Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
Spot on. This isn't about screwing you over KHA, that's already happening to all of us with housing benefit payments going to private landlords (unless, of course, you're one of those as well). We (taxpayers) pay for that and it shouldn't have to be so skewed against us.
So as we all agree, the government don't have the experience to run things like the building of a nuclear power plant... so maybe they should recruit some people that do to come onboard and lead the projects? Obviously then they would have to match the salaries and bonuses of the private sector to attract the best people. Then the press find out about the salaries and bonuses that the government is paying using our taxes and there is outrage. So we end up with people who aren't the best of the best and the projects over run and end up costing more than the salary and bonus would have...
It's vicious circle with no one-size-fits-all solution.... and just one of many reasons why politics is ultimately doomed and needs a sea of change to "reset" things again to a sustainable and fair model.
(I just read a lengthy article about the Chagos Islands and Diego Garcia and unfortunately the complicity of the British government of all political leanings has made me completely lose faith in the morals or integrity of any of them. I cancelled my Labour party membership after realising just how repugnant some of the supposed "good men" in that party were. As a result I have lost faith with all politics... the system... the politicians... and the lack of solutions they actually have for any of the problems we face, economically, socially or environmentally. Very depressing. I'm not about to go and live in a field though don't worry. Wibble.)
Not at all - you have just highlighted the positive force which the web can and must become in terms of researching solutions and dialogue which in turn must be aimed at think tanks now and poliricians at the next election.... far more important to look at health, education pensions and benefits + where UK is going than it is to moan about EU and overseas aid... but it is too easy for politicians at the extremes to pick up votes and the ones in the centre to faff about without a clear vision.
They have the capital for HS2 - and my point is that they have to start getting good at it. I don't mean run complex industries, but this sort of guaranteed profit scheme shouldn't be beyond the public sector - the fact that it is, and is accepted is a mistake IMO. We should be challenging the government as to why it is no good at these straightforward things!
Why cant they run utility and train comapnies - the model to make profits is not that complex - the customers are captive after all!
There is a sort of fear of anything public making a profit with politicians and I don't quite undertsand it. So when the Dome was built, a village idiot could have worked out what a lot of potential was there for something like the O2, but politicians think they have to do something educational and laudible with it! In many ways, governments can make these things work much easier than private companies because they can make sure rules/legislation doesn't get in their way!
And when I say government - I meant governments of all colours.
But you are not recognising that the people attracted to politics and the skills required to get to the top have little to do with generating wealth and creating jobs. The nature of the political system of lobbying etc means that people spend as much time trashing the other side and blaming individuals / departments as they do on finding solutions. For instance the railways were privatised in a rediculous way to overcome the strength of the unions - this can be fixed now but no one is rushing to do that
I am recognising it and saying it needs to change.
Do people genuinely believe that HS2 will make a positive effect on the economy if it happens?
If it was a new motorway that was proposed, it would be pushed through regardless of opposition. In principal, of course we should have HS2.
The French have built several TGV routes in recent years, which has revolutionised links between major cities, cutting journey times hugely. Japan has their purpose built high speed routes and other major nations also.
In the UK, we have the Folkestone to London St Pancras Eurostar route. That's it. The rest of the rail network was built 150 years ago or more.
Okay, people will ask who pays for it - but there would be no shortage of companies wanting a share of the pie.
Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
Spot on. This isn't about screwing you over KHA, that's already happening to all of us with housing benefit payments going to private landlords (unless, of course, you're one of those as well). We (taxpayers) pay for that and it shouldn't have to be so skewed against us.
Totally agree. I know it's anathema to free marketeers but at least when the public sector builds houses and rents them out, the costs are transparent. I know some rabid anti-public sector "entrepeneurs" who earn all of their money through being "private" landlords for local authorities. It's a one-way bet for them and shows how imperfect our markets are.
Do people genuinely believe that HS2 will make a positive effect on the economy if it happens?
If it was a new motorway that was proposed, it would be pushed through regardless of opposition. In principal, of course we should have HS2.
The French have built several TGV routes in recent years, which has revolutionised links between major cities, cutting journey times hugely. Japan has their purpose built high speed routes and other major nations also.
In the UK, we have the Folkestone to London St Pancras Eurostar route. That's it. The rest of the rail network was built 150 years ago or more.
Okay, people will ask who pays for it - but there would be no shortage of companies wanting a share of the pie.
Of course we should not have HS2! It's a "glamour project" thought up by politicians to make them look good. I am a bit light on the details, but I read that there are a number of smaller, less glamorous rail projects which, if built instead of HS2, would do more good for businesses and individuals.
Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
Spot on. This isn't about screwing you over KHA, that's already happening to all of us with housing benefit payments going to private landlords (unless, of course, you're one of those as well). We (taxpayers) pay for that and it shouldn't have to be so skewed against us.
Interestingly I am but my point was not in relation to finding cheap housing for those that don't pay for it, I was referring to the 'vote winning' promises that every government seems to make to provide cheap houses for 'our children' to get on the property ladder.
If we are going to build cheap houses for those that don't pay anything towards them to live in that's one thing - all be it that I don't agree that it works our cheaper in the end, but if you are talking about subsidising those that are working and want to buy their own home but can't afford it then I'm out!
Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
How will building cheap houses combat this? I don't want to point the finger at you but to compare 'affordable housing' to a five bed house in Westminster is absolutely crazy!
There should be no housing benefit paid in those ridiculously expensive places to live. Find me somewhere in Westminster where you can acquire the land and build a cheap five bed house to let someone that doesn't pay for it to live and you are probably as likely to find a few billion pounds lying around. The issue with that example is that HB should never be paid at that level. You could build a million cheap houses but all the while HB is going to pay to house people in five beds in Westminster it won't make any difference.
If they really want to save money on HB they should buy whole streets in places like Burnley and Blackburn and force all those living south of Watford to relocate up north.
If demand ourstrips supply then prices go up ~ demand-pull-inflation
If commodity prices rise and force prices up ~ cost-push-inflation
If Lenders ignore risk of non repayment (Fanny thing in the USA which pretty much staretd all this) ~ it all goes bang
If the govt wants to reduce consumer spending it increases interest rates to encouraging savings and reduce borrowings ~- opposite of current UK interest rate policy
That is almost the limit of my 20 year ago macro-economics education.
What I do know is I made a lot of money on property moves during the 90s and earnt a lot of money in the 1995 to 2008 years but it has been crap since.
Things seem good for now - business confidence up and borrowing up but it isn't sustainable. Interest rates will go up at some stage soon ish though which will slow things down. When it all goes pop again, I just hope things cool off a lot a lower than they did last time.
And that is precisely what caused the economy to crash. Because in 2007 when we were unknowingly heading towards the precipice, the group of people most qualified in the whole world to manage the economy were all on here bemoaning Charlton's relegation from the Prem.
Building more affordable housing in the South East would be a good start, along with the infrastructure that is also required.
Why should the government subsidise housing?
I keep reading about the need for affordable housing but if the land costs x and the build cost is y and the house is sold for less than x+y, someone is picking up the bill for the difference. When we say the Government we really mean the tax payer and as I've have to pay full price for my house, along with all the various taxes I've had to pay along the way, I don't really want to pay more for someone to be able to buy a house for less than it costs to build it!
Kings Hill - the government is picking up the bill via housing benefit because of a shortage of housing and lack of replacement of social housing... so they are part of the value chain but with little input and no upside when prices rise or properties sold... Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
How will building cheap houses combat this? I don't want to point the finger at you but to compare 'affordable housing' to a five bed house in Westminster is absolutely crazy!
There should be no housing benefit paid in those ridiculously expensive places to live. Find me somewhere in Westminster where you can acquire the land and build a cheap five bed house to let someone that doesn't pay for it to live and you are probably as likely to find a few billion pounds lying around. The issue with that example is that HB should never be paid at that level. You could build a million cheap houses but all the while HB is going to pay to house people in five beds in Westminster it won't make any difference.
If they really want to save money on HB they should buy whole streets in places like Burnley and Blackburn and force all those living south of Watford to relocate up north.
Who said anything about forcing anyone to go anywhere - a bit over the top?! Read carefully and I am saying politicians and government should look at the value chain to reduce the benefit subsidies and move that finance into building low cost housing in partnership...there are a whole range of measures that can be employed and I won't detail them as I don't know the detail nor do I have time to research... Basically the government distorts markets so why not do it in a way that builds wealth and benefits people?
And that is precisely what caused the economy to crash. Because in 2007 when we were unknowingly heading towards the precipice, the group of people most qualified in the whole world to manage the economy were all on here bemoaning Charlton's relegation from the Prem.
Nutshell!
Need to get Dave Cameron, Ed Milliband & Nigel Farage signed up to Charlton Life , then we'll get the country fixed.
It would be a massive mistake to raise interest rates too soon, but a mistake I fear that is on the cards!
How screwed are people going to be when interest interest rates start to go up , loads of houses have started to go up for sale around me ( maybe there trying to tell me something :-0 ) my concern is if people move house now that they will be screwed in the future , when mortgages & interest rates rise, surely they can't stay at this level?
I'm not an economist but didn't Japan have or still have zero interest rates for 10 years
Rather than raise interest rates they maybe able to let the pound slid a bit in value, that would help exports and have an inflationary effect on imports. That is supposing they have enough support in the gilt market to cover the public sector borrowing requirements and the inflationary effect is not too much. People are already feeling the pinch and it would make things worse, of course that is already the hot political topic. It may not be a nice option to allow the pound to slide and inflation to rise but it is better than a property crash.
Back in the 60's, inflation was supposedly the enemy. Now some are saying that deflation ( Italy Spain Greece etc.) is heading us for a Japanese style mega collapse. I am getting hopelessly confused, more so than normal that is! Who does know what the hell they are talking about and how do I know who to believe?
Back in the 60's, inflation was supposedly the enemy. Now some are saying that deflation ( Italy Spain Greece etc.) is heading us for a Japanese style mega collapse. I am getting hopelessly confused, more so than normal that is! Who does know what the hell they are talking about and how do I know who to believe?
Charlton Life's normally right , best to go with the thoughts on here....
Interest rates are the reason for the long term problem. While raising them might "push people over the edge" it's ultimately necessary. The only reason that it hasn't happened is that governments fear the short term backlash of doing the right thing and are prepared to risk the long term health of the nation. It's like letting a kid have sweets because it bubbles when you take them away. Better to have a moany kid that an obese, toothless adolescent.
At the moment low interest rates and increasingly available credit does nothing but encourage people, companies and countries to spend what they don't have. Those that prosper in the long term will be those that shielded themselves from rate rises.
JP Morgan have now agreed a $5.1BN settlement with FHFA, the US mortgage company regulator, with regard to the poor quality of mortgages that the bank sold to them during the housing boom. $4BN goes towards ending any lawsuit & $1.1BN to repurchase mortgages.
JPM still face further settlement talks as part of the investigation into past sales of mortgage bonds that could total another $9BN - $4BN in consumer relief, $3BN for investors who purchased poor-performing securities issued by the bank and another $2BN in penalties.
They also face action from a group of bondholders which is expected to see a further $6BN settlement.
The punchline here...these fines are tax deductible!!! The potential $20.1BN above would see the bank actually pay $13.7BN.
Next in line to settle is likely to be Bank of America...
Interest rates are the reason for the long term problem. While raising them might "push people over the edge" it's ultimately necessary. The only reason that it hasn't happened is that governments fear the short term backlash of doing the right thing and are prepared to risk the long term health of the nation. It's like letting a kid have sweets because it bubbles when you take them away. Better to have a moany kid that an obese, toothless adolescent.
At the moment low interest rates and increasingly available credit does nothing but encourage people, companies and countries to spend what they don't have. Those that prosper in the long term will be those that shielded themselves from rate rises.
I'm not sure I agree with this completely. Much of the borrowing is now higher than it was - credit card interest rates are, on average, fifty percent higher. Unsecured lending is also much more expensive than it was before the crash. There are still some very cheap mortgages, but most variable rates have risen to an acceptable level for the lending institutions.
Only those on long term tracker mortgages are really much better off, and I'm not sure there are many of those in the grand scheme of things.
The issue with raising rates is that those that have mortgage rates at about 4.5%, that cannot remortgage now (for what ever reason) would be unable to manage and would have to sell or be repossessed. I think having a few who are making a lot of money (and maybe spending it) is better than having thousands losing their homes.
I think a better analogy to the one with the fat kids having too many sweets would be to suggest that's it's better to have children under nourished than to have their parents given cheap mortgages so that they can feed them properly. I know that no one would want that but I think there are far more people needing cheap interest rates to be able to afford to house and feed their families than there are spending like crazy because credit is too cheap.
One can argue that low interest rates discourage investment and spending. Low interest rates drive up asset prices since the future income streams they generate are discounted at lower rates (this can be clearly seen in property and equities in recent years) - this has been one of the clear goals of quantitative easing and it's worked.
However high prices for assets discourage new investment because entrepreneurs/speculators/investors cannot generate the rates of returns necessary to justify the (higher) outlay. This trend also generates greater inequality since assets are disproportionately owned by the rich.
This in my view would explain why so little of the money printing has reached the real economy and instead is sitting in bank reserves ie. there is as much a 'demand for credit' problem as a 'supply of credit' one.
Looked at another way and to KHA's point, whilst higher rates would no doubt cause distress for some homeowners, the likely fall in house prices would allow many more first time buyers to finally own their own home.
One can argue that low interest rates discourage investment and spending. Low interest rates drive up asset prices since the future income streams they generate are discounted at lower rates (this can be clearly seen in property and equities in recent years) - this has been one of the clear goals of quantitative easing and it's worked.
However high prices for assets discourage new investment because entrepreneurs/speculators/investors cannot generate the rates of returns necessary to justify the (higher) outlay. This trend also generates greater inequality since assets are disproportionately owned by the rich.
This in my view would explain why so little of the money printing has reached the real economy and instead is sitting in bank reserves ie. there is as much a 'demand for credit' problem as a 'supply of credit' one.
Looked at another way and to KHA's point, whilst higher rates would no doubt cause distress for some homeowners, the likely fall in house prices would allow many more first time buyers to finally own their own home.
Or just simply families that require a roof ever their heads. Is it socially responsible to drive such a basic human requirement beyond the reach of young families while at the same time restricting a social housing alternative. Always economics must have a political imperative to make it possible, no matter how correct.
One can argue that low interest rates discourage investment and spending. Low interest rates drive up asset prices since the future income streams they generate are discounted at lower rates (this can be clearly seen in property and equities in recent years) - this has been one of the clear goals of quantitative easing and it's worked.
However high prices for assets discourage new investment because entrepreneurs/speculators/investors cannot generate the rates of returns necessary to justify the (higher) outlay. This trend also generates greater inequality since assets are disproportionately owned by the rich.
This in my view would explain why so little of the money printing has reached the real economy and instead is sitting in bank reserves ie. there is as much a 'demand for credit' problem as a 'supply of credit' one.
Looked at another way and to KHA's point, whilst higher rates would no doubt cause distress for some homeowners, the likely fall in house prices would allow many more first time buyers to finally own their own home.
Or just simply families that require a roof ever their heads. Is it socially responsible to drive such a basic human requirement beyond the reach of young families while at the same time restricting a social housing alternative. Always economics must have a political imperative to make it possible, no matter how correct.
I broadly agree (hence my last paragraph) - however if you asked the average person trying to join the housing ladder if they thought higher interest rates would help them, most would probably (I think) say 'no' yet I would argue the opposite.
Comments
Surely it is better to subsidise / participate in low cost build and then use the proceeds to reinvest... creates jobs, makes money reduces rents... instead of lining private landlord pockets.
One landlord bought a 3 bed in Westminster for 300k, converted to a 5 bed and managed to receive £300k in HB over three years... so the property paid for by government but owned by an individual.
In general I dont think your premise of no intervention flies
It's vicious circle with no one-size-fits-all solution.... and just one of many reasons why politics is ultimately doomed and needs a sea of change to "reset" things again to a sustainable and fair model.
(I just read a lengthy article about the Chagos Islands and Diego Garcia and unfortunately the complicity of the British government of all political leanings has made me completely lose faith in the morals or integrity of any of them. I cancelled my Labour party membership after realising just how repugnant some of the supposed "good men" in that party were. As a result I have lost faith with all politics... the system... the politicians... and the lack of solutions they actually have for any of the problems we face, economically, socially or environmentally. Very depressing. I'm not about to go and live in a field though don't worry. Wibble.)
In principal, of course we should have HS2.
The French have built several TGV routes in recent years, which has revolutionised links between major cities, cutting journey times hugely.
Japan has their purpose built high speed routes and other major nations also.
In the UK, we have the Folkestone to London St Pancras Eurostar route. That's it.
The rest of the rail network was built 150 years ago or more.
Okay, people will ask who pays for it - but there would be no shortage of companies wanting a share of the pie.
If we are going to build cheap houses for those that don't pay anything towards them to live in that's one thing - all be it that I don't agree that it works our cheaper in the end, but if you are talking about subsidising those that are working and want to buy their own home but can't afford it then I'm out!
There should be no housing benefit paid in those ridiculously expensive places to live. Find me somewhere in Westminster where you can acquire the land and build a cheap five bed house to let someone that doesn't pay for it to live and you are probably as likely to find a few billion pounds lying around. The issue with that example is that HB should never be paid at that level. You could build a million cheap houses but all the while HB is going to pay to house people in five beds in Westminster it won't make any difference.
If they really want to save money on HB they should buy whole streets in places like Burnley and Blackburn and force all those living south of Watford to relocate up north.
If commodity prices rise and force prices up ~ cost-push-inflation
If Lenders ignore risk of non repayment (Fanny thing in the USA which pretty much staretd all this) ~ it all goes bang
If the govt wants to reduce consumer spending it increases interest rates to encouraging savings and reduce borrowings ~- opposite of current UK interest rate policy
That is almost the limit of my 20 year ago macro-economics education.
What I do know is I made a lot of money on property moves during the 90s and earnt a lot of money in the 1995 to 2008 years but it has been crap since.
Things seem good for now - business confidence up and borrowing up but it isn't sustainable. Interest rates will go up at some stage soon ish though which will slow things down. When it all goes pop again, I just hope things cool off a lot a lower than they did last time.
Read carefully and I am saying politicians and government should look at the value chain to reduce the benefit subsidies and move that finance into building low cost housing in partnership...there are a whole range of measures that can be employed and I won't detail them as I don't know the detail nor do I have time to research...
Basically the government distorts markets so why not do it in a way that builds wealth and benefits people?
Need to get Dave Cameron, Ed Milliband & Nigel Farage signed up to Charlton Life , then we'll get the country fixed.
How screwed are people going to be when interest interest rates start to go up , loads of houses have started to go up for sale around me ( maybe there trying to tell me something :-0 ) my concern is if people move house now that they will be screwed in the future , when mortgages & interest rates rise, surely they can't stay at this level?
I'm not an economist but didn't Japan have or still have zero interest rates for 10 years
At the moment low interest rates and increasingly available credit does nothing but encourage people, companies and countries to spend what they don't have. Those that prosper in the long term will be those that shielded themselves from rate rises.
JPM still face further settlement talks as part of the investigation into past sales of mortgage bonds that could total another $9BN - $4BN in consumer relief, $3BN for investors who purchased poor-performing securities issued by the bank and another $2BN in penalties.
They also face action from a group of bondholders which is expected to see a further $6BN settlement.
The punchline here...these fines are tax deductible!!! The potential $20.1BN above would see the bank actually pay $13.7BN.
Next in line to settle is likely to be Bank of America...
http://moneymorning.com/2013/10/23/what-the-jpm-settlement-means-for-wall-street/
Only those on long term tracker mortgages are really much better off, and I'm not sure there are many of those in the grand scheme of things.
The issue with raising rates is that those that have mortgage rates at about 4.5%, that cannot remortgage now (for what ever reason) would be unable to manage and would have to sell or be repossessed. I think having a few who are making a lot of money (and maybe spending it) is better than having thousands losing their homes.
I think a better analogy to the one with the fat kids having too many sweets would be to suggest that's it's better to have children under nourished than to have their parents given cheap mortgages so that they can feed them properly. I know that no one would want that but I think there are far more people needing cheap interest rates to be able to afford to house and feed their families than there are spending like crazy because credit is too cheap.
Just my view!
However high prices for assets discourage new investment because entrepreneurs/speculators/investors cannot generate the rates of returns necessary to justify the (higher) outlay. This trend also generates greater inequality since assets are disproportionately owned by the rich.
This in my view would explain why so little of the money printing has reached the real economy and instead is sitting in bank reserves ie. there is as much a 'demand for credit' problem as a 'supply of credit' one.
Looked at another way and to KHA's point, whilst higher rates would no doubt cause distress for some homeowners, the likely fall in house prices would allow many more first time buyers to finally own their own home.
Or just simply families that require a roof ever their heads. Is it socially responsible to drive such a basic human requirement beyond the reach of young families while at the same time restricting a social housing alternative. Always economics must have a political imperative to make it possible, no matter how correct.