Most people don’t do ‘economics’ – but actually quite a lot do end up running a budget of some kind – household, departmental and so on. Of course,we can’t print money to make up for our blunders without the long arm of the law venturing near our shoulders.
The question my partner asks when I go off on one when media coverage sticks in my craw is ‘who owns the debt’? This is a very Nietzsche-like question, as in the end debt has to be enforceable, and this makes it a police matter, much as one hopes that we don’t have police doing evictions. The same principles that apply at Dale Farm apply in respect of debt. If people won’t pay up the final resort is ‘sending the boys round’.
We have never managed to get rid of loan sharks (look at all the ads now for ‘payday loans’ and see if you can spot the interest rate at 2000% plus in the small print). Their connections with banks are close. All kinds of “specialists” are players in dodgy debt, including government debt, your debt and pretty much anything that can turn a profit faster than day-to-day business. At the bottom of it all you will find such in-consequence as the suicide fashion that has killed a quarter of a million Indian farmers in very recent years. Were they sold suicide insurance as I’ve seen included in Japanese loans?
We may like to think we have rid ourselves of the miserable exploitations found in ‘wog countries’ (what else are they in the mind of those who don’t care about these deaths?) – but they have reached Iceland, and even here credit card and other unsecured lending is being pursued by securitisation against property.
The truth on who owns debt is simple. It’s owned by whoever can send the police round or the army in. Britain’s government debt is 35% foreign owned – does this mean the Raving Loonies (who had a policy of selling Britain to the Arabs and giving us equal portions of the cash) got in when we weren’t looking?
We aren’t in the suicide misery of rural India yet. But have a think about the cost of a reasonable time at university working only vacations is about £50K and in the 5 years of extra study you have lost maybe another £80K – £130K is about a mortgage. You start paying back on £21K – which would get you a mortgage of about £60K. We are thus loading many of our kids not only with serious debt by a bigger opportunity cost – and both are bigger than a sensible 30 year mortgage that would not buy a house anywhere in the country. This system is as broken as the grim Indian farming debt system.