Tuesday, 3 July 2012

Selling assets to spend. Invisible borrowing.

Selling assets is a great way for a government or council to carry on as usual but generate less debt in the process. Short term that is.

Long term they are selling their raining day supply and, even worse, committing future governments to additional spending.

This is why we have a complete inability to pay the rents for social housing in London. We sold them and build not more.

A good example is selling a house for £250,000 with a rental value of £12,500 / year.

This could either fund housing for four families for five years, or one indefinitely.

Often the money is consumed immediately and some local facilities are purchased with a great fanfare. But let's just pretend the money was used wisely.

The reduced strain on housing welfare is quickly filled due to both local and international demand. With no measures in place to encourage manageable population growth the population increases until the hardship threshold is met once more.

What happens in year six? We have no money left and four times the burden.

Well, that is another general election away, and not an immediate concern.

What about the hassle of managing it. The private sector does that better? Yes. Let the private sector manage it. Don't sell it..

I have attached a link to an example I found of a Conservative Councillor deciding on short term gain on a property in Earley recently. I found it on Google searching for 'wokingham borough council sell property'

So I thank you, on behalf of our children, for the burden of paying another landlords mortgage or perhaps four . . indefinitely. Another generation having to work that little bit harder.

I don't know whether to be mad at them for driving the middle and working classes into servitude, or sad that the majority of us keep giving them the privilege. Or sad that most of them are good people, with aspirations of success in business, enticed by the success of a corrupt few.

No comments:

Post a Comment