Radix Malorum est Cupiditas

...is frequently mistranslated as "money is the root of all evil" which is wrong as it actually means "The love of money is the root of all evil". It's the love bit that makes the crucial difference and it also goes some way to explain the miserable condition of our national finances today.

Of course, the banks have a substantial - a very substantial - responsibility. And don't get me started on how bankers can earn bonuses when their firms are majority owned by the tax payer and they are still making losses. (I'm still considering a 100% tax on bank bonuses to be a good idea.)

But the fundamental reason we got it into such a mess is greed, pure and simple greed. Which is, oddly enough, one of the original translations of the Latin maxim. But it's something for which we all bear responsibility. We've all been responsible: spending irresponsibly beyond our earnings, buying houses at ridiculous salary multiples and for what? Has it made us any happier? It is therefore no surprise that clever financiers seeking more complex and remunerative products saw a market for bundling debt and then re-selling it on the international financial markets and it is therefore something for which we are all responsible.

All of which partially explains why I am in favour of today's increase in VAT to 20%.

It is a tax on discretionary spending with the most important essentials excluded :food, children's clothing and (most importantly) books. It therefore largely applies to items that we do not necessarily need to buy and should therefore reconsider. A trip to the Perth recycling centre is instructive in this regard. Look at the electronics recycling section and count how many modern functioning TVs have been discarded. Multiplied across the country and it shows just how much money is unnecessarily being spent replacing perfectly serviceable electrical goods.

With house prices being the main reason for the current recession, it makes me wonder why VAT shouldn't also apply to house prices. It would discourage spending, irresponsible mortgage lending and encourage people to settle in their existing homes. Spending on home improvements could be excused from VAT to maintain employment in the building trade and to encourage people to adapt their existing home to suit their purposes rather than move every three or five years.

I think the bottom line is that I would argue that a large, modern home and a flat screen TV is not a recipe for happiness. It brings with it additional pressure and worry and the potential for a greater fall if things go wrong. Nor is my suggestion meant to inhibit ambition. In fact I am extremely ambitious but my ultimate ambition is for contentment and that wont be affected by the rise in VAT, a bigger house or a flat screen TV.