Reply to: The stark choice: Increase German debt or save the Euro

[Mich the Tester]

I think the problem is deeper than simply enabling people to buy more stuff to keep the juggernaut rolling. I think there comes a point where pursuing economic growth for it's own sake doesn't actually correlate with an increased standard of living at all, and I think we might be reaching that point in the developed world.

Yes, quality of life is really more important once you have your comfy house, your colour TV and your family car. Incidentally, that's one threat to India and China's growth too.

[sasguru]

where?

Poland I think

[Mich the Tester]

Just noticed that. Yikes Madness

It is indeed madness, but that's what you get when people think the government should protect them against every possible risk they might run in life, from those risks that are understandably difficult for most individuals to deal with like loss of income through long term illness or invasion by a foreign power, to nonsense like checking whether foods are labelled with the amount of calories and vitamins they contain, something which any literate person can find in a book and then estimate for themselves instead of relying on an expensive government agency to hold their hand in the shop.

[sasguru]

42% car sales tax; .

Just noticed that. Yikes Madness

[doodab]

I think the problem is deeper than simply enabling people to buy more stuff to keep the juggernaut rolling. I think there comes a point where pursuing economic growth for it's own sake doesn't actually correlate with an increased standard of living at all, and I think we might be reaching that point in the developed world.

[Mich the Tester]

It does as the Cee'd is made in Europe.

where?

[sasguru]

42% car sales tax; and there we have and example of the 'bloated government' bit of what I said. And of course I'm sure the Kia Ceed is a perfectly adequate alternative, but that doesn't help Europe's manufacturers.

It does as the Cee'd is made in Europe.

[Mich the Tester]

That's what Europeans have been taught to think of as their right. Sadly economic circs have changed.

PS 24K for a focus - fook me, why so high? You can get a Kia Cee'd which is just as good for £11k here.

42% car sales tax; and there we have and example of the 'bloated government' bit of what I said. And of course I'm sure the Kia Ceed is a perfectly adequate alternative, but that doesn't help Europe's manufacturers.

[sasguru]

We can't all have expensive houses AND posh cars AND luxury holidays. .

That's what Europeans have been taught to think of as their right. Sadly economic circs have changed.

PS 24K for a focus - fook me, why so high? You can get a Kia Cee'd which is just as good for £11k here.

[Mich the Tester]

Quite and the German/Japanese economies wouldn't be quite is such good shape.

Personally I think part of the problem for manufacturers is also the inflated price of houses all over northern Europe.

Put it this way; a new, fairly average family car, say a Golf or Focus costs about 24,000 euros here in Holland. That's not much less than the average joe earns in a year. From his salary, he has to pay his mortgage (whichh will cost him about 10,000 a year), food, bills, various kinds of insurance and tax. Not much left for his car, so if he gets a new one every five years or a 2 year old car every few years, given the depreciation he'll be up to his eyeballs in debt after two car replacements. If he doesn't do that, then VW and Ford go bust.

Something has to give; personally I think that if we're going to keep a strong manufacturing sector in Europe we're going to have to give some things up, one of them being the bloated governments we have, the other being the vastly inflated house prices. While people have to borrow five times their income to pay for a roof over their heads, they can't be expected to buy lots of shiny new stuff without taking on more and more debt.

But of course, saying something like this to the Brits is like shouting in the desert, and that change would take a long time involving painful negative equity for lots of people. I'd say to young people looking to buy their first house right now; don't bother. Rent, and wait for a while.

We can't all have expensive houses AND posh cars AND luxury holidays. A collapse in house prices would probably be the least painful thing in the long run as long as current owners can just keep paying the mortgage.

[sasguru]

Wouldn't lots of manufacturers go bust if people only bought what they can afford?

Quite and the German/Japanese economies wouldn't be quite is such good shape.

[Churchill]

Wouldn't lots of manufacturers go bust if people only bought what they can afford?

Oh FFS, remember who you're dealing with here. If SASGuru had the slightest grasp of economics he wouldn't be living in a shed like stig-of-the-dump!

[Mich the Tester]

Bankers are being made the scapegoats for our collective cultural loss of the basic economic principle: only buy what you can afford

Wouldn't lots of manufacturers go bust if people only bought what they can afford?

[sasguru]

And it's interesting how that has been spun to declare this a banker's deficit.

The bankers didn't cause the structural deficit - merely they are no longer making enough money for the tax revenues to be able to cover it.

Yet it is being spun that money is being taken from "hard working families" and "given" to bankers.

Bankers are being made the scapegoats for our collective cultural loss of the basic economic principle: only buy what you can afford

[Churchill]

And it's interesting how that has been spun to declare this a banker's deficit.

The bankers didn't cause the structural deficit - merely they are no longer making enough money for the tax revenues to be able to cover it.

Yet it is being spun that money is being taken from "hard working families" and "given" to bankers.

Bankers (not banks) make money whatever the financial climate. They are the scum of the earth! Rein the f*ckers in!