The Great Bank Heist
A simple blog for you today. But an important one. The OBR forecast nobody wants you to see.
Cameron, Clegg, Osborne and lackeys thereof, keep making the household debt analogy. What would you do if you owed more money than was coming in? You would have to cut spending, right? Manage your debt.
Ironic then, that the government’s current fiscal policy has a very simple and direct effect on YOUR household debt. This is, in my opinion, one of the most vital (and at the same time the most under-publicised) statistics to come out of the Office for Budget Responsibility:
Ahead of Osborne’s emergency budget, the forecast of the OBR for household debt (i.e. the money an average UK household owes, incl. secured loans like mortgages) had been:
This showed a predicted decrease of household debt as a percentage of household income, from 150% in 2010 to 143% in 2014. This had to be revised for Osborne’s emergency budget:
The decrease is now less sharp between 2010 (151%) and 2014 (146%) and actually flat-lines in the last three years of the forecast. Ahead of Osborne’s recent budget, however, as the cuts bite and growth stutters, the OBR had to issue a correction, dramatically revising their forecasts to:
Not only are they no longer looking at a decrease in household debt. They are looking at a STONKING 14% increase over the next five years. In money terms, almost £500 billion is being added to MINE and YOUR personal debt. And this doesn’t even take into account the inevitable, approaching interest rate hike.
And so if you are wondering how the Conservatives can cut the national debt so much quicker than anyone else had forecast or advised, that any country abroad is having to do, this is how it is done: A simple transfer of state debt, bank-bail-out money debt, let’s-fight-a-war-in-Iraq debt from UK PLC to UK MUGS LTD.
And I don’t say that. The OBR, the independent government watchdog over money matters, says that.
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This entry was posted on March 25, 2011. It was filed under Uncategorized .
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Friday 25 March 2011
The Great Bank Heist « sturdyblog
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