# Mortgages



## Ed (Feb 9, 2011)

I'm not in a position to buy a house/flat yet I'm just sort of looking around for future reference.

For the self employed composer it seems a bit dangerous, doesn't it? No regular income where you have to make sure you earn a lot more than necessary just in case you have a dry few months and can't afford the monthy repayments. But then there's also payment protection insurance, is that what a lot of people go for? (independent insurance not stuff the banks try and sell you) Is it worth saving up a large deposit over several years so you buy most of it outright? Is it definitely worth paying more for a 2 bed for the studio?

Anyway just wondering what people here have done with buying and renting over the years. Ie. Did you rent for a really long time and how much would you suggest you should be making before you start thinking about buying a place?


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## Udo (Feb 9, 2011)

Marry someone with money and/or a good and steady income, insist on a substantial dowry and make sure you remain covered by a well structured prenuptial agreement :D


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## rgames (Feb 9, 2011)

Whether you're a composer or a stock broker or a doctor or whatever it doesn't matter: it all comes down to your tolerance for risk.

Getting a mortgage can be a good financial decision - the after-tax cost of the money is pretty low, especially nowadays. Not sure how it works in the UK but I'm sure it's similar.

However, you then share the risk with the bank. If you put down only 10% or so and the market drops to the point where you owe more than the house will sell for, well, you're stuck with the bill if you want to move.

In general, mortgages are good ideas so long as you share in the up-front investment. The standard guidance of 20% down keeps most folks out of trouble, but not always. So, again, it all comes back to risk - there are no guarantees. The burst in the recent housing bubble certainly illustrates that fact.

One thing is for sure, if you want a mortgage and you're willing to put some skin in, now's the time to get one. I just finished the paperwork for a refinance on my mortgage on Friday and the APR is crazy low...

rgames


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## Brian Ralston (Feb 9, 2011)

rgames @ Wed Feb 09 said:


> In general, mortgages are good ideas so long as you share in the up-front investment. The standard guidance of 20% down keeps most folks out of trouble, but not always. So, again, it all comes back to risk - there are no guarantees. The burst in the recent housing bubble certainly illustrates that fact.



Depending on where one lives...20% is realistic or not. 

We just bought a very old 1920 craftsman in LA...3 bd/ 2 Ba...that was a short sale. Even though we paid half of what the person we bought it from paid 3 years ago...20% for us would have been near 6 figures. I don't know anyone who has that kind of liquid cash just lying around. We also bid $30k over asking and were still originally outbid...but then through a series of events it came back to us (second highest offer) and we eventually got it because we were ready to go with what we had and our credit was very good. 

And that kind of money for a very OLD house that had knob and tube wiring (before we replaced it upon move in) and it still needs a new roof...is unfortunately the norm in a city like LA. Still...despite the "burst" of the bubble here.


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## madbulk (Feb 9, 2011)

Dunno about UK. But simply put, renting is underrated here in America.
There was an article in the WSJ today I think that carried the headline "Housing prices back to Pre Bubble levels." Which means 2003 or so. But... it doesn't mean that the house that was 100k then is 100k now. Not exactly. And it's not true in L.A. or NYC. AND most importantly it does not mean, "Buy today because prices won't keep falling from here." And surely that's how it's being read by most.


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## madbulk (Feb 9, 2011)

As to how much you should be making before you look to buy... the most super general rule of thumb is that your mortgage can reasonably be up around 3 times your income.


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## Brian Ralston (Feb 9, 2011)

madbulk @ Wed Feb 09 said:


> As to how much you should be making before you look to buy... the most super general rule of thumb is that your mortgage can reasonably be up around 3 times your income.



The debt to income ratio being used by the banks now (in USA) is around 39-40% (give or take depending on credit history) of your monthly income can go to mortgage. If your proposed mortgage is higher than that percent of your income...you will no longer get approved for the loan. Although...the more one puts down...the more they leave you alone. Folks with 20% down and above kind of get left alone by the bank's new rules. 

The people making bank now (pun intended)...are the "investor" individuals and house flippers who can pay cash for a house. (Many auction foreclosures require cash now) In LA anyway, foreclosures and short sales are now 90% of the market. Those wealthy investors are buying up these foreclosures and short sales, flipping the house in 30 days and re-selling them for $50k-$80k more and walking away with a nice chunk of change in a quick amount of time.


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## rgames (Feb 9, 2011)

Brian Ralston @ Wed Feb 09 said:


> Depending on where one lives...20% is realistic or not.





Brian Ralston said:


> In LA anyway, foreclosures and short sales are now 90% of the market.



Think there's a correlation there? 

rgames


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## rgames (Feb 9, 2011)

madbulk @ Wed Feb 09 said:


> Dunno about UK. But simply put, renting is underrated here in America.


I agree - there's nothing wrong with renting and it can make good financial sense, especially since the financial commitment is much lower.

Many people who have mortgages essentially rent, too: they go their whole lives moving from mortgage to mortgage and wind up with a tiny bit of equity because they just keep transferring it to the next house. If you compare that to just renting and stashing the difference in cash, many folks would actually come out ahead if they just rented their whole lives.

rgames


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## dinerdog (Feb 9, 2011)

The other thing that makes it extremely hard for a composer (at least in my experience) besides your tolerance for the ups and downs is the that most banks will classify your income as "100% unfixed". A low paycheck every two weeks is WAY better to them than the seemingly random way we earn. They just don't get it. They cannot fathom that we have no ideas what we'll make from year to year. So you may have to try a few places before even finding someone whose dealt with and kind of freelance artist before.


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## rgames (Feb 9, 2011)

dinerdog @ Wed Feb 09 said:


> The other thing that makes it extremely hard for a composer (at least in my experience) besides your tolerance for the ups and downs is the that most banks will classify your income as "100% unfixed". A low paycheck every two weeks is WAY better to them than the seemingly random way we earn. They just don't get it. They cannot fathom that we have no ideas what we'll make from year to year. So you may have to try a few places before even finding someone whose dealt with and kind of freelance artist before.


Correct - but that's not just composers, it's anyone who is self-employed in a small business. Plumbers, photographers, restaurant owners, etc. who have only one or a few employees all face the same problem.

It's all about risk: most small businesses fail, so the banks are just playing the numbers game.

rgames


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## midphase (Feb 9, 2011)

I think you should look back at the past 3-5 years (ok...maybe 2008/09 doesn't count) and get an average of what your income has been. That will give you some parameters. Assuming there's not a repeat of the crap we all just went through, you could assume a yearly increase of 10-20% on your income (from having a wider clientele each year). There might be some jumps, or some drops, but you should be able to get a good sense of where things are headed financially for you based on your past few years records.

Keep in mind that ownership is a whole lot more than just mortgage, and keep in mind that closing costs are a whole lot more than 10%.

If you're in a position to wait and build up a hefty savings, I would say do that. If you see that the market starts rising up again and the real estate prices get higher each month...you might want to jump on something if you're in a position to.

Also, keep in mind that the more cash you have, the more desirable you are as a buyer to both the bank and seller. In many cases someone will a lower offer but a larger amount of downpayment will outbid someone with a higher offer but little to no downpayment.


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## George Caplan (Feb 10, 2011)

Ed @ Wed Feb 09 said:


> I'm not in a position to buy a house/flat yet I'm just sort of looking around for future reference.
> 
> 
> Ie. Did you rent for a really long time and how much would you suggest you should be making before you start thinking about buying a place?



for future reference the lenders will look favorably the bigger the deposit youve gotten up front. self employed and you will probably need 3 to 5 years of authorized accounts because if not youre into sub prime and you can just forget it then. and those accounts will need to show good and regular earnings preferably rising. a bit like the reflection of a rising share price in a company going forward.

payment protection insurance is crap. end of conversation.

when buying a house buy it to live in and not as an investment. this is the mistake that all uk residents have made recently having been forced to think in other terms than a normally stock related investment via a 401k or a uk personal pension and then getting into serious trouble via buy to let mortgage deals.

the bottom line is as always is to weigh up cost of rental versus cost of mortgage repayments and go from there remembering that with ownership comes extra hidden costs that may have been included in a rent assessment.

when i first came to the uk a group of us got together and bought a house in cambridge during the term there and then sold at the end of 3 years. i had mortgages for a period but now if i want to buy a house anywhere i just pay for it cash.

try to assess the way interest rates are going remembering that a mortgage rate bears no relation to a bank base rate and try to fix into a rate that you are then comfortable with remembering penalty costs if you pull out.


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## midphase (Feb 10, 2011)

Dan Selby @ Thu Feb 10 said:


> Also, @Brian: I love that your "very OLD" house is 1920. Our "not particularly old" 4 bed is 1893, my parents barn renovation is rather older than that. I don't remember how old exactly... but there were definitely rather fewer white faces over your side of the pond. :D
> 
> ...and my uncle and aunt used to live in a property, part of which pre-dates Columbus by a century or so! :D



Oh yeah? Well...I live in a prehistoric cave...so there!


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## Dan Selby (Feb 10, 2011)

midphase @ Thu Feb 10 said:


> Dan Selby @ Thu Feb 10 said:
> 
> 
> > Also, @Brian: I love that your "very OLD" house is 1920. Our "not particularly old" 4 bed is 1893, my parents barn renovation is rather older than that. I don't remember how old exactly... but there were definitely rather fewer white faces over your side of the pond. :D
> ...



Yeah, I've heard your neighbours say that, Kays... but it could just be the smell. :twisted:


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## Nick Batzdorf (Feb 10, 2011)

Our very old house was built in 1942. My parents' house from 1905 is a historical landmark - it's very difficult for them to get permits to change it (although they did do a lot after the '94 earthquake). A friend of mine lives in a Colonial house - late 1700s - outside Boston, and it's way older than anything out here (Los Angeles).

That's why I'm always amazed to see houses in Europe from the 1400s that aren't even historical landmarks!


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## rgames (Feb 10, 2011)

George Caplan @ Thu Feb 10 said:


> when buying a house buy it to live in and not as an investment. this is the mistake that all uk residents have made recently


Same problem in the US. In the years 2002 - 2006 or so people started treating their houses like kids with sports card collections: look how much mine is worth! Then people were shocked when prices went through the roof and nobody could afford them... duh! Just like the tech stock boom and bust in the late 90's. People get excited about perceived value (i.e. paper money) and it drives the market to artificially high valuations. I'm sure it'll happen again...

High housing prices benefit two groups: realtors and mortgage companies. 99% of people who sell their house simply wrap their gains into the next house. So sure, their house is worth more, but their next house costs more, so why does the homeowner care?

The end result is that high housing prices serve only to make it more difficult for first-time homebuyers to get into a house. So why would anyone *want* high housing prices? Well, anyone other than a realtor or mortgage broker, of course.

Quite frankly, I hope housing prices stay flat or drop a bit relative to personal income for the next 10 - 15 years. That will allow restoration of parity between what people earn and how much a house costs. That way, more people can get in a house without leveraging themselves into oblivion.

rgames


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## gsilbers (Feb 10, 2011)

George Caplan @ Thu Feb 10 said:


> Ed @ Wed Feb 09 said:
> 
> 
> > I'm not in a position to buy a house/flat yet I'm just sort of looking around for future reference.
> ...




i agree with what i added bold. 

i think there is this sort of myth that buying a house is a good investment. 
its kinda true in a way but its not like investing in apple pre ipod. =o 

if you buy a house for an investment its better to do that in trading stocks that are specific to that and it is more secure. 
or buy several properties where others are paying the mortgage. 

if you buy a house do it to live in and what u need. 
i think we got sold in the idea that owning a house equals to freedom and we dont have to put money on other peoples pocket (so does paying mortgage and interest dont count?!?!) 
you dont really own your house... the bank owns your house which it should be clear now with the word foreclosure being so prevalent. 
yes, you pay the bank and the title is yours but how long is it for you to pay off your house and its really yours? 30+ years and most poeple that buy a house only live there 3-5 years till they use the built equity to afford a new house thats more expensive which turns out you still owe about the same amount and start from scratch in the time it will be yours 30+ years. 

then if you do things right you build equity and it will let you do different investments but that still means you grab and get in debt putting your house as collateral and you took money out of your equity that u still have to pay back one form or another. 
its just a crazy debt game that the banks sell you. 
in one hand you can afford new things, better and bigger house, and maybe use the money to invest in a new business. 
in the other hand you are just eternally in debt and can easily go out of control with any little stock market flactuation.
so yes, renting is fine. 
and if you work freelance and there is ups and downs... then dont do it.. IF the banks will give to you. 
buy a house because you can mod it to have a studio =o


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## Nick Batzdorf (Feb 11, 2011)

George, fixed mortgages are fixed at the current rate and payment.

And the reason the UK growth is slowing is that you have conservatives (who believe in austerity) in power. They're wrong.


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## Nick Batzdorf (Feb 11, 2011)

And by the way, I haven't heard anyone say that houses aren't a good investment over long periods of time even now. There were bubbles all over the world, but if you bought your house in before 2003 - when the big bubble started in the US - you're back ahead.

Unlike Richard, I don't want housing to stay artificially low - nor artificially high so that people flip houses without adding anything, making them unaffordable.


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## Synesthesia (Feb 11, 2011)

Oh man.. its the first time I've ever felt like commenting on a political post! :D

Nick - whatever you think of the Tories, New Labour spent us into bankruptcy - OFF BALANCE SHEET.

All these tricky PFI deals - we are locked into for 30-40 years - even our Revenue and Customs sold their buildings to Mapeley - a company registered in a tax haven - and are now renting them back at well above market rates.

They did a lot of damage so they could keep their profligacy hidden.

Check out a very interesting UK publication called 'Private Eye' - it has a lot of revealing journalism in it!

Cheers,

Paul


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## dpasdernick (Feb 11, 2011)

I made a good sum of money on my 1st house in Vancouver Canada. Years later lost over 110k on my house in Michigan. Starting over here in Texas at 49 years pf age. The bubble has burst, although some areas weren't hit as bad. 

A neighbor of mine in Michigan sent me a youtube video that showed housing prices since the late 1800's. The graph was relatively flat untill around 2000 and then it spiked like a mo-fo. Obviously a spike like this is not real and will have to correct itself (as it now seems to be doing)

I have a friend who lives in Century City. Spent around 40k for a house many years ago that, at the peak was worth around, 1.1 million. He is a video guy. He could not afford to re-buy his house. The point is, in places like LA, and San Fran if you were not in a house pre 1990 or even earlier chances are you would not be able to buy a "unique fixer-upper" for 1 million bucks. The banks won't like you unless you have 20% down so you need 200k to get to the dance. Then you are financing 800k which is around, what? 5-6k a month? That's a ton of coin for even two rich lawyers. The bubble made it poosible for people to build huge amounts of equity in a real short period of time. They'd take their 400k bubble money and put it down on a 800k house. That's a great downpayment but you still have a 400k mortgage. The reality is that there are simply not enough rich people in places like LA that can buy the 800k homes. If you think we're "correcting" now wait until the older generation passes on. Unless they will their homes to their kids the market will be flooded with a ton of high priced homes and nobody will be able to afford to buy them.

So for the lucky peeps in LA that got in early, well done. For those that scrambled in cities like Vegas and Phoenix, bought at the top and are now underwater, my condolences. A house is a good investment if you can stay there for a long time and have a job where you can stay put go for it. Problem is that in todays ever changing world we can't work at Sears for 45 years and make a go of it. If you're forced to move every 4-5 years to keep a job then you might as well rent. The real estate fees will kill you. 


2 cents,

Darren


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## rgames (Feb 11, 2011)

Nick Batzdorf @ Fri Feb 11 said:


> I don't want housing to stay artificially low


Why? What benefit do you get from high housing prices?

I don't know what you mean by "artifically" low, but I don't think it's what I was getting at. I simply want to see a return to sane levels of debt-to-income. In order for that to happen, housing prices will have to stay flat or drop a bit as incomes start to grow again. Or, if incomes start to skyrocket, then sure, housing prices can come up a bunch, too, but not by the same amount (i.e. incomes need to grow faster than housing prices). My comment was about restoration of parity between the two.

rgames


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## Nick Batzdorf (Feb 11, 2011)

> Nick - whatever you think of the Tories, New Labour spent us into bankruptcy - OFF BALANCE SHEET.



That is the myth used by conservatives around the world to sell their poison. The UK is NOT in bankruptcy; you have a conservative government that has chosen to embark on voluntary austerity for ideological reasons.


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## Nick Batzdorf (Feb 11, 2011)

Fair enough, Richard.


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## snowleopard (Feb 11, 2011)

...Or how about not getting divorced?! 

I would agree with Madbulk and Richard. There is nothing wrong with renting if you're somewhere you like, and aren't paying an arm and leg for it. Five to ten years ago in the US anyway, there was this mad dash for everyone to buy a house, rent was throwing your money away, the market would always go up, etc. ...Then everything crashed and almost everyone got hosed. Some lost everything they had. No one came to the rescue, and no one is coming. 

I used to rent, and I liked it. I had a good little apartment, nice location. I saved up and bought a house, not 20% down, but some down and enough to cover closing and the fees. I bought before the market got stupid, but my home isn't a gold mine. I'm doing okay. But if I were still renting in that old apartment, I'd still be doing okay too. Life wouldn't be much different.


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## Synesthesia (Feb 11, 2011)

Nick Batzdorf @ Fri Feb 11 said:


> > Nick - whatever you think of the Tories, New Labour spent us into bankruptcy - OFF BALANCE SHEET.
> 
> 
> 
> That is the myth used by conservatives around the world to sell their poison. The UK is NOT in bankruptcy; you have a conservative government that has chosen to embark on voluntary austerity for ideological reasons.



Er, this situation was widely reported well before the election. 

Nick do you actually know the details of the UK economy specifically in relation to the PFI situation?


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## Nick Batzdorf (Feb 11, 2011)

Er yes I do. The UK is not in bankruptcy.


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## Nick Batzdorf (Feb 11, 2011)

Actually I don't. What's PFI?

But all kinds of things have been widely reported that are total booshwoogie. Such as everything any conservative ever says.


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## Synesthesia (Feb 11, 2011)

PFI = Private Finance Initiative.

The New Labour favoured vehicle to take government spending off-balance sheet.

The example I quoted regarding our HMRC - here are five links of interest and a quote from a Liberal peer.

Lord Oakeshott, Liberal Democrat Treasury spokesman, said this weekend: “HMRC let Mapeley take taxpayers to the cleaners by putting its property into a tax haven in 2001. Now Mapeley is in dire financial straits and doing a desperate rescue bond issue there must be a real danger taxpayers will lose out again. Mapeley is meant to manage most of HMRC’s leasehold offices and provide full facilities-management services. But if Mapeley goes bust, is the taxpayer properly protected?”

http://business.timesonline.co.uk/tol/b ... 536995.ece

http://www.thelawyer.com/leader/98841.article

http://www.publications.parliament.uk/p ... 061804.htm

http://www.thisisguernsey.com/2006/02/11/minister-rejects-tax-dodge-claim/ (http://www.thisisguernsey.com/2006/02/1 ... dge-claim/)

http://en.wikipedia.org/wiki/Private_finance_initiative


I think thats probably enough information for a Saturday morning!


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## Synesthesia (Feb 11, 2011)

And - yes, Nick, of course 'spent us into bankruptcy' is an expression, a turn of phrase.

I don't literally mean the UK is bankrupt.
:lol:


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## Synesthesia (Feb 12, 2011)

Oh - and finally - just worth mentioning that I voted for New Labour twice - although not in the recent election - and I was as hoodwinked as the rest of the population initially.

I'm a liberal by nature and we have a liberal-conservative coalition in power.

Ed - sorry for hijacking your thread man!


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## NYC Composer (Feb 12, 2011)

The fact that I bought NYC real estate in the eighties (and sold my loft in early 2008) will be the singular the reason I will be able to "retire". Timing matters when investing in real estate, but it's rarely a great idea to have view your home as a major source of your wealth. 

In New York, it doesn't matter how much cash you have, unless it's in fixed income assets-you cannot get a mortgage or refinance unless you have a DTI (debt to income) ratio that conforms to bank guidelines. Banks look for consistency of income over a number of years, which makes things very hard on composers. The banks have gone from one extreme to the other.

I don't know what real estate values look like in the UK, but as I look around the US, it looks to me like a fire sale. I find it hard to believe that anyone buying prudently now will regret it ten years from now. I'm sure the ridiculous valuations of the early 2000's won't return any time soon, nor should they, and no one should be using home equity as a piggy bank as so many here did. Still, there are tremendous values in Phoenix, Las Vegas, Miami, dozens of other places.


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## chimuelo (Feb 12, 2011)

Las Vegas has reported more sales to foreign home owners than anytime in previous years. Foriegn investment has always been high as in World Dubai and other private Governement/Business partnerships.
100-150,000 is the going rate and while many Americans aren't jumping our foriegn friends obviously think the market has bottomed out.

More good news is my friend who works for Intel up in Central Cali has bought a house here. I can't get him to answer a direct question, but it looks like Intel along w/ Microsoft is moving from there to Nevada. Microsoft opened up manufacturing facilities here years ago but kept some irons in the fire.
I guess the lack of Flooring taxes and no State taxes are just too tempting.
Jerry Brown needs to take action quickly before this migration takes place.
Just leave all of those OctoMoms in CA where taxpayers foot their bills... :D


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## Nick Batzdorf (Feb 12, 2011)

Paul - what is going on in the UK right now will really hurt the economy. Austerity is the wrong thing for the UK, Ireland, Spain, even Greece...just as it would be here if the Republicans get their horrible way.


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## NYC Composer (Feb 12, 2011)

Word to the wise-forget grass, plant your lawn with soybeans.


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## George Caplan (Feb 13, 2011)

if the uk do not tackle the deficit currently running at approximately 160 billion uk sterling the bond traders around the globe will look at their certain downgrade and their interest rates will rise and mortgages will be hard to come by for anyone with crappy accounts in the self-employed sector. that is what having a deficit means. inflation is an extremely important part of all of that because the mpc have only one raison d'etre in life and that is to tackle inflation. they will certainly raise rates when then uk shows sustained signs of growth. mortgagees are being subsidized by savers currently and that of course cannot continue indefinitely. they the mortgagees are themselves not saving but paying any extra income available off their debts.

in this parliament the uk government will not try in any way to get the whole deficit down but certainly the structural deficit. if at the end of this parliament they do not achieve that and the uk vote labor i and the family are looking forward to a nice retirement in connecticut.


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## Nick Batzdorf (Feb 13, 2011)

> if the uk do not tackle the deficit currently running at approximately 160 billion uk sterling the bond traders around the globe will look at their certain downgrade and their interest rates will rise and mortgages will be hard to come by for anyone with crappy accounts in the self-employed sector



And that too is the line used by conservative deficit hawks around the world. Yet there's no evidence of that happening, in fact the opposite is true: cutting back in the middle of a recession will shrink the economy and cause all those things to happen.

The time to cut spending - at least most spending - is when the economy is back on its feet.

And what the Republicans want to do in the US right now is just bad. Our president is making a big mistake by feeding them bones, because he's allowing them to frame the debate.

Robert Reich said it again in his blog today:

http://robertreich.org/post/3277360050


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## JohnG (Feb 13, 2011)

For those who actually believe in capitalism, world interest rates show that in some countries the moaning about deficits is wildly overblown. The US, to take one such, now swarms with political evangelists foaming at the mouth over "looming bankruptcy," notwithstanding the fact that interest rates and full liquidity clearly and unambiguously confirm that, world-wide, investors are very happy to continue lending the US government money.

The UK is still able to borrow incredibly cheaply, at under 4% for its 10 year debt. Likewise, the US is well under 4%. These rates do not bespeak panic, and they are the results of billions in transactions, not a trick or sleight of hand engineered by Bernake. Even the Fed can't create the illusion of low rates if there is real concern. The comparable rate for Greece is over 10%, which reflects real concern about the possibility of default. 

In the US, in strained efforts to whip up fear, statistics are being twisted beyond recognition. One group is attempting to compare, for example, something they call "real per capita debt" to national income. Except there is no such thing as "real" debt. There's nominal debt, which you compare to nominal income; you pay back what you actually owe in dollars with today's dollars. You don't have to pay back some adjusted-up figure, just the amount you agreed to, contrary to what's being peddled by the "world coming to an end" team.

Using the normal, sensible, capitalist's comparison of debt and national income, the US is not wildly out of line with other strained points in our economic history and as the economy grows we'll get more in line.

Comparisons to, say, Greece are sheer fear mongering. Greece borrowed in a currency it doesn't control, made up numbers to carry on, and doesn't properly collect taxes. Implying that the US is "just like" Greece doesn't hold up even to a cursory examination.

Deficit reduction has taken on the tone of a religious campaign, with all the mumbo-jumbo nonsense that attends proselytising.

I'm all for cutting government, especially the Pentagon; starve the military instead of lunches for kids with learning disabilities. Then maybe the next George Bush won't be so trigger-happy.


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## Nick Batzdorf (Feb 13, 2011)

Exactly.

And that's what's always missing from the discussion - the concept that the debt is only relevant as a percentage of GDP. If the GDP goes down, the percentage goes up and things get worse all around.

I saw about 20 seconds of Boner on one of the Sunday morning shows this morning going on about how we have to cut spending now now now now. It's just frightening that I know more about economics than the freaking House Majority Leader. What an ass.


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## NYC Composer (Feb 13, 2011)

I'm specifically in favor of cutting waste and inefficiency. I'd start with:

1. The military budget
2. Medicare fraud
3. Inefficient and redundant government agencies.
4. The teachers union.

The last less as a cost cutting measure than a way to achieve desperately needed improvements in education. My experience with having my kid in public school left me agog, disgusted with the way absolutely terrible teachers are protected by the system.

Pardon the digression.


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## choc0thrax (Feb 13, 2011)

9/11


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## Nick Batzdorf (Feb 14, 2011)

Great article on what John is saying (James K. Galbraith is one of my Main Men):

http://www.huffingtonpost.com/james-k-g ... 22811.html


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## chimuelo (Feb 14, 2011)

I suppose it depends on which lies you want to believe.
Afterall, these people are pushing opnions and points of view laced with deception. That's their job, and they must do as they are instructed to do, or no more Sushi and Starbucks for them.

I really loved the story of Pinnochio.

I would love to imagaine a world where if anyone lies, they become more unresponsive to gravity, and eventually they just float away.
We could eliminate all of the bloggers, Cable news outlets, the Liberals, the Conservatives, the Socialists, Communists and all forms of Government.

Just a few billion people trying to enjoy the life they choose w/o doing what others say is best for them.
______________________________________

Back to reality.
Pick your favorite liars, and hope when they attain powerful positions, they will suddenly want to tell you the truth.


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