Wednesday, January 2, 2008

The culture of spending other people’s money

It may be Europe's cultural capital, but the people of Liverpool are paying a high price

"Research by debt agencies in the city has revealed that the average debt of clients seeking advice on personal debt in the north-west city has now hit £50,000 per person – double the sum that was quoted in 2002 and well above the national average. All of the city's debt agencies have reported a marked increase in inquiries during the traditionally quiet Christmas period. And the figures of debt reported in Liverpool are on credit cards alone. With a growing number of the city's residents finding themselves in arrears on their mortgage payments, debt experts say they fear that house repossessions in Liverpool will soar during 2008."

Posted by trough2010 @ 11:04 AM (407 views)
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2 thoughts on “The culture of spending other people’s money

  • This is yet another indication that the economic mirage of the last decade is over. We are heading towards financial meltdown and the system that we have become accustomed to is finished. The whole of Mr Brown’s (and Mr Bush’s for that matter) economic programme has been based on consumerism, and one forged, not on natural and sustained salary growth, but on credit with many subsidizing their unsustainable lifestyles by 25-30% plus. By the same token, greedy, stupid money lenders gambled on a ridiculous notion that property will forever go ever upwards and so broke all the rules by lending people 5,6,7+ times their salaries and creating a housing bubble, which can only be resolved by either salaries massively increasing (utterly unlikely) or properties crashing in value to bridge the gap between what they are currently valued and what people can afford (unavoidable).

    Whether or not we have a housing shortage is debatable, but what cannot be ignored is that people can only buy what they can afford and now the credit crunch has belatedly knocked sense back into the system – alas too little too late, people will no longer be lent the multiple sums that only months ago were so free flowing.

    It should also be borne in mind that the boom of the last decade has coincided with our ever growing reliance and familiarity with technological advancements – e.g. internet, broadband, mobile phones, multi-channel TV etc. This has led to a higher take-up of disposable income. With the coming recession people will be forced to make real choices between keeping a roof over the head, food of the table over subscriptions to Sky, updating laptops, new phone contracts etc. This has serious ramifications to the nature of our economy.

    Retail and Service sectors are also heading for a hammering. People ain’t going to be spending on £3 coffees each morning, takeaways, retail therapy etc.

    It should beggar belief that our politicians, industrialists, economists, and so forth have led us all to the point of economic collapse, but egos and arrogance are in such abundance in these institutions – look at Brown’s own stupidity in creating a debt mountain in a time of plenty, where are the reserves required for when times get rough? – that this was a tsunami waiting to happen.

    Batten down the hatches – you ain’t seen nothing yet!

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  • Excellent comments Daniel – couldn’t have put it better myself.

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