The People Pay

While the Bankers and The Stock Brokers lived a life of bonuses based on a world of greed that never existed and the world seemed right. Well that is how the Government saw it, until the world financial markets crashed when the greed bubble finally burst and reality kicked in, and now look who is paying.

In today's autumn statement a the Government, which many people feel have lost control of the economy, was forced to acknowledge the hard facts, that greed has bleed the country dry and another recession is around the corner. The Government's own official independent forecaster, the Office of Budget Responsibility, have said this year had been the toughest on disposable household budgets since the end of the Second World War. It went on to blame this on rising food and energy costs, which have dented household spending plans. What it left out is that these rising costs have been caused by the Governments fiscal easing which is nothing more than a devaluation of the currency. The more the Bank England use this measure the more inflation and energy prices will rise. The fiscal easing has cost us dear already and means the pound in your pocket is worth less now than it was in the past.

We are all now paying for economic policy that started over thirty years ago with the mass sell off of the council houses and the right to buy. The government at the time invested the future of the economy into house buying and in so doing gave power to the banks. It helped create mood of buy now and pay latter and the banks provided the money to do this. It lead to unsuitable growth over the decades that followed with many of us borrowing money we couldn't afford to give back if hard times hit. When they did because of the banking crisis from over lending and high risking taking we find the bubble has burst and we are all in the mess that has been left behind it. So what is the governments solution now, affordable housing and more people borrowing money they might one day find they can't repay. It will just be another cycle of boom and bust. It might dig us out of a hole now until we fall into the next one.

Maybe the building industry can help us get thing back on an even path. Rents are high for people that can't afford to buy or can't take the risk of it all going wrong for them. Rents are high not because there is a shortage of houses to buy, it because there is a shortage of houses to rent caused by the governments policies of thirty years ago to sell off rented houses at cut down prices. What we need is house people can afford to live in without being having to be in debt for years to come because they owe some bank loads of money.  What is need is houses owned by the councils with regulated rents that brings the private sector rents down in line with peoples incomes. This has to be a gradual process, as over building  in the rented sector will just create another problem in the private rented sector who will need time to adjust to the change.

The government created a society built on investment built on property and borrowing to achieve that aim. What it needs to do now protect that which we have invested property in realistic terms while providing housing for people who need it a realistic prices. At the moment in the housing market we are all paying. House prices continue to fall and building more houses to buy will just drive prices down more as the market becomes flooded. This won't stabilise the markets but lead to a further booms and busts in the future.

However, that is just part of the picture with people incomes falling in real terms, virtually negative growth and more people losing there jobs every day, we are all suffering. We were given a dream by government some thirty years ago and this was reinforced by television to invest in property and borrow from the banks to achieve this. The reality is after today's budget statement, is that people will find there incomes compared to prices falling and there investments falling in value everyday. We are paying the price for greed of the past and an unrealistic dream that government wants to repeat.

Yes it is a time to be hard, because times are hard, but we mustn't repeat the mistakes of the past. The people are now paying for poor policy making. The credit free for all that was created at the time as been exploited by the risk takers in the banking industry which for years of being curious became reckless in their greed. What has happened is wrong and we are now all paying and will be paying and we will be feeling the pain for years.