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You're talking about one of the classic causes of housing bubbles. Deregulation and easy access to mortgages leading to increased debt relative to GDP (rather than increasing GDP - increasing GDP does not really relate to easier credit). If you want to see the type of effects I'm talking about, have a read of this[^].
increasing GDP does not really relate to easier credit
From what I heard, GDP isn't really a good measure of anything really. As your GDP would increase if Bill Gates would move to the UK, but you wouldn't necessarily be any better off for it. I seem to recall that GDP came into play after WW2 as a measure of how well a country was doing (when it came from nothing really) and was really never intended to be used widely for any economical understanding.
As you quoted statement can be related to GDP if nobody could get any money to invest in new equipment at your workplace etc. But GDP wouldn't tell you if it was a good idea or not.
Houses are only included in a GDP calculation if they are new builds. Second-hand goods, including the buying and selling of existing housing stock is not included for calculating GDP. Inflation is a different question altogether, and mortgages will have an effect.
It will impact inflation yes - but because of the creation of money behind those mortgages will increase the amount of money in the economy.
What happens is - you walk into the bank and borrow £250k. The bank creates an asset (the mortgage) from that and transfers electronic money backed by that asset to you. They have a zero sum (ish) thing going on but £250k that didn't exist in the economy before the transaction has come into being. If everyone does this vast sums of money "just come into being" and more money chasing the same supply of products and services pushes up prices.
Something like 90% of the money in the UK economy came into being this way.
Was talking to my Dad about stuff that used to go on in the tool-room he used to work in. If a job went wrong it was thrown in the scrap me.tal bin, the wag pitching it would often say "Oh well, good enough for government". Then he watched a TV programme ("American Chopper", or "Tank Kings") where exactly the same phrase was used.
Is this phrase in common use across the pond? I told my dad I'd ask.
Thanks. And to all those who replied with an explanation, it means the same here (ie shoddy work only the government would accept and pay for). The US may think it leads the world in incompetent government, but by jingo Blighty is more than giving it a run for its money
Crush: Okay. Squirt here will now give you a rundown of proper exiting technique.
Squirt: Good afternoon. We're gonna have a great jump today. Okay, first crank a hard cutback as you hit the wall. There's a screaming bottom curve, so watch out. Remember: rip it, roll it, and punch it.
Marlin: It's like he's trying to speak to me, I know it.
Marlin: Look, you're really cute, but I can't understand what you're saying. Say the first thing again.
OK, let me have a go. I consider myself multilingual in that, amongst others, I am fluent in both English and American.
A room for storing tools, such as drills, Spanners (Wrenches) and can also be a workroom (Tool-shed or Garage) containing things like Table Saws, Lathes (a spinning, wood-shaving thingy for making chair legs, Banister struts and the like) and other fixed tools.
"A wit"... a jokester, someone who can be amusing in conversation.
- I would love to change the world, but they won’t give me the source code.