It's always useful to put things in perspective.
In round figures, cost of Irish bank bail-out = £39 billion, Irish population = 4.4 million, cost per head = £9,000.
In round figures, total UK government support to UK banks (share capital, soft loans, guarantees, interest subsidies etc) = over £400 billion, UK population = 62 million, cost per head = £6,500.
So not much difference there.
Further, we are a year or two behind Ireland (or the USA, Spain etc) in terms of the property price crash cycle. From Wiki, Irish house prices since 2000 (click to enlarge):
This leads to two further observations:
1. If an average Irish household is four people, they have gained £36,000 purchasing power parity in terms of paper gain on house value over the last ten years, but have now been landed with a £36,000 tax bill. Does anybody believe still that rising house prices can make us richer?
2. As and when the UK house price crash catches up with Ireland (or USA, Spain etc) we'll be in the same plus/minus nothing position - with a paper gain on the house but an equal and opposite very real tax liability, which will drag down our economy for years or decades.
Diminished
35 minutes ago
3 comments:
Moreover Irish income was about 35% higher than ours before the £ fell so as a proportion of wealth the Irish bail out looks equal to or lower than ours.
The also have one advantage following the house price crash. Their crash was because they had built to many houses so they are in recession but with plenty of cheap housing. Ours was because we had prevented the building of houses & thus artificially pushed up individual prices so we are in recession with a housing shortage.
Thanks for this, very thought provoking.
WRT to point 2. This figure is net.
The bail out was designed to protect the politically connected and give them time to move their assets and move their liabilities onto taxpayers.
It's flat out redistribution to the rich.
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