Friday, 22 March 2013

The 'bubble-wrap' Budget: mortgage guarantees

Grey clouds and chilling winds continue to depress Londoners - and the coalition government's Budget seemed only to darken moods, writes Paul Coleman.
   The financial press scoured this week's Budget for 'good news'. Most cautiously welcomed the plan for government to guarantee some £130 billion of mortgages for people seeking to buy newly-built homes.
   The common account read: if people can raise a deposit, secure a home loan and buy a home, this is great for the UK's stagnant economy.

Apparently, according to the government, our chief aspiration as human beings is to mortgage ourselves and buy a home. Maybe, but it seems forgotten that the catastrophic 2008 financial meltdown stemmed from a housing mortgage bubble in the United States.
   And so, what's the UK government's economic panacea to re-boot the country's flagging economy? Yes, a housing mortgage bubble.
   Few politicians speak of the need to generate lasting economic growth by investing in manufacturing, technology, infrastructure and in real jobs.
  And the issue of job creation remains mired in party political tittle the UK and in America.

Paul Coleman, London Intelligence, March 2013

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