Wednesday 3 December 2008

Living beyond "our" means

George Kerevan is one of the Scotsman's best writers. But he's dead wrong on this one:

The article is behind the subscription wall but this is from the dead tree version:

Of course, a fall in sterling still means an implicit wage cut – it's just that we don't see it in happening in our wage packet. A cheaper pound means the imported plasma television is more expensive, as is everything else that is imported, including food, so our real standard of living has been cut. The charm of this approach is that the pain is spread equitably.
No, no, no.

There's nothing equitable about this at all. The financial crisis has been caused by imprudent citizens, by incompetent bankers and, above all, by central banks acting under the control of economically ignorant politicians.

My mother's lifetime savings are being used to fund her increasingly expensive residence in a nursing home. Mr Kerevan thinks it's equitable for her savings to be depreciated in order to bail out spendthrift citizens and politicians. Perhaps she should have blown the lot.

I'm in a somewhat similar situation. I have no debts and a bit of savings. And it took a lot of hard work to get to this position. I can well remember when my total wealth was about £50.

To sort this mess we need to have a massive cut in public expenditure and a return to sound money.

My friend Brian agrees.

1 comment:

David Farrer said...

Comments made on previous template:

John b 
 
I like your idea but I'm holding out for 40p.

5 December 2008, 18:40:21 GMT
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john b
Depends on how you define 'nationalising'. Some kind of scheme like buying houses that've been foreclosed on and keeping the former owners in situ, quite possibly. Forced nationalisation of the houses of people who're happily paying their mortgages, absolutely no chance in a million years.

5 December 2008, 18:19:10 GMT
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APL
"Why not buy six houses for 50p, and then start a small business with the rest of your savings?" 
 
Whats the odds that before long the government will be nationalizing the housing stock?

5 December 2008, 00:05:04 GMT
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john b
I have no debts and a bit of savings. And it took a lot of hard work to get to this position. 
 
Likewise. But having cash now is an absolutely excellent position, since most people don't. Why not buy six houses for 50p, and then start a small business with the rest of your savings?

4 December 2008, 11:00:41 GMT