As an ex-chancellor (quite a good one) and an elder statesman, Ken Clarke’s thoughts always have traction and his warnings about the effect on the middle class of next year’s cuts should be heeded. It is indeed true that it will not be just those on benefits who will fee the pinch. It is also true that the totality of our financial position is calamitous.
The middle class will suffer because so much of their expansion and rising wealth is property based and borrowing driven. An economy based on never ending increase in the value of housing assets is unsustainable, yet this is the only economic model that most people know and understand.
It is important to take another look at the U.S., because where it goes we go too. Property prices are falling again in America and foreclosures are again rising. In some areas of California, another overspent over borrowed economy, property prices are now down 67% from their peak and still falling.
Ken Clarke is right to warn. Age and experience give him a vision which does not rely on rose tinted glasses. Maybe it’s time time we all took those illusory accessories off.
Thanks for helping out, wonderful info. “The surest way to be deceived is to think oneself cleverer than the others.” by La Rochefoucauld.