Savers are Britain’s new underclass

Colonial

Here is an extract from a newspaper report:

"Merrill's compensation committee doled out $4 billion in bonuses just days before Merrill's management went hat-in-hand to Washington to beg for $20 billion. And why did they go begging for more taxpayer dollars? Because about the time the Merrill execs were cashing their bonus checks, they "discovered" that the firm's fourth quarter would produce an "unexpected" loss of $21 billion."

There have been thousands of similar incidents. Surely at least one law has been broken? If not why has legislation not been passed to get back the funds effectively stolen by these morally dead people? And to jail them?

cuffleyburgers

Kaletsky has clearly been drinking from the same bottle as McLunatic.

Unreadable bollocks.

Ray

Ross paraphrases the Cavaliers' charge that "saving is a bit of an anti-social activity: in the longer run no country becomes rich by squirrelling money away like the man in Bible who wasted his talents".

But, of course, we Roundheads didn't bury our talents in the garden. We 'put them on deposit' (as Jesus commended his followers for doing) and trusted that the banks would, in turn, invest them wisely.

The rest, as they say, is history...

Wily Trout

So what money is it that the banks lend? Savers' money, of course - the idea that savers' money is sitting idle in a cellar is barking. Banks pay savers, or did, to deposit money that the banks then lend out at a profit. Doesn't Kaletsky understand this? Of course he has been 100% wrong all the way through so we can safely assume he was wrong this time as well.

Brian Sidney Cutmore

I'm a saver. But I'm also a pensioner. The interest on my savings used to supplement my income as my pensions amount to £478 per month on which I am expected to live. I cannot claim benefit or rate relief because I have over £10,000 saved. I had been self employed for 22 years and paying in for a private pension with Lloyds tsb - who said when I retire I will get £6 to £8k per year!! I actually get £1305. plus my state pension of £4790 total income £6095 p.a. so thanks Mr. Cameron for suggesting to reduce income tax - but I don't pay any. I am 70, with a 75 year old wife who gets about £200 a month pension so in all we have to live on £668 per month. The Council Tax is £200 a month. Gas/Elec £120. Food £350. The other bills will now have to be paid by withdrawing my savings. I have worked since 1952. For What? Why don't the Government introduce a Monthly Income Bond exclusively for Pensioners. At a decent interest rate?

Pete

As for falling house prices, let's not forget that the lower the bloody things go, the less Broon and his ilk can steal from our children through artificially inflated inheritance tax. Wheee!

Bob Macdonald

I think we can put the divide in this country down to this: a battle between scumbags (white-wine swilling, binge-drinking tarts - the main armies of New Labour's hiring orgy -, benefit-scroungers, freeloaders, liar-loan freaks, vulger debt junkies), and the solvent, sound and loyal (members of the armed forces, a handful of savers, hardworking people who make little noise and don't get pissed every night).

Colonial

Dead right Bob.

With what I understand is known as "Perfect Storm" on the way - the convergence of a host of negative trends such as Western bankrupcy, monstrous consumer debt, Peak Oil, the rise of Asia, the decline of the Western morality, Israeli & Arab conflict, fundamentalist Islam, overpopulation, competition for dwindling resources, new viruses, climate change, food shortages etc - is society not about to undergo major, and probably very painful, change?

Chris

We hear a great deal about the bankers who lent money too freely but very little about the fools who borrowed money they had no chance of paying back.

I suppose this is because there is no longer any such thing as individual responsibility. They were all "lured" in by the evil corporations to take out loans they could not afford to buy things they did not need. Brown's hair-of-the-dog response is to persuade them to borrow and spend even more. The man is an dangerous imbecile.

Mike Walsh

Bail-outs aren't confined to the UK.

I live in Finland and back in the Summer of 2008 I bought some shares in solid Finnish companies, some of which were partly state-owned. Their value has crashed of course since then.

At the same time some fools put their money into totally unknown Icelandic banks in order to get slightly larger rates of return than the Finnish banks were offering. The Icelandic banks went bankrupt and these peoples' money was only guaranteed locally to ca 3000 Euros out of the total guarantee limit of 25000 with the rest "guaranteed" by the Icelandic state that wasn't going to be paying out soon.

No worries, the Finnish government both upped the limit after the event to 50000 but also within a couple of weeks paid out ALL the money Finnish "investors" had placed in these accounts.

(A couple of months later the Finnish government was along with other Nordic countries lending money to Iceland. About a year ago Icelandic interests had tried to take over the local air carrier, Finnair, and the local Telecomms business, Elisa. Yet, never mind, let's "lend" them some money - poor people ...)

Mark Darey

All this seems to suggest that there is safety in numbers after all. If enough people behave completely fecklessly, they can hold the rest of us to ransom. Recklessness becomes the new wisdom. The economists call it "moral hazard".
As for encouraging risk-takers: there's risk-taking which should be encouraged (entrepreneurs who create something new and useful which improves general well-being. Bill Gates would be a good example), and then there are the spivs trying to make a fast buck for nothing. As far as I'm concerned, they should be left to drown in their own greed.I don't remember too many voices being raised in favour of Keynes when mining communities across the country were being destroyed to teach the NUM a lesson. The financial system has to be saved: too much is riding on it. Individual property speculators, on the other hand, should not expect or receive any hand-outs from the government. It is not the government's job to bail out fair-weather free market capitalists.

geo8rge

Savers get first crack at their money, now if they are not going to use it, why not let me borrow it for a while, or forever?

Seriously what where you going to do with it, save it?

Matias

Be your own bank, buy gold & silver.

PM

This is the ant and grasshopper story. The grasshoppers are accusing the ants of causing winter because they didn't eat all their harvest, but saved some back for the cold months. Blaming savers for what's happening now is beyond silly foolishness. If all the savers scraped their little bit together, it wouldn't add up to what the bailout totals are already. So if Anatole is correct that the problem is too much of the supply being kept by the savers, our problems would already be over. I don't hear anyone calling for the banking employees to use their million dollar bonuses to keep the economy going - only the "roundheads" are expected to spend/consume.

Dave

As a young Englishman I do not have any savings to speak of. Nor do I have a penny of debt. This leaves me in neither camp. I will not save in sterling, as there is no incentive to do so. However, I will not get in to debt, as I can not afford to repay. What am I to do? I am an aspiring businessman. But our government does everything possible to discourage business. I'm going to move out of this country to China, where their communist government appreciates the virtues of a free market economy!

Nick

geo8rge, perhaps some of us have a quaint idea of someday being able to buy a house, even without the privileges of the rich (like, Bank of Mum and Dad). Our time is coming!

Overtax productive people too much, and ever fewer will stay in the country. We're the ones who are welcome elsewhere.

Mark

Very good article. I myself am a saver, and I managed to get a 18 month fixed rate of 6% on 50000 euro. So it isn't all bad. Kaletsky doesn't understand that people save due to uncertanity. I could take my money out and spend it but then I would have nothing for a big purchase like my next house. It is all good and fair to say "make the savers spend" but it is our money not his!