advertising..but, oh, you don't have that much money do you?

OK..so come up with an original idea..but what if it needs money to finance it?

Thats fine..go the bank. Oh, but you'll need security for the loan, thats fine you can use our home..oh, but your not a homeowner are you..

Never mind. Things will be better for your kids. Yeh, right. remember you don't have the money to put them into private eductation. That means they're going to go to a crappy state comprehensive. The devalued grades of their second rate eductation might then get them to uni..they'll finish their course with massive debts, if they're lucky they'll get a job, but in real terms it'll be for less (real terms) money than their predecessors...it should be enough to cover the rent, still maybe one day they'll save up enough to get a mortgage. Or maybe not.

Does anyone else here fell that some time when we weren't looking, somebody has pulled the ladder up behind them..?

[The Masked Tulip]

Yes, the world is now controlled by a super elite of super rich people.

[slacker]

Now that public debt has to be paid..services will be cut, taxes will be raised, but will the financial elite bear any of the pain,

pay any of the cost...I think not. Will decreased benefits, cuts in spending on health, education etc be reversed after they've been made and times are "better"..probably not.

Feel like a remedial teacher today. The deficit has nothing to do with the banking crisis. The decrease in spending on health and benefits is because the previous government spent more every year than the country generated - on many worthy causes and many daft ones.

The reality is that we have to live within our means. A citizen cannot borrow substantially more than she makes every year for a decade without going bust, neither can a country.

The 'financial elite' do not use many 'public services' - if forced to 'bear the pain' any further than the existing 60%+ income tax, CGT on all investments and scrapping of any relief etc. they'll just leave - they are a bit more mobile than benefit recipients and most users of public services. Try paying for any of it without them.

[Lucifer]

Feel like a remedial teacher today. The deficit has nothing to do with the banking crisis. The decrease in spending on health and benefits is because the previous government spent more every year than the country generated - on many worthy causes and many daft ones.

The reality is that we have to live within our means. A citizen cannot borrow substantially more than she makes every year for a decade without going bust, neither can a country.

The 'financial elite' do not use many 'public services' - if forced to 'bear the pain' any further than the existing 60%+ income tax, CGT on all investments and scrapping of any relief etc. they'll just leave - they are a bit more mobile than benefit recipients and most users of public services. Try paying for any of it without them.

Your teaching skills are a bit remedial themselves...so there has been absolutely no socialisation of private debt then?

Edited June 6, 2010 by Lucifer

[DeepLurker]

Feel like a remedial teacher today. The deficit has nothing to do with the banking crisis. The decrease in spending on health and benefits is because the previous government spent more every year than the country generated - on many worthy causes and many daft ones.

The reality is that we have to live within our means. A citizen cannot borrow substantially more than she makes every year for a decade without going bust, neither can a country.

The 'financial elite' do not use many 'public services' - if forced to 'bear the pain' any further than the existing 60%+ income tax, CGT on all investments and scrapping of any relief etc. they'll just leave - they are a bit more mobile than benefit recipients and most users of public services. Try paying for any of it without them.

I keep hearing about how all the rich will leave with their money.

Then I also hear about many of our problems being caused by a wave of money (excess savings) splashing around the world, and insufficient investment opportunities to soak them up.

If point 2 is correct, it would suggest that point 1 is not a problem - we've got too much capital already, no?

[Harry Sacks]

Feel like a remedial teacher today. The deficit has nothing to do with the banking crisis. The decrease in spending on health and benefits is because the previous government spent more every year than the country generated - on many worthy causes and many daft ones.

The reality is that we have to live within our means. A citizen cannot borrow substantially more than she makes every year for a decade without going bust, neither can a country.

The 'financial elite' do not use many 'public services' - if forced to 'bear the pain' any further than the existing 60%+ income tax, CGT on all investments and scrapping of any relief etc. they'll just leave - they are a bit more mobile than benefit recipients and most users of public services. Try paying for any of it without them.

You're dreaming.

The "super rich" are largely non productive speculators manipulating the real economy.

Imagination, skill and resources create wealth.

[LJAR]

Yes, the world is now controlled by a super elite of super rich people.

Now controlled?

Vested interests have controlled government for centuries. They have just done a good job of putting together a coalition of enough vested interests to vote them in.

The bankers are not as mobile as all that, but their money is. Tax it too highly and the money will disappear to offshore accounts and stay out of the UK altogether.

Raising tax rates decreases the tax take.

[Dorkins]

If you are just starting out today with no house and no inheritance, it is not possible to live a 1970s lifestyle (small house, one breadwinner, kids, 10% savings rate) on the average 2010 income in your town. So, yes, we have been mugged.

[LJAR]

If you are just starting out today with no house and no inheritance, it is not possible to live a 1970s lifestyle (small house, one breadwinner, kids, 10% savings rate) on the average 2010 income in your town. So, yes, we have been mugged.

Well the average household earns £32k so I reckon a 1970s style existence would be possible.

Let's see:

£32k - monthly take home of £2,000

Mortgage: (£150k @ 6% repayment) £1000

Food: £200

Savings: £200

Bills: £100?

Travel £150?

It's touch and go as to whether it would be possible to do. It would be an interesting experiment anyway.

[Bloo Loo]

If you are just starting out today with no house and no inheritance, it is not possible to live a 1970s lifestyle (small house, one breadwinner, kids, 10% savings rate) on the average 2010 income in your town. So, yes, we have been mugged.

we are living the result of that lifestyle now.

[porca misèria]

If you are just starting out today with no house and no inheritance, it is not possible to live a 1970s lifestyle (small house, one breadwinner, kids, 10% savings rate) on the average 2010 income in your town. So, yes, we have been mugged.

A £1500 salary in 1975 would no more buy you a house than £15000 today. And the alternatives wouldn't have provided you with mod-cons like double-glazing or heating, and the daily hot bath would've been too far-fetched even to dream of for the lower-paid.

[slacker]

Bills: £100?

£100 wouldn't even pay the council tax near most cities.

[Lucifer]

Well the average household earns £32k so I reckon a 1970s style existence would be possible.

Let's see:

£32k - monthly take home of £2,000

Mortgage: (£150k @ 6% repayment) £1000

Food: £200

Savings: £200

Bills: £100?

Travel £150?

It's touch and go as to whether it would be possible to do. It would be an interesting experiment anyway.

With kids, it defo a no go!!

[D.C.]

Well the average household earns £32k so I reckon a 1970s style existence would be possible.

Let's see:

£32k - monthly take home of £2,000

Mortgage: (£150k @ 6% repayment) £1000

Food: £200

Savings: £200

Bills: £100?

Travel £150?

It's touch and go as to whether it would be possible to do. It would be an interesting experiment anyway.

Your starting £32k assumes two income not one. The OP's specified one breadwinner so you need to drop that to the median wage in your town which will probably be £17k-£27k depending on where you live.

You also forgot 'little things' like council tax?

£150 a month for a car is also very, very low. If you are 'just starting out' a young male will be paying that much for third party insurance on any car.

[slacker]

If you are just starting out today with no house and no inheritance, it is not possible to live a 1970s lifestyle (small house, one breadwinner, kids, 10% savings rate)

The state borrowing of the last 40 years has left everyone expecting to have *everything*. House, job, 100% public service coverage and everything getting better every year - house price up, salary up, better services than last year.

The problem is that this is funded, not by being more productive, but by either the individual or the state borrowing from future productivity.

If there is any deterioration in any of the house/job/services metrics then the 'super elite of super rich people', as someone said earlier, have to pay more - all those on 50k or 100k or 150k - the top 5 or 10%.

95% of this group are doctors, surgeons, scientists, senior academics, solicitors, barristers, accountants, entrepreneurs and business managers - not 'greedy bankers'.

This group is biased to use private health, public schools and live in low crime areas - they get very little back for what they pay in taxation. It is this group that make up a lot of the 250k people who currently emigrate from the UK yearly.

When they leave - they don't free up a school place - or reduce the cost of the NHS - we just get 30k or 60k or 90k less tax revenue than we got last year and it leaves the country poorer in many more ways.

Edited June 6, 2010 by slacker

[LJAR]

'Pologies I am young and slightly foreign to boot. I wasn't trying to put out a definitive list, just a quick attempt at estimation. I always forget council tax since I think of "bills" as utilities.

What did the average family have in 1970 anyway (I wasn't alive then).

[futurepaul]

Vote with your feet move to a country more suited to your skills and social needs.

I beleive The new 'Brain Drain' will be Browns legacy. He has created indebted young with ambition, a degree and a feeling of entitlement, who are mobile (some good some bad). The mobility means anyone The UK needs will eff off to somewhere better (less worse). Leaving the lazy and useless behind.

I propose changing the name Great Britain to Britain

[futurepaul]

'Pologies I am young and slightly foreign to boot. I wasn't trying to put out a definitive list, just a quick attempt at estimation. I always forget council tax since I think of "bills" as utilities.

What did the average family have in 1970 anyway (I wasn't alive then).

I think the corrections only serve to confirm your point

[Lucifer]

The state borrowing of the last 40 years has left everyone expecting to have *everything*. House, job, 100% public service coverage and everything getting better every year - house price up, salary up, better services than last year.

The problem is that this is funded, not by being more productive, but by either the individual or the state borrowing from future productivity.

If there is any deterioration in any of the house/job/services metrics then the 'super elite of super rich people', as someone said earlier, have to pay more - all those on 50k or 100k or 150k - the top 5 or 10%.

95% of this group are doctors, surgeons, scientists, senior academics, solicitors, barristers, accountants, entrepreneurs and business managers - not 'greedy bankers'.

This group is biased to use private health and public schools - they get very little back for what they pay in taxation. It is this group that make up a lot of the 250k people who currently emigrate from the UK yearly.

When they leave - they don't free up a school place - or reduce the cost of the NHS - we just get 30k or 60k or 90k less tax revenue than we got last year and it leaves the country poorer in many more ways.

In the OP I never advocated "punishing" those on higher salaries. In my case I grew up in a council house, I was lucky enough to pass the 11+ and as a result I got a bloody good education that gave me the skills to, in my mid twenties, start my own businesses, and I've now been working for myself for 22 years and I am happy where I am in life. My point is that I don't know how somebody from my background would do what I did nowadays...they would probably be stuck with an inferior education, college fees, lower real term wages, less employment opportunities, vastly increased property prices and increased cost of living. I feel that nowadays the game is very much rigged against those who have little and I wonder what has happened to the routemap of social mobility...

[caparn]

Have we all been mugged, has the opportunity to better ourselves been snatched away from under our noses?

It depends who you are:

You haven't been mugged if:

1. You are a banker receiving their massive bonus after the tax payer rescued the banks.

2. If you took out a massive self-certified 'liar loan' mortgage and are benefiting from the current low interest rates.

3. If you are in business and have taken out large loans on unrealistic business cases.

You have been mugged if:

1. You have saved money for something rather than take a loan out for it by having interest minus inflation eat into your saving.

2. If you are on a standard wage and have had the effects of quantitative easing eat away it's value against any imported goods.

3. If you want house prices to return to a realistic level and all you can see is government policies trying to support them.

[mdman]

Feel like a remedial teacher today. The deficit has nothing to do with the banking crisis. The decrease in spending on health and benefits is because the previous government spent more every year than the country generated - on many worthy causes and many daft ones.

The reality is that we have to live within our means. A citizen cannot borrow substantially more than she makes every year for a decade without going bust, neither can a country.

The 'financial elite' do not use many 'public services' - if forced to 'bear the pain' any further than the existing 60%+ income tax, CGT on all investments and scrapping of any relief etc. they'll just leave - they are a bit more mobile than benefit recipients and most users of public services. Try paying for any of it without them.

Wow!! How stupid can a 'teacher' get????

The NAO estimated the bank bailout costs to end 2009 were around £130bn. That does not count the indirect bailouts through loan guarantees, wide lending margins and tolerance of accounting fraud when they value their assets. The costs to us do not include the reduced purchasing power of the £ against oil following QE.

Net borrowing was £30.8bn in pre-bailout 2006-07. The budget deficit was £4.9bn

Net borrowing is £145bn in 2009-10. The budget deficit is £100bn

The jump in net borrowing is because of the bank bailouts

The reality is any bankster who suggests the public sector is to blame deserves to be lynched. Banksters are already the biggest benefit claimants on the planet.

Please leave you useless parasites!

[Dorkins]

Well the average household earns £32k so I reckon a 1970s style existence would be possible.

Let's see:

£32k - monthly take home of £2,000

Mortgage: (£150k @ 6% repayment) £1000

Food: £200

Savings: £200

Bills: £100?

Travel £150?

It's touch and go as to whether it would be possible to do. It would be an interesting experiment anyway.

The trouble with that kind of calculation is always the income and house price figures. The average 'household' income is 32k - does that mean two wages? Income inequality has gone up a lot since the 1970s, so should you really be using the median and not mean household income (median income in the UK is more like £26k)? Also the age distribution of income has shifted significantly, with people in their 50s (most of whom have more or less paid off their mortgages) now earning much more relative to the average income than was the case 40 years ago. For these reasons I think your calculation is on the generous side.

A real like-for-like comparison would be the lifestyle of a 1970s 30-year-old on the median wage for his age versus a 2010 30-year-old on the median wage for his age. The statistics are pretty tricky, I think the most reliable evidence would actually be anecdotal. How many 30-year-olds do you know on averageish wages who are buying a small house and would be able to keep a wife and kids at home? How many were there in the 1970s? The answer to the second question is, I suspect, a lot. That pretty much describes my parents and most of my friends' parents.

[Lucifer]

Wow!! How stupid can a 'teacher' get????

The NAO estimated the bank bailout costs to end 2009 were around £130bn. That does not count the indirect bailouts through loan guarantees, wide lending margins and tolerance of accounting fraud when they value their assets. The costs to us do not include the reduced purchasing power of the £ against oil following QE.

Net borrowing was £30.8bn in pre-bailout 2006-07. The budget deficit was £4.9bn

Net borrowing is £145bn in 2009-10. The budget deficit is £100bn

The jump in net borrowing is because of the bank bailouts

The reality is any bankster who suggests the public sector is to blame deserves to be lynched. Banksters are already the biggest benefit claimants on the planet.

Please leave you useless parasites!

Exactly...we've actually beem mugged three times by the bankers:

1. They get our money to cover their losses.

2. They use our money to speculate in, for example, property to make themselves more money.

3. Our taxes go up/services are cut to pay for all the money lent to bankers..

I do not wish to see people who've worked hard in life to better themselves being further taxed, but boy I'd like to see some bankers go to prison!

[homeless]

95% of this group are doctors, surgeons, scientists, senior academics, solicitors, barristers, accountants, entrepreneurs and business managers - not 'greedy bankers'.

This group is biased to use private health, public schools and live in low crime areas - they get very little back for what they pay in taxation. It is this group that make up a lot of the 250k people who currently emigrate from the UK yearly.

When they leave - they don't free up a school place - or reduce the cost of the NHS - we just get 30k or 60k or 90k less tax revenue than we got last year and it leaves the country poorer in many more ways.

but most of their pay is paid out of taxes is it not? i would say the vast amjority you have mentioned get a government check every month. So how does it make us poorer with them leaving?, and if they do leave well no big deal is it, because someone else here will fill there shoes.

[slacker]

The NAO estimated the bank bailout costs to end 2009 were around £130bn. That does not count the indirect bailouts through loan guarantees, wide lending margins and tolerance of accounting fraud when they value their assets. The costs to us do not include the reduced purchasing power of the £ against oil following QE.

This is exactly the point I am making. The reason for the debt of 900bn going up 160bn a year is not directly due to the bank bailouts. The bailouts affect the value of our currency and our ability to grow - but the deficit is because we are spending more than we make.

The bank bailout may not end up costing the taxpayer very much as the state shareholding will likely be sold for a tidy profit in a few years. It's a sideshow - we have to live within our means.

I've no more time for bankers than I have for socialists. I just want people who work hard to be fairly rewarded.