On holiday in Spain and we have hired a car. Didn’t get a choice and was given a Kia something, it’s a half breed. It’s also absolute shite. Shit to look at, shit build quality, shit drive. No wonder they’re cheap. I’ll stick to paying the extra and keep buying BMW
Like pretty much everything nowadays credit is king and the motor trade is a good example of it supporting every stage. The end user takes out a loan, PCP or lease, the banks themselves raise cash by lending from other banks & institutions, the leasing company or dealership take out loans to bulk buy from the manufacturer at wholesale prices and the manufacturer takes out loans to fund operations. All so the government can charge a higher luxury car tax to pay off the loans they use to run the country. It's gonna end in tears....
Every loan is also an asset. If you owe me £1, to you it's a debt but to me it's an asset. And the debts equal the assets. Writers moaning about debts, government or private, are really keen never to mention the corresponding assets. Debts are only a problem when they are BAD DEBTS, i.e. unsecured debts which the borrower cannot service. Then the corresponding asset disappears. Stating that a sum of debt exists tells us nothing. It's the level of bad debt, if any, which is important
That's a purely abstract way to look at it and certainly a flawed way to analyse the Government's position. Debt is a massive problem when you are the debtor and the cost of servicing it is so high that it is compromising other budgets and/or spooking lenders. The UK is currently paying £130bn PA on debt interest alone and is having to borrow money simply in order to make those payments. That sum has gone up under Labour and gilt yields are and have been for some time, much higher than they were even at the height of the Liz Truss debacle, although that is rarely mentioned. That's no way to run a railroad and Burnham's "Champagne for everyone!" rhetoric, coupled with being held hostage by his backbenchers vis a vis welfare cuts, plus his own people-pleasing personality and profligate ideology strongly suggest that position is only going to get worse. Then gilt yields will rise even higher, meaning even more money will need to be found to pay the coupon and the whole thing turns into a death spiral.
Avoidance of mentioning assets, or distinguishing good from bad debts. What mainly worries me is the loss of public assets, in the form of the corrupt alienation of valuable infrastructure, businesses, land, stock in trade, etc by Thatcher and her successors.
