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And so still people blame the debt crisis on the banks, the same people who took out loans to buy nice cars, plasma TVs and that holiday in Kenya. This naÔve opinion that capitalism and the west can exist without borrowing has taken hold. The only way banks can make a profit is by lending at 6% and paying 4% interest on savings. How could the regular punter who flat out blames the banks for the recession afford his dream 170,000 mortgage on his 25,000 salary? The bank is lending you 170,000 pounds guys! Where do you think the bank gets that money to lend you? Right, it invests other peopleís money and takes their interest on their loans and credit cards to do just that. Admittedly the investment banks got carried away in the City when the government green-lighted those dodgy trades that were producing fifty billion a year tax for the treasury to pay for their vote winning social programs but why wouldnít you want your government to create jobs with public money? Trust me, no dodgy derivatives in circulation would have seen the recession only hit early in Blairís reign. The system works if the lender lends and the person who takes the loan or credit card spends within their limits. Yes our deficit is big and the banks were indeed bailed out with 00 billion quid of our money but donít forget we blow 150 billion EVERY year on welfare payments alone, which just so happens to be the gap in those balance of payments. One-in-eight of the London rioters were on Incapacity benefit!
The uncompromising capitalist spin doctor is that man called Ďadvertisingí, the mystic who makes you think you have a hole in your life and this particular product will fill it to make you happy, when all the time you were fine. But if we donít buy stuff we donít buy crap we donít actually need we start to lose our jobs. We are all paid into this system and the protesters outside St Pauls can protest all they like but there is no alternative because human greed and the need to want to have things will always win out. I donít see many poor people in those protesters. I bet they have quite a bit stacked on their credit cards they are not telling us about.
Western debt is basically the three trillion dollars we borrowed to buy cheap Chinese goods and the Chinese has put all the money in the bank and so not buying our stuff. Their middle-class has yet to grasp the brand culture fully and so not decked in Burberry and Gucci like the Italians. Until they spend we are bumping along the bottom forever more. The Tories are straining every sinew to drive unemployment over three million again by chainsawing the public sector and quite happy for it to remain high to control public spending. China and the Far East can make everything for a $1 per hour so our manufacturing base is done for. The entrepreneurs are the only ones who can get us back to two million and we have seen what idiots they are on Dragons Den.
Paying Back debt is what we are all trying to do now; another reason the economy is slowing like a creaky old steam train pulling into the station. Four billion a year more credit card debt was paid off last year than the previous year and only payday loans are on the increase. If you get into the position where you can only borrow from these sharks to pay your rent and put food on the table then thatís beyond my pay grade and I donít know how you can get out of that spiral. I do know you can declare yourself bankrupt far easier today to clear most of the big debts but that a stigma you will have to carry. I think new Labours slackness on welfare allowed people to get comfortable on the dole and so they had more kids and so the debts rose, why we have so many pawn shops and pound stores now on the high street. Blair created a huge underclass that would vote for him so to keep the welfare heroine coming.
Rolling credit for lower interest payments on your credit cards is harder now and banks charging a percentage on balance transfers to deter that. If you can get your debt down that way then by all means try it. It beats a trip to Ladbrokes! I do that all the time and now have just two hundred on one card. My debt level is pretty good, paying the three percent minimum every month on the card and letting my brother deal with the mortgage. Mortgages terrify me. But for young people of today they may never have to worry about them as the average age of the first time buyer is now thirty-one. Unless you have an 18 grand deposit and a 60,000 joint salary you can forget it. But the banks are slowly edging back to their bad habits, only this week yours truly successful in getting a credit card with a two grand limit. Like I said, the banks need to lend to make money and thatís not always responsible lending. I have been bought up well and the money I do owe on my card was run up due to a beautiful woman. Men always get in debt over women and here here to that!
Channel Four recently did a quirky but eye-opening Dispatches special on the Greek debt, the irreverent method of delivery seeing two British workers in Dagenham given a genuine Greek accountant for the week to help them get Greek pay & conditions in England, a bus driver and hairdresser the chosen professions.
The female hairdresser was 54, the average retirement age in Greece. Any workers deemed to be working with hazardous chemicals for more than 25 years are allowed to retire early on medical grounds, her shampoos and hair dyes coming under that category. She quickly retired. These obscure rules are jemmied in by the various unions who are given them as political favours from the various parties in return for their block vote. Not only that, the hairdresser gets to retire on 90% of their salary for the rest of their years. Not bad aye!
The 40-year-old bus driver is also in for a pleasant surprise, his salary of 27 grand a year immediately doubled to match time served Greek bus drivers, many of the same age there pulling in 50 grand a year! Not only that but he got a ticketing bonus, an attendance bonus and 100 Euros a year to buy milk? He too could retire young on 75% of his salary. Its clearly not olive oil that allows the Mediterranean people to live to 100!
The rich also get a fabulous deal, tax evasion how they make hay. The top 14 surgeons in one nice area of Athens managed to declare their income as less than 19, 000 Euros a year, all other work put through as cash transactions and so no tax declared. This is normal practice in Greece as tax dodging is seen as a national sport and you are a mug if you pay it. As far as the people are concerned all politicians are corrupt so why give them money to waste and steal it? The government tried to get the tax back from the wealthy through a swimming pool tax, but only 275 Greeks declaring they had a pool, even though Google Earth mapped 15,000 pools! Locals just bought camouflaged netting and never declared the pools. Those retired hairdressers can also carry on working on the side and not put the jobs though on the tax. The only downside to Greece before the collapse was the dreaded ĎFlaki Lakií, bungs and bribes paid to get the job done. If your car is on jacks after your MOT the garage will expect you to pay a backhander on top of the fee to get the car off the jacks. If you wanted to get your building work finished on time then its brown envelope time. The shadow economy in Greece is extraordinary.
The Greek culture of not paying tax and spending all their cheap Euro loans on public service and not building the private sector is why they are flucked, and itís you and me that have to now pay now through extra tax to bail them out. Similar practices are happening in all the sunshine countries of Europe, the so-called P.I.G.S. Even Ireland didnít charge income tax to workers until their salary topped 16,000 Euros. These guys only joined the Euro to carry on living the highlife and no one can see away that they wonít default on their loans now and so crashing the Euro.