Monday, 15 October 2012

Why is a public sector agency advising us to spend money on stuff we really can’t afford?

Britain’s economy went tits up in 2008 because too many people had borrowed too much money to finance lifestyles they couldn’t afford. (I’m sure Professor Paul Krugman or Will Hutton would tell you otherwise, but they’re fools.) The powers-that-be – most notably a bunch of Scotsmen, including Gordon Brown and the directors of the Royal Bank of Scotland – were basically doing the same thing, whether borrowing billions to fund a ludicrously bloated public sector or to buy banks they couldn’t afford.

When a decade of financial incontinence finally caught up with us, our new coalition government decided the best answer was to reward the imprudent by making borrowing cheap and to punish the very people who hadn’t caused the problem in the first place by guaranteeing that their savings couldn’t keep pace with inflation.

When it came to public spending, the government promised to get tough, but have in reality merely lowered the projected rate of increase rather than, you know, actually spending less (the very idea!). As a result our debt continues to rise inexorably, and the economy is moribund.

The Money Advice Service was set up by the government last year, and, while it claims to be “independent” (an almost meaningless term these days) it’s essentially a government agency paid for by a levy on the finance industry collected by the Financial Services Authority, the city “watchdog” that evidently slept its way through the Noughties.  So those of us who chose to save our money rather than satisfy cravings for, say,  a bigger house, or a top-of-the–range Mercedes or, indeed, a Caribbean holiday will end up paying for the Money Advice Service through increased charges on our investments or lower interest interest on the same – another perfect example of the prudent being made to pay for the feckless.

The above advert, which is on heavy rotation on TV at the moment, sides with the two adult female characters, who want to go on an expensive family holiday, against the father of the house, who knows they can’t afford it – he wants to go to Cornwall (which, to be honest, isn’t exactly cheap either).

I have no idea who devised the advert’s tawdry, immoral message – i.e. there's no need to defer the gratification of unaffordable impulses – but it certainly chimes with the government’s belief that the economy will magically roar back into life if we all again start spending money we don't have, while public spending can just bobble along pretty much at its current ruinous level.

If I’d been playing Dad, I’d have told my mother-in-law to shut up, and the rest of the family that we were holidaying in Cornwall (which, to be honest, is pretty bloody expensive these days), and that they should consider themselves lucky to be going anywhere at all, given the parlous state of the family’s finances.

With any luck, there’ll be a sequel showing the whole family returning from their ruinously extravagant trip to discover that the bailiffs have impounded all their possessions, and that their house has been repossessed by the mortgage lender.

One last grump – if I were a woman, I’d be really annoyed that the two characters determined to wallow in unaffordable luxury are both female: experience tells me that women are usually a damn sight more aware of the danger of getting into debt than men are.

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