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koala_bear

Bbc: Why Do The German And Uk Economies Differ Sharply?

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http://www.bbc.co.uk...siness-12447607

The editor must have gone home for the day, a rare off message moment form the Beeb

Debt culture British households are more indebted than their German counterparts.

In the UK, debt is about 80% of income left after tax. In Germany, it is about 60%.

On top of that, Britons borrow to buy property - the weight is around their necks for life.

Mortgages make up about 90% of people's debt. In Germany, it is about 70%.

Artur Fisher is a good person to compare and contrast. He is the joint-chief executive of the Berlin stock exchange. He has worked and lived in London and he's married to a British woman.

His mother-in-law lives in East Anglia so he goes there often.

He makes much of the British belief that owning one's own home is one of the prime aims in life while Germans rent.

"In Germany only 50-60% of the population own their own house. The rest rent. Renting is quite normal".

Contrast that with the UK where he says that 90% of households own their own home.

"The most important thing in their life is to own their own house. So you tie down capital."

He notes, too, a difference in attitude between him and his wife when it comes to mortgages.

The British, he says, are used to variable rates of interest - they go up and down over the lifetime of the mortgage. In Germany, you agree the rate and it stays fixed.

"My wife is English and when we agreed a ten year mortgage at 3.5%, she asked me why we didn't get a variable rate because it might go lower.

"This shows you the difference of attitude whereby the English see an opportunity in change whereas the Germans hate change - we don't want change. We want to plan things."

Edited by koala_bear

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Obviously i wasnt alive back then, but my parents always say after WW2, Britain basked in the glory of winning the war, resting on our laurels (ie being lazy) whilst the Germans rebuilt at breakneck pace.

I guess people always say we won the war, they won the peace.

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I was reading the book 'How the west was lost' recently and the author makes the blindingly obvious point that if shelter and food are basic necessities of life, one might expect the first job of government would be to make these things as affordable as possible for the population.

Instead of which all manner of tax breaks and policies have been pursued to entice people to invest in housing as a speculative punt, with the resulting price inflation.

The end result is- as the german guy points out- a massive malinvestment of capital occurs. While we were busily selling each other houses at ever increasing prices, the Germans were investing in themselves as a productive nation.

Our failure to have a 'guillotine moment' in the historical past left the landed gentry in control of the policy and we have created a 'rentier paradise' where returns on capital are taxed less than work and the economy orbits around the rights and privilege of the property owner, whose interests must be protected at any and all costs.

Edited by wonderpup

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Obviously i wasnt alive back then, but my parents always say after WW2, Britain basked in the glory of winning the war, resting on our laurels (ie being lazy) whilst the Germans rebuilt at breakneck pace.

I guess people always say we won the war, they won the peace.

Well, they didn't have an empire to support. Or lend-lease to pay back.

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Thread of the day.

Like the OP says, the juniors must have been left to it.

The majority of people in Britain make me almost physically sick on a daily basis.

We will not look ourselves in the eye.

I thought Cameron would grasp the nettle with a solid 5 years ahead to do as he saw fit.

Not a ******ing chance.

If Germany so desired (i know they dont) they could march straight up Whitehall now and nobody would give a shit.

Hopeless nation.

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I was reading the book 'How the west was lost' recently and the author makes the blindingly obvious point that if shelter and food are basic necessities of life, one might expect the first job of government would be to make these things as affordable as possible for the population.

Instead of which all manner of tax breaks and policies have been pursued to entice people to invest in housing as a speculative punt, with the resulting price inflation.

The end result is- as the german guy points out- a massive malinvestment of capital occurs. While we were busily selling each other houses at ever increasing prices, the Germans were investing in themselves as a productive nation.

Our failure to have a 'guillotine moment' in the historical past left the landed gentry in control of the policy and we have created a 'rentier paradise' where returns on capital are taxed less than work and the economy orbits around the rights and privilege of the property owner, whose interests must be protected at any and all costs.

Excellent post

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Not always, they apparently find it difficult counting spitfires and hurricanes.

Go on, change your avatar to a Winston C picture, you know you want it ;)

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Go on, change your avatar to a Winston C picture, you know you want it ;)

Move from the greatest WWII general to the greatest politician in war time! :)

It's a move worth considering.

Edited by interestrateripoff

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Move from the greatest WWII general to the greatest politician in war time! :)

It's a move worth considering.

Probably the most interesting polititian the uk has ever had

If you sketch out his life it's like tracing an outline of half the twentieth century

Even more astounding when you consider he did a lot of this absolutely shit-faced

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Probably the most interesting polititian the uk has ever had

If you sketch out his life it's like tracing an outline of half the twentieth century

Even more astounding when you consider he did a lot of this absolutely shit-faced

He certainly had a very interesting life and lead the nation to victory in the war, all whilst drunk. One wonders if he could have done it sober? I wonder what the teetotal Hitler thought at the last having been outwitted by a drunk?

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Because you average Hun is a bit more skint than your average Brit on a GDP PPP per capita basis,

"United Kingdom Gross domestic product based on purchasing-power-parity (PPP) per capita GDP: $ 35,082.832"

http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2007&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=112&s=NGDPD,NGDPDPC,PPPGDP,PPPPC,LP&grp=0&a=&pr.x=25&pr.y=6

"Germany Gross domestic product based on purchasing-power-parity (PPP) per capita GDP: $34,905.117"

http://www.imf.org/external/pubs/ft/weo/2010/01/weodata/weorept.aspx?sy=2007&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=134&s=NGDPD,NGDPDPC,PPPGDP,PPPPC,LP&grp=0&a=&pr.x=52&pr.y=17

According to the IMF, which is apparently a reputable source even though it's run by a French socialist.

And according to the ease of doing business index, Deutschland comes in at some paltry 23, while good old Blighty scampers in fourth behind Singapore, HK and NZ (wherever that is?).

And that's a world bank thing, apparently,

http://www.doingbusiness.org/rankings

So, all together then,

http://www.youtube.com/watch?v=rkRIbUT6u7Q

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One nation has engineers in charge who are continually increasing the capital wealth of the nation through building new capital plant and longterm research and development. While paying off loans used for expansion.

The poor UK companies loaded with debt.. debt that was taken to do things like buy back shares, or to pay off buyout loans.. are paying all this money in interest. They just can't compete with foreign companies who do not have this huge debt burden. They don't have the money to do more capital investment or increase the research budget, all that money is going on interest on their debts.

The problem is what the Germans are doing takes hard work over a long period of time. Its not a get rich quick plan. But it is a downhill path, the more net capital you accumulate the easier it is to compete.

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Because you average Hun is a bit more skint than your average Brit on a GDP PPP per capita basis

A bit sad to hide behind PPP on the way down. We never used it on the way up.

And then there's this:

2601UKGermany2.jpg

post-8051-0-53812400-1297805861_thumb.jpg

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I look at the German model and how it's doing and it keeps my faith in the power of engineering. If it's not wanted in the UK, at least I know it's wanted elsewhere.

I'm HOPING the economy shifts massively somehow... but with all this talk of private sector jobs being created etc, I am seeing nothing! There is no great movement to change the flow of the economy, everybody is just keeping things the way they are and crossing their fingers.

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And it would appear from what the idiots guide says our friends in Langley think the Hun has a public debt of 77.2% of GDP compared to a mere 53.5% for Blighty.

All this Hun worship seems as ill informed as it is tasteless to me.

(That's Wikipedia's quotation of the CIA world fact book for those that don't know.)

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And it would appear from what the idiots guide says our friends in Langley think the Hun has a public debt of 77.2% of GDP compared to a mere 53.5% for Blighty.

All this Hun worship seems as ill informed as it is tasteless to me.

(That's Wikipedia's quotation of the CIA world fact book for those that don't know.)

You seem somewhat obsessed (as well as wrong).

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"You seem somewhat obsessed (as well as wrong). "

If you think being reasonably well researched is obsessed it's probably because you are idle or stupid or both.

If the imf, world bank or cia world factbook are wrong - demonstrate it.

Edited by indirectapproach

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Whilst we talk often about Germany and it has become almost received wisdom that if we controlled our land prices we would become much more competitive.

What about Japan?

They have been massive exporters throughout their land cycle catastrophic though it was. And land is still very, very expensive. So what is going on here?

It was concentrated and short lived, that limited the damage and infection/destruction of other industries.

We've gone the pandemic route.

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I lived and worked in Germany for 4 years managing Germans.

What they do well is mass scale automation both in terms of production and human behaviour. There is no free thinking, process, process, process. So if you want to mass produce quality items that are the same day in day out, then the German worker is your man. This is the strength of Germany.

Whereas us Brits tend to do genius things in sheds and prefer to work in a free thinking environment and can produce innovation. cutting edge technology but in a small scale, we seem to have an inability to industrialise it i,e no process.

examples. The Spitfire, cutting edge, Concorde, Magnox reactors, Dyson vacuum cleaners, Formula 1 cars (when Mercedes wanted a formula one engine they bought Ilmoor an English company because they knew that could not make it in Germany), when BMW wanted state of the art four wheel drive they bought Rover to get the Land Rover technology), etc, etc.

If our nations strengths are not 50,000 people large scale manufacturing plants then we need to play to our strengths and understand that small companies like ARM, Wolfson, Maclaren, etc have cutting edge tech and design and celebrate it and encourage other small companies.

So the answer is because we have different national traits - The Germans like to do things en mass and we are more individualistic.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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