Ha found it – in December I was describing how lending had grown while other sectors of the economy were shrinking. If my bus type people (post before this one) are representative that is now no longer true and things have developed. Lending sector (private and probably corporate) might shrink also – worth watching to see if it does. For now it provides just about the only (if highly undesirable) flexibility. Some people cannot shed their debt and I have no idea how many. But if enough people do succeed in borrowing less, and the lending sector does shrink, the next to go is… eh I have forgotten. It’s bit late maybe. Nope I remembered now. Elastic!
After people reduce their borrowing, and given everything else is already tumbleweed, next is something goes spoing and flies out the window. There. Now that I remembered that, I will sleep better I’m sure.
Put very briefly (yawn) the next thing people attempt to cut down on is supposedly unavoidable expenses (food, shelter, utilities, the company they run) If enough people are doing that it signals that the bottom has been hit. But it doesn’t matter because by then the economy is so strained that something or other (could be anything) more fundamental is motivated in an atypical direction with unpredictable consequences. Most usually it’s some version of “payment ceases to roll in as expected” causing a chain reaction amongst interrelated dependencies, and dramatic corrective movements occur not through any external intervention, but just because underlying the economy, under all the layers of skew are still the basic forces like bones. My predictive/deductive/guess powers don’t stretch to knowing what exactly will go wrong this time, but I’m pretty sure something will indeed go spoing and fly out of the window. We just have to go through this mill a few hundred more times before the message finally gets through that deliberately reducing disposable income inevitably results in there being nothing to keep the wheels all turning, particularly if one of them fouls. Everything becomes too inflexible for recovery.
The gap, the place where it can be avoided is right there, where people have to pay not quite all their earnings, (doesn’t matter to whom – in taxes, in licenses, in rent, to lenders). Close that gap to zero, take everything from enough people, and …spoing. Classically, time and again, the theory is put that certain layers of society only, need to be left with money to spend in order to just about keep things ticking. Wrong. The wider the base of available resources the more likelihood that spending will be varied and the healthier the economy – and the less susceptible it is to breakdown when one moving part heads for outer space.
You know, I’ve really had enough of interesting times – they often come with unrest too, also highly unpleasant. Well that’s the worry worried, and I did the dishes in the gap and had a healthy meal. Of pulses. After all the places I’ve lived I can’t believe I’m writing this kind of stuff about Britain and suspecting the meat is contaminated to boot. Oh well, maybe it won’t happen – that’s the one good thing about worries.
Time for bed.