Posted by NW on August 24, 2011 at 08:47:35:
In Reply to: re: bad bank lending at the root posted by jj on August 24, 2011 at 08:14:05:
Our current woes are due to the banks. Selective quoting is easy but you need to read the full sentence: 'most of this is due to repay bad lending and the results of that bad lending over a number of years'. Put the emphasis on 'the results of that bad lending' and consider the point that the false income flowing into the coffers during the boom allowed stupid government policies to run riot.
The property transaction taxes on which the expansion of services was based allowed for largesse and the shirking of the need to have a proper tax base is at the root of the current problems. Bad and greedy bank practices are at the root. And of course corrupt politicians in cahoots with the property developers as we have seen in the tribunals. The properties on which those transaction taxes were paid are now close to worthless (or worse in some cases). The wages paid out to electricians and brickies and the like for their 4-wheel drives and breakfast man lifestyle now have to be paid by the rest of us because the credit card bill for their wages has dropped on the mat. Fuelled by 100%+ mortgages (sure go and buy a car and have a holiday and furnish the house with the mortgage as well why don't you?) and buy to let get rich quick schemes recipes for ghost estates. The real damage is that once those property transaction taxes (remember fuelled by the bad practices of bankers) disappeared the house of cards collapsed.
But even at the height of the so-called 'boom' our education system was funded at third world levels - bottom of OECD leagues. And now we have to cut it back even further - the deficit is too big due to the mess the banks caused. So thanks to the bankers for all that.
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