Ryeview – December 2008

More debt is not the solution to problem

John Clark writes…

First published: December 2008 – Gazette & Herald

To misquote Alastair Campbell ‘I don’t do religion’. Despite that, I think there are many morals, ethics, philosophies and blueprints that should be the bases for the human race to live together. If my memory is correct, Jesus threw the money lenders out of the temple. Most religions reject materialism and the pursuit of wealth.

British society appears to be near the other end of the scale. We massively reward the money lenders. The banks have been bailed out using amounts of money that could remove child and fuel poverty with money to spare. It is believed that the present financial crisis has been caused by massive personal borrowing and the banks lending money to people who were totally incapable of paying it back. It is proposed to solve the crisis by pumping millions of pounds into the banks, lending people more and encouraging them to go out and spend.

What I find hard to believe is that many of the financial objectives of the 1950s, 60s and 70s appear to have been abandoned. It used to be good to manufacture – made in England/Britain was on every toy or piece of equipment. The Balance of Payments was seen as important. For our economy to be sound we had to export more than we imported. This balance was helped by the ‘invisibles’ – money and insurance transactions. Now the dealings in money are so large that we take no notice of the balance of payments shortfalls.  We have not slung the moneylenders out of our temple; we have welcomed them and elevated them to a position of high importance.

Another area that was considered at least good and possibly virtuous was ‘to save’. One of the conditions for a mortgage was that “the applicant must have saved in the society for at least 2 years”. The 21st century Building Societies are competing for the customer by offering low rates for the 1st 2 years. After this giveaway the pain starts. As for those who still wish to save interest rates are becoming less and less. This is to drive the frothy mirage of more high street shopping.

In the past civilisations have collapsed for one of two reasons:

  • Decadence, overindulgence, greed and other vices. These probably destroyed the Roman Empire
  • Ignoring/breaking the rules of nature in relation to agriculture. This probably finished off the civilisations of Northern Africa. They were unable to feed themselves as a result of destroying their farmland and creating more desert.

Most of the two reasons are alive and well in the western countries. We appear to be trying to destroy our civilisation by both methods. Maybe in 2009 we ought to look at a simpler, lower impact way of living. The present system has collapsed. It appears obvious that to rebuild the old mess would be a wrong approach. A system that has collapsed because of borrowing and personal debt should not be revived by more borrowing and more personal debt.

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