Britain Entering Austerity Death Spiral

[Jesus_of_Nazareth]

That is just the boost the UK economy needs

300,000 skilled and trained people should really help in the Private Sector. Unless their skills are of no actual use to man nor beast

[Schneibster]

Still listening to the austerity goons, huh? Bummer.

Pretty soon the neds will all become teagaggers. Just hasn't caught on over there yet.

[Schneibster]

Paul Krugman has a column today titled "Bleeding Britain." The title is quite appropriate, particularly when casting Cameron as a barber.

Eventually, they might figure out that if you lay off 300,000 people there will be less consumers, and less consumers means less demand, and less demand means less production, and less production means less jobs, and less jobs means more layoffs, and more layoffs means less consumers, and less consumers...

Duh.

Read all about it.

[Jesus_of_Nazareth]

Paul Krugman has a column today titled "Bleeding Britain." The title is quite appropriate, particularly when casting Cameron as a barber.

Eventually, they might figure out that if you lay off 300,000 people there will be less consumers, and less consumers means less demand, and less demand means less production, and less production means less jobs, and less jobs means more layoffs, and more layoffs means less consumers, and less consumers...

Duh.

Read all about it.

Given that Britain imports so much probably won't have much effect on production. An impact on retail for sure (many folk not choosing to not spend - just no longer have the money, cut VAT all you want - no cash = no shopping).

Agree about the death spiral thing - but for the whole economy, no reason why it can't be broken - but I strongly suspect won't be.



The answers? Many and varied but economically top of the list has to be land / property reform.......it prices workers out of jobs and makes companies who produce stuff less competitive (with foreign competition). .....and generates huge costs to the Govt (which means high taxes) due to th Landlord subsidy of Housing Benefit.

Socially Britain desperately needs reform of the legal system (to make cheaper) and also the judicial system (including more Prisons ).

You don't have to be Einstein to understand the vested interests in keeping the Status Quo - but that simply means the wheels will fall off.

[Schneibster]

You guys had a housing bust that started before ours did, IIRC. Do you have many people underwater? (Just in case: underwater means they owe more on the mortgage than the value of the property.) That's a huge problem over here, and one no one in our government has even started to think about it AFAICT.

[MrJonno]

UK housing problem is the our number one problem through most people don't realise it. You basically have people born to today who havent a hope in hell chances of leaving their parents home before they are 35 but will have plenty of money to buy tv's and beer. This is due to excess green belt zoning where the middle classes who already own a house do everything they possible do to prevent anyone else getting one to keep their own prices high.

Average house prices are around 8 times average earnings with mortgages only 3 times avaliable, renting cost more than buying (yes thats right rent costs more than mortgage payments)

[Schneibster]

Well, that's a bit of a drag, but what about underwater mortgages? Did housing prices not fall as far there as here? Sounds like it, but I couldn't tell from your answer.

[Horwood Beer-Master]

...You basically have people born to today who havent a hope in hell chances of leaving their parents home before they are 35...

Hey I'm only 30 and I live on my own! - In a house my Dad bought for.. ...OK, I see your point.

[MrJonno]

Well, that's a bit of a drag, but what about underwater mortgages? Did housing prices not fall as far there as here? Sounds like it, but I couldn't tell from your answer.

Yes they have fallen but not even remotely close enough to make a difference (and if they did it would bankrupt the country).
Most of Britain is fields with nothing of any value growing on them paid for by farming subsidies and supported by people who don't want anyone else living in nearby

[Schneibster]

So instead of underwater mortgages you have a housing crisis. Because housing prices were artificially supported?

[Coito ergo sum]

But, there are bright sides in Britain...

Heathrow has never been more efficient! Passengers' glee as border agency strike SPEEDS UP passport control
'It was the fastest I have ever come through passport control'
Passengers had been warned they could face two or three-hour delays
400 admin staff re-deployed with iPads to assist passengers with flight information and free food and water
Civil servants including airport vets believed to be manning borders
Fears terrorists and criminals could sneak into the country and exploit predicted chaos
No delays or problems reported on ferries at Dover
More than half of England's state schools close
Thousands of NHS operations and appointments cancelled

Read more: http://www.dailymail.co.uk/news/article ... z1fDxpeBzT

[klr]

So instead of underwater mortgages you have a housing crisis. Because housing prices were artificially supported?

Aha. "Underwater" = US-speak for "negative equity". Now I get it.

If you want to see a real housing crisis, try Ireland. We had a mega-housing boom, and are now suffering the consequences.

Prices weren't "artificially supported" in the UK or Ireland in any narrow sense of the term. If anything, it was a lack of regulation and long-term decision making in Ireland that allowed the property boom to spiral out of control. Action should have been taken to keep house prices down.

[klr]

But, there are bright sides in Britain...

Heathrow has never been more efficient! Passengers' glee as border agency strike SPEEDS UP passport control
'It was the fastest I have ever come through passport control'
Passengers had been warned they could face two or three-hour delays
400 admin staff re-deployed with iPads to assist passengers with flight information and free food and water
Civil servants including airport vets believed to be manning borders
Fears terrorists and criminals could sneak into the country and exploit predicted chaos
No delays or problems reported on ferries at Dover
More than half of England's state schools close
Thousands of NHS operations and appointments cancelled

Read more: http://www.dailymail.co.uk/news/article ... z1fDxpeBzT

It's like the story of the bus service that never stopped to pick up passengers to that it could stay on schedule.

[Schneibster]

But, there are bright sides in Britain...

Heathrow has never been more efficient! Passengers' glee as border agency strike SPEEDS UP passport control
'It was the fastest I have ever come through passport control'
Passengers had been warned they could face two or three-hour delays
400 admin staff re-deployed with iPads to assist passengers with flight information and free food and water
Civil servants including airport vets believed to be manning borders
Fears terrorists and criminals could sneak into the country and exploit predicted chaos
No delays or problems reported on ferries at Dover
More than half of England's state schools close
Thousands of NHS operations and appointments cancelled

Read more: http://www.dailymail.co.uk/news/article ... z1fDxpeBzT

Yeah, boy oh boy those austerity measures sure are popular, huh?

[MrJonno]

Prices weren't "artificially supported" in the UK or Ireland in any narrow sense of the term

Can't speak for Ireland but in the UK that is nothing remotely approaching a free market in housing or more precisely land. The so call Green Belt (or more accurately stop the wrong sort of people living nearby) is what makes housing valuable