Bank of England, BBC, BBC News, Coalition, Conservative, consumer, debt, deficit, Democrat, disposable, economic, economy, false, falsify, George Osborne, government, Governor, help to buy, housing bubble, income, inflation, interest rate, Lib Dem, Liberal, Liberal Democrat, long term, Mark Carney, Mike Sivier, mikesivier, mortgage, national, people, personal, politics, recovery, Resolution Foundation, seven per cent, social security, taxpayer, Telegraph, Tories, Tory, underwrite, unemploy, unemployment, Vox Political, wage, welfare, Workfare
It is surprising that they don’t seem to think we can make the connections.
Two articles have leapt from the national media to trouble us this week. The first, in the Telegraph, states that the economic recovery that has made George Osborne so proud is built on mounting consumer debt and a housing bubble.
(This is something that has been known to us for several months, in fact. Osborne’s ‘Help to Buy’ scheme is the principle cause of the bubble, and it was recently revealed that there is no way to slow it down. Let’s not forget that the taxpayer is underwriting the scheme – so when the bubble bursts we will have to pay both as individuals and as a nation!)
The second article is on the BBC News website, which tells us that up to 1.4 million extra households could face “perilous” levels of debt when interest rates begin to rise – in addition to the 600,000 families already in that situation.
(It adds that mortgages are the largest source of household debt.)
Vox Political has long held the belief that the Conservatives have been trying to increase personal debt. Whether the plan was to decrease the national debt in this way is debatable as the deficit has plateaued at around £120 billion for the last few years.
When Mark Carney became governor of the Bank of England, he said he would not raise interest rates until unemployment falls below seven per cent – which might provide a bit of breathing-room for those having to deal with mounting debt.
However a few months ago, at the Conservative conference, we heard that George Osborne wants to falsify unemployment figures by putting the long-term unemployed on Workfare indefinitely.
If a person is put on Workfare, they are removed from unemployment statistics, even though they only receive social security payments for the work they do.
We already know that figures show a larger fall in unemployment than commentators had anticipated, so it now stands at 7.4 per cent, according to official statistics. Putting hundreds of thousands more people on Workfare should cut that figure below Mr Carney’s benchmark.
Meanwhile, household debt is due to rise to 160 per cent of income by 2018, partly because wages are dropping in comparison with inflation. The number of households using half their disposable income to repay debt could rise from 600,000 to 1.1 million if interest rates rise to three per cent (according to the Resolution Foundation, as quoted in the BBC piece) – and to two million if rates hit five per cent.
In the light of this information we must ask ourselves: Is this a Tory trap? Are they trying to create conditions in which more people on low or middle incomes become indebted to the rich, just by fiddling interest rates?
What do you think?
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Difficult to disagree Mike – Terrifying
Yes, most of us have seen it coming for a long time and it’s extremely worrying. One way to get the government to collapse though is to turn in around and just stop paying mortgages, bank loans, credit card payments, council taxes, water rates, electric and gas bill etc.
Can you imagine what would happen then? It’s heading that way anyway, but if we do those things it would bring the house of commons down!
Mike Sivier said:
That sort of thing would have to be very carefully and cleverly organised. Also I would imagine it would be best to do it for a limited period of time, but warn that the activity would be repeated and the period would grow longer, if the government did not relent and go back to sensible policies.
Terry Jager said:
That is the only way to burst the bubble, but its a no win situation for the home owner :- keep paying & face the debt spiral of inflation or don’t pay & get repossessed + default fees .If you find yourself in the situation of over-stretched finance by mortgage & inflation sell if you can before its to late Don’t get caught in the debt trap. Neither this or the next government will relent this policy ,we were lucky the last time 1989 (ish) inflation was around 17% we scraped enough to pay off in one go (courtesy of family whip-round) A mortgage today in Britain is almost like going to the bookies -its a gamble ,with Westminster policy’s as they are
You’ed need enough people to stand together. One person doing it would just get jailed, but when one million or more did it at once, the government would be in trouble.
Mike Sivier said:
I’ve had the following tweet from Paul Calland (@quiteposhscouse):
Indebtedness is the aim…no employment rights, welfare &security of tenure +access 2 law/health/higher education 4 rich only.
There are so many links people can make if they read enough. But few people have the time, as they very well know. For example a dear friend asked why they are killing the NHS- the answer is clear: the NHS preserves- ahem- to quote Lord Freud ‘stock’ levels, but intense mechanisation and IT means we need far fewer stock, education as well: indeed whilst an educated, healthy population just a few years ago was key to keeping wages low and taxes rolling in, now it’s just more people sitting ubnemployed, hungry, cold and thinking about what if.. : the last thing they want! So education focuses on the already middle classes (AKA ‘themselves’) and the rest is left to rot; ditto the NHS and disability provision. Heck, you need a degree to navigate the disability process these days- and as someone who has to do that, and has a relevant degree and still struggles / marvels intermittently at the complexity, I am not joking! We must all open our eyes to the bigger picture, to joined up thinking. The poor is surplus to requirements and with 3d printers etc it will be more and more the case. I am no luddite- after all I am typing this on a PC whilst my son plays on my tablet and my husband is off working at his technology company- but it is reality. On a personal level teach your kids to plan well: look at advances and consider how to work around them- think CAD Design over assembly or crafts, for example, catering over the care sector (soon to be staffed only by workfare people, surely?)- but on a larger scale, when you hear new policies build them into the PLAN: nothing exists in a vacuum and policy most of all. As a highly qualified person in a care based profession myself I watch roles disappear daily to under trained volunteer ‘recruits’, be aware.
And whilst I understand the idea of civil disobedience and stopping paying taxes / council tax, you only have to read the cost cutting proposals of councils to see who would really lose: think anyone receiving social care, special education, school improvements, jobs for the lowest paid (read the proposals on Newport City Council Website as an example)- it just fires them ammunition. The only really useful tactic is to shout, question, and be heard. Be the pin that bursts the balloon.
Smiling Carcass said:
Osborne is either a twit or very clever- I think his advisor’s have the intelligence, he carries out their suggestions.
I understand that when asked what 1 + 1 was, he answered ‘Eleven’.
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Val B. said:
Sometimes I wonder, that over time, and I mean a long time, the aim is to engineer the economy in order to return us to a type of fuedalism, whereby land and property will be in the hands of the ruling elite and corporations, and the middle class will gradually disappear due to their property being repossessed if it is not owned, or losing it to care costs in old age therefor preventing younger generations inheriting.
Received a copy of your book for my birthday. Brilliantly analytical – great stuff!
Mike Sivier said:
Thank you for the kind words!
Big Bill said:
Land is already mostly in the hands of the ruling elite and corporations They get given huge grants for it from our taxes too, this in the era of the bedrom tax.
totally agree that their aim is to take over all the property, buy uprepossessions cheaply and then rent them out to yhe plebs who can no longer afford to buy
That’s exactly what it’s about, I would say it’s not feudalism but neo liberal slavery. What you describe has already happened, that look at who buys up this repossessions, Lord Gow’s son, (Lord says it all really) his father was the minister who pushed for the council sell off under Maggie, he owns rakes of ex-council houses in London, now all rented out. It’s blatant theft of public money into private hands.
I’ve been in China for a few years and many intelligent people have been saying that’s the aim there. The middle class there is already feeling the pinch and it, the new middle class has only just started.
Jayot, like the idea of a debt strike.
Perhaps they are ruining the economy for when they get voted out?
Folk used to say that about Labour…
LeonC (@leonc1963) said:
My mortgage is already high enough and am feeling the pinch now with the rise in te cost of living so if interest rates go up I am done and my home will have to be sold putting me into the social housing sector
jeffrey davies said:
listen to the Kaiser report should open peoples eyes but then do they really want to now they killing us off
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interest rates will not be going up for the next 2 years at least and I’ll probably be the first to let you know when they do as i have close contacts within all worldide banking circles and things are not as they seam with the UK economy irrespective of what the press says or the government
the debt in this country is vast and will never go into the black that you can be sure of and only a fool will believe otherwise
Mike Sivier said:
That’s not the issue though, Nick – it’s that the Bank of England may raise interest rates after unemployment drops below seven per cent.
unemployment is nowhere near 7% the only time it’s at 7% is when the government wishes to be at that level ant that’s at the next election
the governor of the bank of England wont be fooled thou when it is at 7 % and only if he feels that to be correct will the interest rates go up plunging thousands to default on their mortgage
i think he will not put them up for that reason alone this country would go bust very quickly with very severe debt management from hosing and a very week banking structure
Mike Sivier said:
If he didn’t stick to his words when official figures suggested seven per cent, I have no doubt that the Tories would put him under great pressure to do so. Best thing is for everyone reading this, who has a Tory MP (or a Lib Dem MP, although this will be less successful), to contact them and say you know what is going on, you know what it will cause (and say what it will do), and that this is a very courageous vote-loser.
Graham Deer said:
another rip off idea by a crooked goverment that does not give any thought about the population just as long as they are filling there own pockets.
Joseph Smith said:
Largely, I agree Mike, however the flaw in the debate is the volume of land held by wealthy landowners measured against the total land mass it’s a large percentage. And as some has already pointed out the wealthy ones do get generous tax breaks at our expense. We would have to start by nationalising parcels of land owned by wealthy people perhaps starting with the Royal family who own large parts of the capital. Then mortgages need to be cheaper to compete with rents. Also there are tens of thousands of houses already on the market so why is money not given to councils to by these properties and rent them, more rentals available so rents reduce, councils increase their asset base.
Big Bill said:
The Queen actually owns the country. I believe she owns Canada too. She’s known as the superior owner. For instance, we know Prince Charkes owns a lot of land as Prince William’s recently in the news as he’s having to learn some land maintentance prior to one day inheriting this land. Prince Charles is the owner of the land, true, but the Queen owns it more than he does, and she’s said to be the superior owner. We aren’t used to these ideas but they’re there. If you rent your property you’ll be aware you’re a tenant, but you probably won’t be aware that if you buy your property you’re still a tenant, notwithstanding you won’t be paying rent, as title remains with the Queen.
Big Bill said:
… and mortgages, God, are mortgages just the biggest scam out there! You spend most of your working life working to pay interest on interest on interest (compound interest) on a so-called loan which never happened in the first place! How do I know? Because we can deduce it from what’s been publicly said by financial luminaries such as former BofE Governor Lord Mervyn King, his former deputy Paul Tucker, now Sir Paul (I think) as he was in the Honours list, and from Lord Adair Turner, former head of the Financial Services Authority, all of whom have stated into the public domain that banks don’t make loans, instead they create new money in the form of credit in the account of the ‘borrower’. So, when that ‘loan’ appears in your account it hasn’t been transferred there from anywhere else, it’s new money that’s just come into the world! Given that we have a central bank which can create money for free, why are we allowing the private banks to continue with this completely unnecessary scam? Why isn’t the central bank supplying mortgages at little over cost if necessary, cutting the entirely unnecessary private banks out of the equation altogether? The answer would seem to be that with the full cooperation of governments we’re milked, pure and simple. We are farmed.
Reblogged this on Beastrabban’s Weblog and commented:
This is a truly alarming post because of Mike’s predictions that household debt is going to rise, and that Osborne plans to put the long term unemployed permanently on workfare, thus taking them out of the official unemployment figures. The immediate result of this will be a depressed, frightened workforce of people, who literally cannot afford to be out of work in case they lose their property and the roof over their heads. The other result of this is the creation of a permanent pool of practically unfree labour, composed of people forced to work for a pittance, that can easily and arbitrarily be removed by benefit sanctions. The ultimate result, if this continues, will be slavery.
Very many bloggers, including myself, have pointed out that workfare itself constitutes a form of slavery or forced labour. It was used in by the Third Reich to falsify the unemployment figures there, though the Nazis only limited compulsory labour service to six months or so. They had real slaves in the form of the Jews and Slavs that they could work to death, instead of the civilian unemployed. In the ancient world exploitative levels of debt were also the cause of slavery, as families saw rich merchants seize their children for loans they could not repay. Both the Hebrew prophet Amos in ancient Israel and the great Athenian lawgiver, Solon attacked and condemned this form of exploitation, and attempted to outlaw it. As for workfare, this will create a class of helots. These were the state slaves in Sparta, who performed the menial work for their masters. Osborne’s plans to increase debt and expand the workfare programme hasn’t gone as far as the reintroduction of real, chattel slavery just yet, but it’s coming increasingly closer. In this instance it’s highly ironic that Von Hayek, from whom so many Tory policies are derived, gave one of his books the title ‘Roads to Serfdom’. There is indeed a road to serfdom, and it’s through his extreme free-market economics.
Mike Sivier said:
Here’s an excellent comment from Jean Casale on Facebook: “I am of the opinion that this government is not being irrational. They know exactly what they are doing. They are in fact resorting to genocide.
“’Generally speaking, genocide does not necessarily mean the immediate destruction of a nation, except when accomplished by mass killings of all members of a nation. It is intended rather to signify a coordinated plan of different actions aiming at the destruction of essential foundations of the life of national groups, with the aim of annihilating the groups themselves. The objectives of such a plan would be the disintegration of the political and social institutions, of culture, language, national feelings, religion, and the economic existence of national groups, and the destruction of the personal security, liberty, health, dignity, and even the lives of the individuals belonging to such groups.’”
the only main problem with the conservatives is that just like in Russia people react in different ways in a given situation
if people think that the governments main aim is genocide for certain groups of people then the fallout could well be very damaging to the way of life for everyone who lives in the uk rich and poor
Terry Jager said:
Nick that is possibly the most astute comment so far , very difficult to predict the when & speed of such a reaction ,all of which help’s to explain the raft of changes to our legal system & social descent all but silenced in the mainstream media
Jean Casale’s comment seems very accurate to me ,this current direction (and speed of it) seems too well managed to be anything but intentional ,A triage approach in a social war so to speak .with no end in sight from any direction time will tell .
thanks terry 🙂
The main priority for the country or indeed any country is to feel safe so it’s imperative this government is removed from office ASAP
They have caused more grief since 2010 when they came to power then any other government before them and are a major blight to the security of this country with their seveve alienation to many groups of people not only those that live here but worldwide
labour would fair better but still well short from my ideals of leadership
Reblogged this on seachranaidhe1.