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Ministers Admit Family Debt Burden Is Set To Soar

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http://www.guardian.co.uk/politics/2011/apr/02/family-debt-burden-government-figures

Families will be hit by a spiralling debt crisis over the next four years that will see average British households plunge further into the red as the government austerity programme bites, official figures reveal.

The Office for Budget Responsibility has raised its prediction of total household debt in 2015 by a staggering £303bn since late last year, in the belief that families and individuals will respond to straitened times by extra borrowing. Average household debt based on the OBR figures is forecast to rise to £77,309 by 2015, rather than the £66,291 under previous projections.

Economists say the figures show that George Osborne's drive to slash the public deficit and his predictions on growth are based on assumptions that debt will switch from the government's books to private households – undermining his claims to be a debt-slashing chancellor.

Labour accused the government of piling agony on to hard-pressed families and storing up long-term problems of personal indebtedness.

At last year's budget the official forecast from Osborne was that household debt – which includes mortgages and credit card debt – would be £1,823bn. But in a recent adjustment not highlighted in last month's budget, the OBR has raised the figure to £2,126bn.

A Treasury spokesman said Osborne put the adjustment down to "higher-than-expected inflation driven by higher than expected rises in commodity prices". The Treasury also attempted to head off criticism by saying the OBR had also produced figures showing that the level of household savings was "holding up".

But experts expressed alarm. The Nobel prize-winning economist Paul Krugman, writing on his blog, said: "People have been digging into the details of the government forecast and finding that it relies on the assumption that household debt will rise to new heights relative to income.

"Why? Because the only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap – and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt."

more at the link..

Course the economy could just crater like the moons surface instead. Or the banking system could be abandoned and the money as debt thing consigned to history.

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"Why? Because the only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap – and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt."

That's getting perilously close to Austrian economics. All that remains is to join the dots and see how we got there in the first place ... above all, the abandonment of poor old Prudence since about 2000 ...

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http://www.guardian.co.uk/politics/2011/apr/02/family-debt-burden-government-figures

Course the economy could just crater like the moons surface instead. Or the banking system could be abandoned and the money as debt thing consigned to history.

I love the way the government just expects families to take on this debt.

'Transferred from the state to families.'

In this climate of instability, where is this 'growth of the private sector' going to come from? They must know something we don't, because what job sectors now in the UK are growing? I can't think of any..only the economy of going into debt. But capitalism needs it's yearly 3% of growth from somewhere might as well be those hard working families.

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This is the fatal inconsistency in policy; people need to save more to delever from very high debt levels and the only way to do this is to consume less. But look at the squeals that accompany a reduction in M & S sales; in fact this is precisely what is needed - for people to spend less - but it's portrayed as a disaster. The truth is that the economy is walking on eggshells.

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I love the way the government just expects families to take on this debt.

'Transferred from the state to families.'

In this climate of instability, where is this 'growth of the private sector' going to come from? They must know something we don't, because what job sectors now in the UK are growing? I can't think of any..only the economy of going into debt. But capitalism needs it's yearly 3% of growth from somewhere might as well be those hard working families.

Capitalism doesnt need growth at all, growth is a natural result of it, capitalism is theoretically just the efficient allocation of capital, by far the most capitalist periods of a cycle are recession, negative growth which is simply destroying malinvestment and naturally encourages sound investment due to scarcity of capital.

There are two entities that need growth, Govt (to make good on lies they have previously promised to win elections) and banks to stop the monetary system imploding.

Capitalism clearly has fck all to do with either of these things, the closest you have come to capitalism was 2000 and then 2008, both lasted for about a year until the banks and govt decided to step in and make things worse at some point in the future for themselves and the population

Edited by Tamara De Lempicka

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I love the way the government just expects families to take on this debt.

'Transferred from the state to families.'

That's a grauniad journo's words ....

In this climate of instability, where is this 'growth of the private sector' going to come from? They must know something we don't, because what job sectors now in the UK are growing? I can't think of any..only the economy of going into debt. But capitalism needs it's yearly 3% of growth from somewhere might as well be those hard working families.

Growth comes from human ingenuity - new ideas. The role of government is to set the scene for ideas to flourish and prosper, or to wither and fade.

Current circumstances are not good, due to the weight of debt, taxation, rents, red tape, etc. And perhaps more than that, the cries of outrage at any suggestion of reducing the deadweight of public spending, and the political clout of certain lobbies (above all, pensioners). The current government is making some real improvements, most notably in the field of taxation (the EIS and VCT changes will boost investment in small biz, too), but show worryingly few signs of addressing other barriers to enterprise.

If there's a good news story, it's the reining in of the previous government's pork-barrel trend.

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Capitalism doesnt need growth at all, growth is a natural result of it, capitalism is theoretically just the efficient allocation of capital, by far the most capitalist periods of a cycle are recession, negative growth which is simply destroying malinvestment.

There are two entities that need growth, Govt (to make good on lies they have previously promised to win elections) and banks to stop the monetary system imploding.

Capitalism clearly has fck all to do with either of these things, the closest you have come to capitalism was 2000 and then 2008, both lasted for about a year until the govt and banks decided to make things worse at some point in the future

It seems to me that if the coalition ever intended to try sort things out, they changed their mind in October. They must have had a good look at the books and thought "Oh f***, we cannot fix this mess, let's do as many favours for the rich as we can to make ourselves as money as possible before the cracks grow too wide for the paper".

There are no plans at all to cut debt. If other countries start improving that's when our problems really surface. Your mid-2013 bear thread could well be right.

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Yes, we will be be saved by more debt! YAY for debt!!

Solve a debt problem by putting people in more debt! Cure an alcoholic by giving them more alcohol. Everything's so simple when you look at it!

Yay!

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Capitalism doesnt need growth at all, growth is a natural result of it, capitalism is theoretically just the efficient allocation of capital, by far the most capitalist periods of a cycle are recession, negative growth which is simply destroying malinvestment and naturally encourages sound investment due to scarcity of capital.

There are two entities that need growth, Govt (to make good on lies they have previously promised to win elections) and banks to stop the monetary system imploding.

Capitalism clearly has fck all to do with either of these things, the closest you have come to capitalism was 2000 and then 2008, both lasted for about a year until the banks and govt decided to step in and make things worse at some point in the future for themselves and the population

So your saying true capitalism was prevented by the government and banks (VI) intervention? Absolutely, I'd agree with that. Take the crisis in 2008: Socialism for the rich financial classes in the form of a bail out, 'perverted capitalism' for everyone else. They make bad decisions they should pay for it, but instead they were paid off by governments. I guess though that this is just a failing of the present form of capitalism which we are living under and not a failing of capitalism in general..

As a rule all capitalists require growth, without growth they fail. (For ordinary capitalists at least)

The present government wants growth through debt!!! :blink:

Edited by workhou

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I love the way the government just expects families to take on this debt.

'Transferred from the state to families.'

In this climate of instability, where is this 'growth of the private sector' going to come from? They must know something we don't, because what job sectors now in the UK are growing? I can't think of any..only the economy of going into debt. But capitalism needs it's yearly 3% of growth from somewhere might as well be those hard working families.

who else is going to pay it?

government makes nothing itself, it gets revenues from taxes.

martians are not paying, not moonians, or venusians.

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who else is going to pay it?

government makes nothing itself, it gets revenues from taxes.

martians are not paying, not moonians, or venusians.

THE BANKS SHOULD HAVE PAID IT!!!!!!!!!!!!

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Is anyone else wondering if this increased projection of household debt is hiding, between the lines, an expectation that houseprices hence mortgage borrowings will increase? It would make sense for the coalition to be saving now to spend and engineer a boom before the next election. People are not borrowing anymore for new cars or expensive holidays, not many anyway, and it is hard to believe that those falling on hard times can be borrowing enough to cause this sort of upward revision so what are they hiding?

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THE BANKS SHOULD HAVE PAID IT!!!!!!!!!!!!

and where does their money come from?

Ok they are claiming they are owed back fortunes in credit....but these are claims on future earnings...they dont exist yet.

if the earning, ie wealth, is not created in the future, then default and bankruptcy for bankers is the only option....providing governments cease to pretend it is OUR duty to bail them out.

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Debt is someone elses asset.

Ask, why more debt?

Ask, who benefits?

Ask, who receives the interest?

Ask, who are the vested interests that encourage all this debt? Is this democratic? Do we get a say? Who is accountable?

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Debt is someone elses asset.

Ask, why more debt?

Ask, who benefits?

Ask, who receives the interest?

Ask, who are the vested interests that encourage all this debt? Is this democratic? Do we get a say? Who is accountable?

good questions...one wonders why you dont ask the next one.....Why are the taxpayers being asked to pay debts that have defaulted?...the creditors are claiming interest for their "risk"...they took the risk, they reaped and they were bailed.

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and where does their money come from?

Ok they are claiming they are owed back fortunes in credit....but these are claims on future earnings...they dont exist yet.

if the earning, ie wealth, is not created in the future, then default and bankruptcy for bankers is the only option....providing governments cease to pretend it is OUR duty to bail them out.

Exactly they should have 'paid for it' by defaulting/going bankrupt, but of course this won't happen because the banks effectively run the governments..

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In this climate of instability, where is this 'growth of the private sector' going to come from? They must know something we don't, because what job sectors now in the UK are growing? I can't think of any..only the economy of going into debt. But capitfinancialism needs it's yearly 3% of growth from somewhere might as well be those hard working families.

Corrected for you.

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Is anyone else wondering if this increased projection of household debt is hiding, between the lines, an expectation that houseprices hence mortgage borrowings will increase? It would make sense for the coalition to be saving now to spend and engineer a boom before the next election. People are not borrowing anymore for new cars or expensive holidays, not many anyway, and it is hard to believe that those falling on hard times can be borrowing enough to cause this sort of upward revision so what are they hiding?

There are many ways to force people into debt.

Take students. 2 million students at £9k a pop = £18 billion per year.

Keep forcing people to borrow to pay for what were public services and you'll get there eventually.

Every little helps.

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There are many ways to force people into debt.

Take students. 2 million students at £9k a pop = £18 billion per year.

Keep forcing people to borrow to pay for what were public services and you'll get there eventually.

Every little helps.

....debt is the easy way out....everything you can do with debt you can do without. ;)

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Is there any explanation of where this extra private debt is coming from?

If it does not materialise presumably that will have significant knock - on effects on other OBR forecasts.

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http://www.guardian.co.uk/politics/2011/apr/02/family-debt-burden-government-figures

Course the economy could just crater like the moons surface instead. Or the banking system could be abandoned and the money as debt thing consigned to history.

Yep, someone has got to take up the slack when it comes to creating debt money. What makes me laugh is the public support for the cuts, like people think they'll get taxed less or something. No, they'll get taxed more and be more relied on than ever to continue creating the debt.

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Thank God I didn't buy a house, start a family here. Banks/Government simply use these fixed targets as cash machines and seem to be adopting more and more predatory practices.

I'm quickly coming to the conclusion that it's pointless trying in this country. The predatory nature of government/banks, the lack of stability for most people in the workplace and lack of any opportunities make it a complete waste of time. I can't see where any real growth for the people in the country will come from. (Not the same as growth for 'governments') How can the ordinary Joe make a buck? It's disgusting.

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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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