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Brits are spending more than they earn. Uh-oh.

Low interest rates used to mean debt was kinda affordable. Now interest rates are going up. 

Low interest rates used to mean debt was kinda affordable. Now interest rates are going up.

What it means: It’s not necessarily a bad idea to borrow money. Governments do it all the time, and some people think if they did more of it we’d all be better off. Millions of Brits borrow money to go to university or buy houses, and any of us who own a credit card use debt to buy everything from holidays to frappuccinos to the latest economic bestseller (or is that last one just us?).

But debt is a problem if you can’t pay it back. Which is why it’s very much Not Good that for the first time in about 30 years, UK households are spending more than their earn. That’s according to the Office of National Statistic (ONS), who also says that people are borrowing so much because banks have set really low interest rates since the 2008 financial crash. The interest rate is the price you pay to borrow money, or the payment you receive when you stash your savings at the bank. When interest rates are low, people are encouraged to save less and borrow more.

But now the Bank of England has put interest rates up, from 0.5% to 0.75%. That means loads of people with debt (including some mortgages) are suddenly having to cough up more money.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?