Debt

By
Peter McKay

Last updated at 8:04 PM on 25th December 2011

Well, that went off all right. Despite our huge debt, and an income erosion of 3 per cent since 2010 — the average family owes £10,500 in loans, credit cards, store cards, hire purchase and overdrafts — we seem to have spent more this Christmas than last.

The Government borrows on our behalf close to £3.6 trillion to bail out banks, honour public sector pension commitments and service PFI contracts (the scheme under which private companies build projects such as schools and hospitals then lease them back to the state).

That’s about £135,000 per household.

Retail frenzy: Shoppers fill up Oxford Street in central London on Christmas Eve

Retail frenzy: Shoppers fill up Oxford Street in central London on Christmas Eve

Hope Britain’s credit rating stays
good. We wouldn’t want to default, meaning no more credit was available
to us. That would be serious.

So, what will next Christmas be like? It’s possible we’ll be in a Depression, caused by a total collapse of the eurozone, leading to a world-wide slump.
In those circumstances, all but the very rich would suffer a savage cut in their living standards, with the possibility of serious social unrest.

Can we avoid such a fate by living more frugally? Not entirely. That might worsen the situation by killing off the industries which employ as well as need us as customers.

But governments need to make a serious effort to live within their means rather than fiddling around the edges.

Author Michael Lewis considers this possibility in his recent book about the West’s financial woes, Boomerang.

He speaks to famous Texan hedge-funder Kyle Bass about the mammoth debts and poor credit ratings of countries such as Greece and Italy. Bass, who predicted the 2008 collapse — and profited by it — says: ‘Here’s the only way I think things can work out for these countries. If they start running real budget surpluses. Yeah, and that will happen right after monkeys fly out of your ****.’

In Europe, the big problem is that Germany — the most powerful and prosperous eurozone state — won’t cough up enough billions to bail out its poorer, heavily indebted co-members.

Why not? Because Germans were promised, when they abandoned the Deutschmark for the euro, that they would never have to do this.

Michael Lewis quotes a German government official who says: ‘There was no credit boom in Germany. Real estate prices were completely flat. There was no borrowing for consumption. Because this behaviour is totally unacceptable in Germany.’

So it was in the Scotland of my youth. ‘Hire purchase’ (as borrowing was called then) was favoured only by feckless families. ‘A pound down and a change of address,’ was the joke about those who didn’t keep up their repayments.

No one borrowed money to provide ‘a good Christmas’. Like the rest of the year, it was a struggle for the poor. Children, if they were lucky, might get a few sweets or an orange in their stockings.

I remember being glad when the fuss was over and I could get off on exploration adventures with my similarly disadvantaged chums.

I don’t remember any of us ever getting a bicycle for Christmas, or any expensive toy. We fashioned our own bikes from the discarded parts of adult machines. And made our own bows and arrows, using real hen’s feathers for their flights, melting lead to weight their tips.

Could we return to those days, curbing our ‘I want it now’ acquisitiveness and tolerating far lower government expenditure? No, but we could head in that direction, at least.

Could economic meltdown bring a return of the extremism of the Thirties?

London Review Of Books writer David Runciman, who is preparing a book about ‘democracy in crisis’, says: ‘The worst-case scenarios are so ghastly that it’s almost impossible to fathom what they could mean. But for that reason it’s equally hard to imagine mature democracies deciding to walk off a cliff.’

The truth is that democracies have an advantage over autocracies in that it’s easier for them to get rid of leaders who are failing. Also, they can put democracy on hold in a crisis and get away with it.

Whereas, as Runciman says: ‘If autocrats suspend their autocratic powers, they tend not to get them back.’

What governments and their oppositions must not do in a crisis is electioneer. But that’s exactly what is happening here, in Europe and America. If we’re in deadly danger of a Depression — and there seems no doubt about that — all must pull together.

Individually, we must work harder and accept less by way of reward. Be more generous to charity to make up for shortfalls in welfare.

Remain optimistic. Michael Lewis says we tend to say to ourselves that when future difficulty arrives, we’ll figure it out. ‘As idiotic as optimism can sometimes seem, it has a weird habit of paying off.’

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Charlize Theron: Needs a man. Any takers?

Charlize Theron: Needs a man. Any takers?

Charlize Theron, who stars in the comedy hit Young Adult, confides to CNN’s Piers Morgan (who’s already been married twice): ‘I’m single. I need a man!’

Afrikaans-speaking South African Charlize (above) mentions her friendship with Prince Harry, joking:

‘We’re married, I’m pregnant!’ She also describes as ‘the great tragedy of my life’ the night her mother shot and killed Charlize’s father — who was shooting at both of them.

Oh, and she suffers from Obsessive Compulsive Disorder, causing her to fret about the potential mess in closed cupboards.

Is one man enough for feisty Charlize?

Party tips for Pippa

Party girl: Pippa Middleton

Party girl: Pippa Middleton

Having never quite believed the stories about Pippa Middleton being the most sought-after young woman in Britain, I was chastened to see her last week surrounded by no fewer than six young men in a London club I frequent.

No doubt, she was researching her book on party tips for which she’s received a reported £400,000 advance to write. Here are some thoughts for her:

Sausages should always come on sticks. Tipsy guests often overturn the server’s dish trying to harpoon one themselves.

For the same reason, offer wine from a bottle rather than have waiting staff circulate with brimming glasses.

Discourage ‘stalker’ guests who hover within hearing distance of others in conversation by introducing them to members of their ilk.

If there’s music, hire a string quartet. It raises the tone, making guests behave nicely.

Drunks must be shepherded close to the exit so their discreet removal goes unnoticed.

And frisky behaviour must be ridiculed gently — ‘do get a room!’ — while inquiring about their regular partners.

A commentator on Fox News in America has been criticised for likening President Barack Obama to a ‘skinny, ghetto crack-head’.

This remark was in retaliation for one by Chris Matthews of rival broadcaster NBC, saying that Republican presidential challenger Newt Gingrich ‘looked like a car-bomber’.

Matthews added for good measure that Gingrich has ‘that crazy Mephistophelian grin of his. He looks like he likes torturing’.

Is this what Rupert Murdoch-controlled Fox News means when it calls itself ‘fair and balanced’?

You’d be barking to believe this Irish joke

Three Sussex Police officers and a civilian employee are being investigated for racism after telling Irish jokes.

This follows a female colleague, hailing from Ireland, who took meticulous notes of the conversations for more than a year. ‘Sussex Police takes allegations of this nature very seriously,’ says a force spokesman.

What they mean is that Sussex Police is obliged to take allegations of this kind very seriously for fear of falling foul of the law.

But is it sensible to make the telling of Irish jokes — within earshot of people from Ireland — a matter for the courts?

I don’t think so. But we must never underestimate the capacity of we humans to feel sorry for ourselves and the power now enjoyed by minorities to seek and obtain redress for their grievances, no matter how slight they seem to others.

One of my best friends is a County Cavan man who tells Irish jokes. Sometimes he calls them Kerry jokes.

The Irish have Kerryman jokes in the way the British have Irish jokes.

He told me about the Kerryman who bred a talking dog.

The mutt boasted to visitors that it was going to play the eponymous dog in a Lassie remake.

Also, it said, there was talk of a remake of The Hound Of The Baskervilles — ‘but this time it will be from the dog’s point of view’.

The visitors were incredulous, but the dog’s owner seemed unimpressed. They offered to buy the hound and he agreed a £10 price.

‘How could you sell a talking dog for only £10,’ they chortled after the deal was done.

‘Because he’s a liar,’ said the Kerryman.

Prince Philip’s heart scare spoiled Christmas for the Royal Family. So might the new book, Vanished Kingdoms, by the distinguished historian Norman Davies, if they get the chance to read it.

He thinks a future EU crisis might hasten the complete break-up of the United Kingdom, leading to a fully independent Scotland and Wales; a re-partitioning of Ireland so its Ulster Protestants can form an alliance with Scotland; an English Republic; and the House of Windsor morphing into the House of Balmoral and reduced to sitting merely on the Scottish throne. Help!

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Blaming the inquiry into media ethics after the phone-hacking scandal, The Times complains that the Press is frightened to investigate why Wales’s football manager, family man Gary Speed, 42, killed himself last month.

Celebrity spokesman Max Clifford says he knows three well-known people ‘whose reputations are being tarnished by false stories and allegations which would be clarified if people had come out with their exclusive stories.’

He concludes: ‘We have a shackled Press.’

If so, it’s self-shackling. It is a fear of knee-jerk accusations of intrusion that is stopping newspapers from reporting properly on Gary Speed’s death and the lurid, unsubstantiated rumours that are circulating on the internet.

Instead, they’re content to publish articles speculating about the prevalence of male depression.

The Press mustn’t wait for Authority to tell us what may or may not be published. Isn’t that the regulatory control we fear so much?

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