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Comment by nickdothutton | Hacker News Reader

I suspect that if you remove borrowing (by which I mean mortgages, bank loans, credit card debt, and hire-purchase/lease hire agreements), there is very little post WW2 prosperity in the UK. I suspect that most of what most people think of as wealth is merely borrowed money. Either personal debt or government debt or one of the more creative shell-games that are now played with regard to funding (for example) infrastructure like hospitals, schools, or rail.

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When people usually talk about wealth, they mean net worth. If you have a £2 million home in London and a £2 million mortgage to go along with it, your net worth is 0 (ignoring all other potential assets and liabilities). On the other hand, if you've paid it off then you have a net worth of £2 million. So when they talk about the wealth gap increasing, they mean real wealth as in net worth. Some people have ballooning net worth, others don't. Taking mortgages out of the equation doesn't change that.

Unless you're talking about going back in time and arranging things so that no one can ever borrow money from anyone. Sure, without access to credit people would have a hard time buying homes. But that's such a radically different society, from a finance perspective, that it's pretty much meaningless to contemplate. I'm sure people would find other ways to access capital in the absence of credit.

Given how house prices and access to cheap credit are so well correlated, this may not be a bad thing. Before the financialisation boom, housing closely tracked inflation.

> I'm sure people would find other ways to access capital in the absence of credit.

cf the Chinese shadow banking system

You must be kidding. Not one bit of real growth since 1945? Just because there is too much debt in your opinion?

It’s a really weird take you see on occasion. Like, over a third of households in England own their house (or flat) outright, and millions of people are on very generous final salary pensions (closed to new entries of course).

How long did it take to pay back its War Debts?

What would that indicate? The government hadn't paid off the payments from the 1837 Abolition of Slavery Act until 2015, but that was based on the way they structured repayments. To say that from 1837 to 1946 that Britain wasn't a superpower, that would seem a tad absurd to me.

The amount of food and housing (by area, housing got smaller) the average person can afford has gone down in that time.

I don't know about most people, but when economists measure wealth they work out net worth accounting for debts.

They do a mark to market sure but the ops point is that all of it is a debt bubble and if the debt is called back it collapses. So there is an implicit agreement between all the "developed" countries to keep the sham going as long as possible. When it hits... your house will be worth billions.

I remember people saying this back when I was a student in the 80s. Sure we've had booms and busts, and over leveraging is a thing, but I see "the 95% collapse is already happening" videos on youtube occasionally and, yeah, no, it's been already happening for like 10 years now.

These things play out over multiple lifetimes not just one.

I'm sure it's coming any second.

The mistake this sort of analysis makes is assuming nobody will do anything to stop things getting worse, and underestimating the extent to which other things in the economy and society are going well. The same is true in booms, most analysts under value the risks building up in the system. It's the old extrapolating the down trend to infinity in a bust, and extrapolating the upswing to infinity in a boom.

This is why Ukraine didn't collapse under bombing, Russia didn't collapse under sanctions, the Chinese property market is now rallying. It's why the Fed made a profit out of TARP. When things go to crap, the people who can do something don't throw their hands in the air and give up. They get to work.

There are decades where nothing happens and there are weeks where decades happen.

That's the idea. When bad happens, it is uncontrolled. Eventually, bad will happen and no attempt to control it will succeed. But sure, until then, you are right. And there is nothing anyone can really do to prepare except have a "go bag" and have assets and residence in multiple countries.

When I consider how well I'm doing (or not) I drily consider my net worth as one would on a balance sheet. But I don't think this is quite what the average member of the public thinks when they think about wealth and prosperity. By which I mean the visible portion of wealth (not net wealth). I think there is a perception in the UK that we are a far more wealthy country than we really are, both in terms of visible wealth among individuals and the finances of the country. I think many would be surprised at the median level of true wealth (net wealth) in the UK. Interesting figures here:

https://www.nimblefins.co.uk/savings-accounts/average-househ...

Edited for typo.

So the median wealth going into retirement in the UK, that is the wealth for someone bang slap in the middle where half of households are more wealthy than them and half are less wealthy, is about £600,000 pounds. That's actually a lot higher than I was expecting. I would have guessed it would be well under half a mill.

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