Simplistic thoughts on individual Credit Crunch responsibility.

Saturday 1489 – 14th January 2012

A more serious post this week.

So each and every one of us in the UK is carrying a huge amount of  foreign debt. The figures depend on which website you are looking at but is reckoned to be over £100,000 per person. What does seem to be agreed on is that in the UK it is staggeringly high. ( Similarly in other parts of the world as I’m sure my followers will testify)  If you want to read something about this try  here  or about the recession  here   (  just a random example of what’s been written )

The blame is all attached to Banks and Governments but is that entirely just?  Don’t think for a second I fully understand how the world got itself into this financial mess, as I find it bewildering and these things are always complex but here are some of my rather simplistic thoughts on what I see as part of the problem.

It seems to me that successive UK governments have promised people things which people are not prepared to pay for and have increased borrowing to fund these things as no politician wants to lose elections or popularity do they?

Everyone wants better services but no-one actually wants to pay for them. Costs in the NHS for example continue to rise as more and more expensive treatments become available and everyone wants great services but do people want to pay more tax in order to secure them? Likewise our services for older people have never been worse but do people want to pay more tax to make sure they are better?  It appears to me that they don’t.

So why don’t we want to pay ?

I think part of the reason is because we have become a throwaway greedy consumerist society in which individuals perceive they need more and more things; latest phone , latest camera !, bigger and bigger TV, faster and smarter car, holidays every year ( sometimes several times a year)  I have known couples who would not get married until they had bought a house, newly carpeted it throughout with all new furniture… We equate happiness with having things now !even though in our hearts we know that does not fulfil us.

Much of what is happening now with credit has a long history which has slowly brought us to this point.

During the war years and post war ( until the end of rationing and beyond) people in the UK largely did without and there was most certainly an ethos of you worked for what you had and you didn’t buy something until you saved up to get it.

When work, money and goods started to become available (arguably partly rebuilding and repairing post war damage) parents wanted their children to have what they hadn’t been able to have during those very lean years. There was a genuine feeling of happiness being able to give your children things as described by some old people I have spoken to about this ( I’m a Social Worker working with older people).

Unfortunately the side effect of this natural over compensating has been the gradual production of a more and more greedy must-have society; not helped by massively over inflated housing costs.

It makes me crazy that few individual members of society seem to want to accept any responsibility for the so-called “credit crunch” and arguably the invention of the credit card has been one of the worse inventions of all time. Do people think they are spending real money when they use one?  Unfortunately credit cards make it so easy to have things now and think ( or even not think) about the consequences afterwards.

It’s easy to blame the bank for offering credit cards to people so freely but tell me what business doesn’t do the same when it sees consumers eager for something it produces?  People have choices.

Here’s a few figures for you – taken from here – 

  • “The UK average for personal debt is £7,388.”
  • “The data looked at the average owed  on debt such as credit cards, loans,  store cards and overdrafts.”  so not mortgages
  • “One in four people in Britain are using over 40  per cent of their wages each month just to pay off non-mortgage debt”
  • “Total UK personal debt at the end of July 2011 stood at £1,451 billion.”
  • “UK banks and building societies wrote off £8 billion of loans to individuals in the four  quarters to end Q2 2011. In Q2 2011 they wrote off £2.06 billion (£1.15 billion of that was credit card debt). This amounts to a write-off of £22.54million a day”

Makes staggering reading doesn’t it and there’s more on the website.  I don’t know if these figures are completely accurate but would you be surprised if they were? I wouldn’t .

Is it too late to go back to a society that saves for what it wants and is satisfied with less? 

It looks like society will have no choice.

                            —————————————————————————–

I have to end on a silly note to cheer myself up a bit and hopefully you all too.. I took the photograph below in Cambridge on Friday.. I had noticed where the busker was sitting and waited for the right moment when his mouth was in just the right position…had to be quick though!… I hope it makes you smile.

OPEN WIDE  ——

See you on Photomania during the week or on here next week.  Saturday Girl signing off. Hope you have a good week.

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18 comments on “Simplistic thoughts on individual Credit Crunch responsibility.

  1. munchow says:

    I think you assessment is quite right. We have indeed become a throwaway greedy consumerist society. Each and everyone has a responsibility for what is happening, but at the same time it’s something that is strongly encourage by the big corporate world. Their greed seem only endlessly stronger that our personal greed. And the way the corporate world can play with the rest of the world is just amazing! The deregulated market is not for the better for the majority of people I believe.

  2. Steve Clark says:

    The truth is actually quite simple: both as individuals (not everyone of course but on average) and as a nation we use, consume, throw away more in goods and services, considered as monetary value, than we produce. To maintain the level of consumption we have become accustomed to and now seem to regard as our right, we have to borrow. Waste now; Pay later.

    The Banks were happy enough to facilitate this because, in the end, it meant a few influential people got very rich. The down-side was that their prosperity made the situation for everyone else that much worse but what the hell.

    Governments should, of course, refuse to borrow and confine us to a level of consumption equal to or less than (on average over a reasonable period: periodic variations can be accepted) the value of what we produce. They don’t do so because it would be a sure route to oblivion via the back benches. We call this democracy and though it may (to lapse into cliché) work better than any alternative, in the final analysis, it is flawed. As a species we are too greedy, status conscious and self-centered to survive under democracy; what we need is a good dose of Plato’s Philosopher Kings, or failing that Despotism, though preferably benign, to impose some unpopular, though pragmatically neccesary, discipline.

    Members of the Government are also probably amongst those who got rich on the back of everyone’s excessive borrowing. It is a corrupt world. (Not for publication, that. I might get sent to the Tower)

  3. mj monaghan says:

    I wish I could say that I haven’t borrowed, but alas, I’m one of those people who likes to get new things sometimes. Not terrible about being materialistic, but we have our share of debt. Trying to be better though.

  4. I hold to my Grandma’s adage; “Never a borrower nor a lender be.” I was brought up to believe that being in debt was something to be ashamed of. I have never posessed a credit card, we don’t have any personal debt and have a small mortgage. This makes us true oddities amongst friends. That and the elves at the bottom of the garden 😉

    • hellenjc says:

      Agree completely Ziggy.. There’s nothing wrong with borrowing when you REALLY have to but now it seems the complete norm just because you want to have something ( I know I am generalising horribly here as I’m sure there are many who use a credit card just to get from one month to the next)…don’t get me wrong I do have credit cards but alas for the banks they don’t get a penny of interest from me and never have.. Poor things !!!!

  5. France is in the same kind of situation although, I just learned today that we are among countries that has the most money in people’s saving accounts (but this doesn’t concern everybody … a lot of people are in debt, unfortunately).
    But there is another problem … we destroyed most of our industry or moved it to China, India … and other countries where poor people work for only few Dollars per day.
    So to me, it looks like greed is unfortunately present at different level of the society …

    • hellenjc says:

      Thank you for commenting Mathias, I think manufacturing throughout Europe is in the same boat.. Indeed the West clamours for ever cheaper clothes and goods. Often the only way to get them is to pay poor people in other countries a pittance to produce them.. It’s a real dilemma..

  6. scillagrace says:

    When you realize this credit system is absurd, how do you respond? I got out of it at my first opportunity. Since selling my house one year and four days ago, I have no debt. I suffer the debt my children have…student loans. It’s all made up, though, a fabrication, a concept. Can’t we un-make it, then? That’s what I wonder about….

  7. bananabatman says:

    I’m sure that what you have said here is echoed by many people of my age. We saved for what we wanted and bought it when we could afford it. We would never have made the finance ‘industry’ happy though.

  8. Couple of points:

    It’s suicide in the UK for a political party to advocate raising taxes and that’s very silly. It needs someone have the courage to offer us an improved health service in return for a tax rise but no one seems to want to do that.

    I worked in the banking industry for a while some years ago and the management was rather amateurish at best and some of the worst I’ve witnessed. So I’m not surprised that industry got into trouble.

  9. mimo khair says:

    it is frightening when you think about it

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