As it's election year, I thought I'd pass of some rather randomised comments, which may or may not find traction amongst my readers. I'm willing to accept that some of my knowledge may be vague, but try and bear with me on the 'philosophy' rather than the 'phacts' of what I write.
Over the past year, I've been listening quite a bit to radio 4, not just for their brilliant Today programme, but to try and decipher the raminfications of the horrible recession we're in the middle of. On most occasions I'd say the shows I listened to had fairly middle-aged panels. Often the shows revolved around economic policies, political change and most interesting to me - the property market. One such article - that a grandchild had taken advantage of her grandparent to the tune of £25,000 in order to put a deposit down on a house was met with outrage by the panel. With most of them patting themselves on the back and saying "we worked for our own deposit, thank you very much!"
They then went on to berate the kid.
Ironic then, that due to there being a 'property boom' for much of their working lives, the price of property has grown so that it is no longer possible for a first-time buyer with an average salary to pay a deposit themselves. If they're a graduate too, with an average level of debt, then it's probably likely that getting more in debt is the last thing they'd want to do. Yet the current home owning generation's assets have increased rather nicely, giving them the disposable income far beyond what their salaries alone would have provided.
One such behaviour, no doubt replicated thousands of times over the past 30 years, is the constant need to want more.
"I can't afford a £300,000 house, but as my current house was worth £100,000 when I bought it and £200,000 now, I'm sure if I buy one for £300,000 then that'll increase too - so when I sell it'll be worth more than the difference."
To fatten their pockets even more, people added conservatories, extensions that took away valuable outside play areas from their kids (and they wonder why they're all getting fatter).
Then people got even greedier. Houses took too long to build. They wasted valuable acreage that developers had paid top dollar for, and in order to squeeze as much out of the land as possible, they took inspiration from the 1960s.
"Flats - oh, let's call them apartments. Then they'll be 'trendy,' - much different to the concrete high rises that were built in the 60s. Yes. These ones have pre-fabricated steel balconies screwed into the side of them to make them look 'chic.' Forget any outside area, just cover it in a car park. But the car park can't be to large - no. Land is expensive. One space per flat, and no visitors spaces. People won't have visitors."
Some of these new places are lovely, (I've lived in a few,) but just as the 60's flats were probably very homely when they were put up - get a few bad tenants, and with a tenant having 6 months to challenge their eviction - it's not too difficult to imagine the same thing happening here.
So, with people happy that they're earning a 'fat wedge' off their property portfolios, the unthinkable happened.
Suddenly, out of the blue, and unprecedented - (choose any) - the crash that (many/some/few/all) economists predicted then happened. People's properties had stopped growing in value - they began shrinking.
Unfortunately though - not yet enough to stop the jibes from the Radio 4 crew. House Prices are still far ahead of being affordable, relative to the average wage, without some help off your parents or grandparents.
Let Radio 4 hate you.
The current government do too.
Quantitative Easing, The Scrappage Scheme, Bailing out the Banks, Unemployment Benefit. Have Radio 4 thanked us for that? Why should they?
The level of debt that Britain is now is means that most of the burden is going to be left with us, and our children, to pay off. Labour aren't proposing major cut backs until after the election. This is just landing us in greater debt. Interest Rates apply to national debt as well as individual debt. As a country we're likely to lose our AAA credit rating, meaning that our rates are going to go up, and the debt is going to grow - and the longer we take to pay it off, the worse it's going to get.
Instead of pointing fingers and backing a single party to take us through this, the electorate need to send a clear message that the debt needs to be handled properly now. Politicians may point to Bankers paying themselves £million pound bonuses, but it masks the issue. Millions are being lost to our economy through interest payments alone. In a recent Cost-Benefit analysis per profession, it's true to say that it might not make sense for us to pay Tax Advisors the bonuses (as they cost the taxpayer £82 per £1) with their ability to help clients avoid paying tax. However, paying investment bankers bonuses, when they're the ones most likely to help carry us out of the mess, seems semi-logical. Getting the money required at the rate required in order to get Britain back on an even keel isn't going to work if we try and pay everyone by the hour.
Just this year, Britain are likely to borrow 12.8% of GDP. That's ontop of our current mountain of debt, and 0.1% more than Greece (who are having a well documented fiscal crisis). There are some difficult decisions to be made though, and cutting costs doesn't necessarily mean cutting jobs. The lower the unemployment figures the better it will be for the country in the long run, but there is much of central (and european) government that could do with a bit of belt-tightening. Cutting cost in one's own budget isn't going to be something that any government will want, which is why it needs to be such an election issue.
What I find most disheartening though, is the fact in comparison to the majority of the world, we are a rich nation. We have a fantastic NHS that should be protected from privatisation and anything that may undermine the fantastic level of care it provides to our citizens. As Charles II realised, investment in Science was something that made us 'Great' in the first place - whilst other countries are up-skilling their workforce and working hard to develop in order to provide a brighter future for their children - whilst Britain is stagnating. To kill a phrase, "think not what your country can do for you, but what you can do for your country."
Investment needs to be prudent, cost-cutting needs to be wise, and we have to elect politicians honest and sensible enough to know the difference.
So next time you hear someone berate the 'youth of today' for "taking advantage," just smile, and get on working hard.