As most readers are aware, Don’t Call Me Dave is not the biggest fan of LibDem Prime Minister David Cameron. However, in a speech which Mr Cameron was due to give to the Conservative Party conference, DCMD is in full agreement. What a pity that the Prime Minister chickened out and changed it.
In what is now being described by spin doctors as a misinterpretation, the original speech called for householders to pay off store and credit cards because “the only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.”
Unfortunately, Mr Cameron gave in to pressure from the retail lobby and dropped this section from his speech. As Margaret Thatcher would have said: he’s frit!
The simple and undeniable truth is that we are all spending beyond our means, individually and collectively.
It is very easy to place the blame for the current economic crisis on greedy bankers, but they are not the only culprits. Gordon Brown is partly to blame for his irresponsible and inflationary expansion of the monetary supply which reduced the cost of borrowing, creating an artificial boom. But we, the people, must accept our share of the blame also. Nobody put a gun to our heads and forced us to borrow more money than we could afford to pay back.
The banks were utterly reckless in issuing credit cards like confetti, but consumers were equally reckless for accepting them. It was insane for banks to grant mortgages of 125%, but we were insane for borrowing more than the asset was worth. You did not need a degree in finance to realise that this could only ever end in tears.
House builders now sell their new homes with fitted carpets and kitchens and all the so called mod-cons. If buyers think about what they are doing, they will come to realise that they are taking out 20 year mortgages to pay for a washing machine. They will still be paying for it long after it has gone to the great laundry in the sky!
The public are not alone in this cavalier attitude to credit. In the People’s Republic of Barnet, the council has borrowed money to resurface the roads with repayments spread over 20 - 40 years. But the roads will require resurfacing again in about 10 years time. Future generations will be left paying the bill for something they never had. Government PFI contracts are nothing more than credit time bombs providing short term gains for politicians, to be paid back by future generations.
Our forefathers did not rush out to buy the latest consumer goods on tick. They knew very well that you only bought what you needed and what you could afford. The latest flat screen TV might look very nice on your wall, but if you haven’t got the money to buy it, then you will just have to make do with last year’s model.
This explosion of cheap credit has resulted in massive over consumption by the West. The planet is being systematically raped of its natural resources to fuel our insatiable appetite for the latest gadgets and gizmos. We are not only risking economic collapse by our financial profligacy, but an ecological disaster as we consume precious resources at a faster rate than nature can replace them.
The Bank of England has today announced another round of quantitative easing - or printing fake money as it should be properly known - to the tune of £75 billion, in an attempt to stimulate the economy. This is on top of the £200 billion ‘created’ by Labour. The Chancellor of the Exchequer, Boy George Osborne, is supposed to be a history graduate. Did he not learn about German hyperinflation in the 1930s caused by printing more money? Or post war Hungary where prices doubled daily? Or Zimbabwe, where just 3 years ago, inflation rose to more than 2 million per cent?
The politicians and bankers would have us believe that the solution to the economic crisis is to spend money that we don’t have to buy goods that we don’t need. This might help retailers in the short term and make the government popular, but the long term consequences will be catastrophic. Of course, Cameron and his cronies won’t care about that. By the time the shit really hits the fan, they will have long since left office and the next generation will be left to pick up the pieces.
Mr Cameron was correct when he said that we can’t borrow our way out of a debt crisis. The swivel-eyed Trots who think otherwise should heed the succinct advice from the gentleman in the video below.