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Wednesday, 2 September 2009

Britain's in 'saving money' shock

News and analysis out today shows that "Last month British households paid back more debt than they took out, for the first time in at least 16 years."
Althought this means there is a danger of serious tightening in the economy, to say nothing of the prospect of things like deflation, this is good at a very macro-strategic level.
Our economy has been based on the idea that we could borrow for ever and ignore savings, which lead to the massive property bubble which burst so spectacularly recently.
From the point of view of the economy, and someone with a job, this is good news because it means people are moving towards a more sensible and sustainable economy. For those poor so n sos out of work, it means things may not get any easier any time soon. Which is where the state comes in, as usual, to clean up the private sector's mess.

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