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The Anti-Austerity Crowd

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Comments

  • #242
    steamengine
    Closed Accounts Posts: 2,372 ✭✭✭steamengine


    Piliger wrote: »
    Only really really stupid people try to win arguments and persuade people by being angry, aggressive and offensive.


    It's the ready acceptance of the continuing austerity that I fail to understand. As Jean Kennedy said 'Irish people lack a healthy sense of protest'. Clearly there's a few on here that almost laud austerity, The signal that sends out to government is that the screws can be turned another few revolutions. Property is on the up again and pro rata the property tax will rise also. Good luck to the AAA in the elections, they have my support as Labour seem to have dropped the baton somewhere along the line.


  • #243
    Permabear
    Closed Accounts Posts: 38,989 ✭✭✭✭Permabear


    This post has been deleted.


  • #244
    Piliger
    Registered Users, Registered Users 2 Posts: 6,741 ✭✭✭Piliger


    steamengine wrote: »
    It's the ready acceptance of the continuing austerity that I fail to understand. As Jean Kennedy said 'Irish people lack a healthy sense of protest'. Clearly there's a few on here that almost laud austerity, The signal that sends out to government is that the screws can be turned another few revolutions. Property is on the up again and pro rata the property tax will rise also. Good luck to the AAA in the elections, they have my support as Labour seem to have dropped the baton somewhere along the line.

    I am very happy with austerity. We are sill spending money that we don't have and I abhor the attitude of entitlement that some people have, where they believe that we are entitled to spend more than we have. After going independent last time I am voting FG this time. They are doing an excellent job in general and the coalition is working very well imho.


  • #245
    hatrickpatrick
    Registered Users, Registered Users 2 Posts: 17,798 ✭✭✭✭hatrickpatrick


    Geuze wrote: »
    http://www.bankofengland.co.uk/banknotes/pages/about/history.aspx

    This may help answer your questions.

    I already know the answers, I'm merely trying to open people's eyes to the ridiculousness of the current money supply system, by encouraging people to question things they generally take for granted, and realize that the answers are nonsensical.


  • #246
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Piliger wrote: »
    This post had been deleted.
    No - the way giving easier access to credit, leads to house prices being bid up, is a factual argument - one that puts responsibility on the banks/central-bank and government, for ensuring house prices are not bid up.
    Permabear wrote: »
    This post has been deleted.
    "We show that easier access to credit significantly increases house prices by using exogenous changes in the conforming loan limit as an instrument for lower cost of financing and higher supply."
    http://www.mit.edu/~aschoar/Credit-Supply-and-House-Prices.pdf


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  • #247
    Piliger
    Registered Users, Registered Users 2 Posts: 6,741 ✭✭✭Piliger


    KyussBishop wrote: »
    No - the way giving easier access to credit, leads to house prices being bid up, is a factual one.

    Wrong. The discussion I was responding to concerns blame, not facts.


  • #248
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Piliger wrote: »
    Wrong. The discussion I was responding to concerns blame, not facts.
    The facts I show, put the blame firmly in the hands of the banks/central-bank and government - using the fact, that they are the ones in the primary position, to stop cheap credit from bidding up house prices.


  • #249
    Iwasfrozen
    Registered Users, Registered Users 2 Posts: 16,250 ✭✭✭✭Iwasfrozen


    KyussBishop wrote: »
    This is not a moral argument Piliger, it is a factual one: When private debt is low, and access to excessive credit/loans is freed up, then - unless there are other restrictions in place - this will lead to house prices getting bid up.

    This is well known among economists - this isn't something any individual borrower can control.

    This places responsibility for preventing excessive credit issuance, firmly with the banks/central-bank and government.
    Why? The house prices wouldn't rise if people weren't willing to pay the higher prices.


  • #250
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    KyussBishop wrote: »
    Money-as-debt is the problem - think about it: If all money starts out 1:1 with debt, and if Debt carries interest, then the ratio of Debt:Money is going to grow forever - with the total stock of Debt growing many multiples the size of Money, 10x, 40x, 100x etc.; this is unsustainable.

    In such a monetary system, the only possible way to reduce the Debt:Money ratio, is to lend out more money (introducing new money/debt at a 1:1 ratio, bringing Debt:Money closer to that ratio) - and this (for complicated reasons) requires accelerating economic growth, forever, which is a physical impossibility since the planet has finite resources.

    And this is where I part company with well intentioned leftwingers.

    The carrying capacity of the earth depends on technology. Malthusians disregard this. But the earth can feed more people than Malthus could have imagined. Food has been growing faster than population growth, which is dramatically slowing, and the limit of energy we can harvest is the sun and our own nuclear reactions. Rare minerals are abundant in the solar system.

    The limits to growth are technological.


  • #251
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    Iwasfrozen wrote: »
    Why? The house prices wouldn't rise if people weren't willing to pay the higher prices.

    What kind of moral or economic argument is that? People spent money during the boom. Result ? The ratio of debt to GDP is 120%.


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  • #252
    Iwasfrozen
    Registered Users, Registered Users 2 Posts: 16,250 ✭✭✭✭Iwasfrozen


    Frank Lee Midere wrote: »
    What kind of moral or economic argument is that? People spent money during the boom. Result ? The ratio of debt to GDP is 120%.

    What's the alternative? Stop banks giving people money so they can't pay a price they would otherwise be willing to?


  • #253
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    Permabear wrote: »
    This post had been deleted.


    And astrologers are far from working out a cure for cancer.


  • #254
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Iwasfrozen wrote: »
    Why? The house prices wouldn't rise if people weren't willing to pay the higher prices.
    It only requires some people to start getting house prices bid up, and then you get appraisers raising the price of houses in entire areas (pricing out otherwise prudent potential buyers, or forcing them to consider bigger loans).

    The house prices wouldn't rise, if the credit wasn't give out so cheap to those people bidding up prices in the first place.

    Cheap credit is something you can easily do something about - some people bidding up house prices, is something you can't do anything about (short of cutting the ease with which they get credit).


  • #255
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Frank Lee Midere wrote: »
    And this is where I part company with well intentioned leftwingers.

    The carrying capacity of the earth depends on technology. Malthusians disregard this. But the earth can feed more people than Malthus could have imagined. Food has been growing faster than population growth, which is dramatically slowing, and the limit of energy we can harvest is the sun and our own nuclear reactions. Rare minerals are abundant in the solar system.

    The limits to growth are not technological.
    A good article here: An economic system that depends on neverending exponential growth, will eventually cook the earth due to the laws of thermodynamics (this article is from an ex-NASA guy, and is extremely good):
    http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/ (no, not DeVore, despite the same name :pac:)

    An economic system dependent upon neverending growth, is physically impossible/unsustainable in the long run.


  • #256
    Iwasfrozen
    Registered Users, Registered Users 2 Posts: 16,250 ✭✭✭✭Iwasfrozen


    KyussBishop wrote: »
    It only requires some people to start getting house prices bid up, and then you get appraisers raising the price of houses in entire areas (pricing out otherwise prudent potential buyers, or forcing them to consider bigger loans).

    The house prices wouldn't rise, if the credit wasn't give out so cheap to those people bidding up prices in the first place.

    Cheap credit is something you can easily do something about - some people bidding up house prices, is something you can't do anything about (short of cutting the ease with which they get credit).
    The point I'm making is that if a person is willing to pay X euros for a house where X is an inflated price from Y then the house must surely be worth at least X euros to the person making the transaction, if it wasn't they wouldn't be willing to buy it at that price.

    It's alright saying the house prices wouldn't rise if the means of buying the house i.e cheap available credit was deprived to the buyer but that ignores the other half of the story.

    House prices wouldn't be able to go up if buyers weren't willing to pay higher prices, since they are willing to pay higher prices clearly houses are under priced.


  • #257
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Iwasfrozen wrote: »
    What's the alternative? Stop banks giving people money so they can't pay a price they would otherwise be willing to?
    The alternative, is to prevent excessive loans that bid up house prices, and to hold the banks/central-bank and government responsible/accountable, for ensuring that this is policed properly.


  • #258
    andmc
    Registered Users, Registered Users 2 Posts: 24 ✭andmc


    Piliger wrote: »
    I am very happy with austerity. We are sill spending money that we don't have and I abhor the attitude of entitlement that some people have, where they believe that we are entitled to spend more than we have. After going independent last time I am voting FG this time. They are doing an excellent job in general and the coalition is working very well imho.

    So I'm not the only one.

    Agreed!


  • #259
    L'Enfer du Nord
    Registered Users, Registered Users 2 Posts: 587 ✭✭✭L'Enfer du Nord


    Iwasfrozen wrote: »
    What's the alternative? Stop banks giving people money so they can't pay a price they would otherwise be willing to?

    Well many people do believe that the absolute most they can borrow/afford is the amount they should spend on a house. There really aren't that many people who say' I've been approved for 300,000 but I only want to borrow 200,000'. Anecdotally banks seem to be pretty cautious at the moment in relation to income multiples, LTV etc. so people borrowing more than they can afford to pay back isn't too common. Of course politicians have already stepped into the frey with the construction stimulus package.


  • #260
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    Iwasfrozen wrote: »
    What's the alternative? Stop banks giving people money so they can't pay a price they would otherwise be willing to?

    I really don't understand what you are even trying to say. I mean it looks like you are making an "argument to absurdity" there and it seems sarcastic but the actual sentence is totally sane.

    Yes. Let's stop people paying a price they would "otherwise agree to" or else we'll end up buying used toothpaste for ten million euros.

    That entire train of though assumes that people have a right to borrow to buy what they want at whatever absurd price they want at a future cost to society and future taxpayers at whatever it costs. They don't.


  • #261
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Iwasfrozen wrote: »
    The point I'm making is that if a person is willing to pay X euros for a house where X is an inflated price from Y then the house must surely be worth at least X euros to the person making the transaction, if it wasn't they wouldn't be willing to buy it at that price.

    It's alright saying the house prices wouldn't rise if the means of buying the house i.e cheap available credit was deprived to the buyer but that ignores the other half of the story.

    House prices wouldn't be able to go up if buyers weren't willing to pay higher prices, since they are willing to pay higher prices clearly houses are under priced.
    Just because you can massively overprice houses beyond the sustainable affordability of much of the population, because of cheap credit, doesn't mean it's ok just because 'some' people will buy them.

    You're ignoring that you only need some people (different to 'people' - as in, people in general) to bid up house prices, and that this then affects everybody looking to buy a house.

    What's your argument for fixing it? "Tell the population not to buy overpriced houses"? That's not an argument for fixing it, that's an argument for trying to assign blame. If only one argument can actually fix it - setting restrictions on credit - then that's where the primary responsibility lies, as it's the only practical way to put a check on this problem.


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  • #262
    Iwasfrozen
    Registered Users, Registered Users 2 Posts: 16,250 ✭✭✭✭Iwasfrozen


    KyussBishop wrote: »
    The alternative, is to prevent excessive loans that bid up house prices, and to hold the banks/central-bank and government responsible/accountable, for ensuring that this is policed properly.
    But why blame the banks who are only providing people with the means to spend what they consider the house to be worth?

    Surely if there is blame it rests with both parties?


  • #263
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    KyussBishop wrote: »
    Just because you can massively overprice houses beyond the sustainable affordability of much of the population, because of cheap credit, doesn't mean it's ok just because 'some' people will buy them.

    You're ignoring that you only need some people (different to 'people' - as in, people in general) to bid up house prices, and that this then affects everybody looking to buy a house.

    You're fishing for a moral argument for pinning blame on the buyers here, when still the only actual policy change that can prevent/fix any of this, is in the hands of the banks/central-bank and government - this puts responsibility firmly in the hands of those institutions.


    What's your argument for fixing it? "Tell the population not to buy overprices houses"? That's not an argument for fixing it, that's an argument for trying to assign blame. If only one argument can actually fix it - setting restrictions on credit - then that's where the primary responsibility lies, as it's the only practical way to put a check on this problem.

    No. Buyers are 50% responsible. At least.

    The problem is there is no moral hazard. Banks are too big to fail. Mortgage holders are too "what about the famine" to repossess.


  • #264
    Iwasfrozen
    Registered Users, Registered Users 2 Posts: 16,250 ✭✭✭✭Iwasfrozen


    KyussBishop wrote: »
    Just because you can massively overprice houses beyond the sustainable affordability of much of the population, because of cheap credit, doesn't mean it's ok just because 'some' people will buy them.
    What's overpriced? Surely every commodity is worth what it's purchaser is willing to pay for it? If people are willing to buy a house at price X then how do you determine if X is an "unsustainable" (what does that even mean anyway?) price?
    You're ignoring that you only need some people (different to 'people' - as in, people in general) to bid up house prices, and that this then affects everybody looking to buy a house.
    That's the way business works. I provide a service or commodity, I raise my price, now the ball is in your court. You can either accept the price I have set, in which case the price I have set is at least equal to or less than your valuation of the property, or you can say no thank you and be on your way.
    You're fishing for a moral argument for pinning blame on the buyers here, when still the only actual policy change that can prevent/fix any of this, is in the hands of the banks/central-bank and government - this puts responsibility firmly in the hands of those institutions.
    The buyers are to blame, at least as much as the banks are.

    It's daft to blame the banks for providing buyers with the means to inflate prices... for inflating prices.


  • #265
    Convexity
    Banned (with Prison Access) Posts: 8 ✭Convexity


    Frank Lee Midere wrote: »
    What kind of moral or economic argument is that? People spent money during the boom. Result ? The ratio of debt to GDP is 120%.

    Imagine an economy of just 2 people and 1 euro. The only two products in the economy are strawberries and grapes. Even though there is only 1 euro in the economy the GDP can be thousands of euro, and that is healthy, do you understand this?


  • #266
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Iwasfrozen wrote: »
    But why blame the banks who are only providing people with the means to spend what they consider the house to be worth?

    Surely if there is blame it rests with both parties?
    Whoa hold up here: You have no problem with banks offering excessively cheap credit - even when you know this leads to house prices being bid up? :confused:

    Allowing that, and then being surprised at house prices being bid up, is like giving the population easy access to guns, and being surprised that the murder/gun-injury/successful-suicide rate goes up - then ignoring the massive societal problem that creates, and then just blaming it on the population, not on the easy access to guns.


  • #267
    Mike2k
    Registered Users, Registered Users 2 Posts: 23 ✭Mike2k


    It's all about mobilising the angry masses, part of me would expect anti-austerity, socialism et al to convert to right wing attitudes if they were in power. Some of them are stuffy yokes anyway with masses of cash.


  • #268
    Convexity
    Banned (with Prison Access) Posts: 8 ✭Convexity


    KyussBishop wrote: »
    Whoa hold up here: You have no problem with banks offering excessively cheap credit - even when you know this leads to house prices being bid up? :confused:

    Allowing that, and then being surprised at house prices being bid up, is like giving the population easy access to guns, and being surprised that the murder/gun-injury/successful-suicide rate goes up - then ignoring the massive societal problem that creates, and then just blaming it on the population, not on the easy access to guns.

    Banks should be allowed to give cheap credit, but if they go bust they should suffer the consequences and not be saved by the tax payer.


  • #269
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    Convexity wrote: »
    Imagine an economy of just 2 people and 1 euro. The only two products in the economy are strawberries and grapes. Even though there is only 1 euro in the economy the GDP can be thousands of euro, and that is healthy, do you understand this?

    I don't think anybody could understand that.


  • #270
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Frank Lee Midere wrote: »
    No. Buyers are 50% responsible. At least.

    The problem is there is no moral hazard. Banks are too big to fail. Mortgage holders are too "what about the famine" to repossess.
    The only people with the power to actually do anything to stop a property bubble developing, are the banks/central-bank and government - and they do this by restricting loans.

    On a purely practical level, the primary moral responsibility has to lie with the group who actually are practically capable of acting to prevent a problem from developing.

    The wider population does not have this capability (what exactly is going to be done, to prevent bidding up house prices? :confused:), so that leaves responsibility with the banks/central-bank and government.


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  • #271
    Frank Lee Midere
    Closed Accounts Posts: 3,780 ✭✭✭Frank Lee Midere


    Convexity wrote: »
    Banks should be allowed to give cheap credit, but if they go bust they should suffer the consequences and not be saved by the tax payer.

    Or banks should not be allowed to give cheap credit and also allowed to go bust. Also we should probably arrest some of them for criminal negligence.


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