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Government say 'That's it, no more stimulus , the £50 billion is it.'

Just heard it on Channel 4 news, so that's it............... until the next time of course.

No link yet.
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Comments

  • lostinrates
    lostinrates Posts: 55,283 Forumite
    I've been Money Tipped!
    edited 6 August 2009 at 7:16PM
    I have to say: I'm confused.
    We needed it to keep things moving, so we're told, finally house sales & car sales are up, industry spouts the odd good news story, then all of a sudden we need more???

    now this is it, fullstop, but suppose after ''this bit'' industry is not so upbeat? Why would they rule out continuing with an action they see as good?

    I'm presuming its only because its ok if the timing is right/to a maximum spend? How do we know these two will be ''wrong'' in the future?
  • ad9898_3
    ad9898_3 Posts: 3,858 Forumite
    I have to say: I'm confused. We needed it to keep things moving, so we're told, finally house sale, car sales are up, industry spouts th odd good news story, then all of a sudden e need more??? now this is it, fullstop, suppose afer ''this bit'' industry is not so upbeat?


    A guy from the car industry was just on, he said the figures for the car industry for July are 2% up on July 2008, yet he said without the scrappage scheme sales would have been 19% down on the same time last year. He also admitted that when the money runs out, car sales will once again fall dramatically

    Proof that the government stimulus is just that, a temporary reprieve with borrowed money for any part of the economy you can think of. Although not quite the same though similar is with house prices, they are being propped up by low IR's, basically money that has been stolen from savers.
  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    ad9898 wrote: »
    A guy from the car industry was just on, he said the figures for the car industry for July are 2% up on July 2008, yet he said without the scrappage scheme sales would have been 19% down on the same time last year. He also admitted that when the money runs out, car sales will once again fall dramatically

    Proof that the government stimulus is just that, a temporary reprieve with borrowed money for any part of the economy you can think of. Although not quite the same though similar is with house prices, they are being propped up by low IR's, basically money that has been stolen from savers.

    I suppose the hope is that the temporary help to the economy is there to plug the gap until the fundamentals return to normal in the economy, and the car market as an example can support itself again. I don't think anyone is pretending any otherwise, it's well acknowledged that the spending isn't designed to cure the problems, just take the edge off a bit.

    It's all sound Keynesian economics, but the problem is the government isn't willing to reduce spending during good times to make the funds available in the bad.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • amcluesent
    amcluesent Posts: 9,425 Forumite
    >Government say 'That's it, no more stimulus , the £50 billion is it.'<

    The WORST sort of economic bungling is to signal to the market exactly what central banks/government will do. Remember when Clown blabbed to everyone he was selling off England's gold, the price duly fell to $300 and he sold us out for a pittance.:mad:
  • ad9898_3
    ad9898_3 Posts: 3,858 Forumite
    Masomnia wrote: »
    I suppose the hope is that the temporary help to the economy is there to plug the gap until the fundamentals return to normal in the economy, and the car market as an example can support itself again. I don't think anyone is pretending any otherwise, it's well acknowledged that the spending isn't designed to cure the problems, just take the edge off a bit.

    It's all sound Keynesian economics, but the problem is the government isn't willing to reduce spending during good times to make the funds available in the bad.

    Bang on with the last statement, all this 'stimulus' would be ok if it were coming from the government piggy bank, it's not though, it's borrowed and we have to pay it back..... with interest.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    ad9898 wrote: »
    A guy from the car industry was just on, he said the figures for the car industry for July are 2% up on July 2008, yet he said without the scrappage scheme sales would have been 19% down on the same time last year. He also admitted that when the money runs out, car sales will once again fall dramatically

    Proof that the government stimulus is just that, a temporary reprieve with borrowed money for any part of the economy you can think of. Although not quite the same though similar is with house prices, they are being propped up by low IR's, basically money that has been stolen from savers.

    I don't reckon the money will actually run out....I think it will be a huge success so needs more :)
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    amcluesent wrote: »
    >Government say 'That's it, no more stimulus , the £50 billion is it.'<

    The WORST sort of economic bungling is to signal to the market exactly what central banks/government will do. Remember when Clown blabbed to everyone he was selling off England's gold, the price duly fell to $300 and he sold us out for a pittance.:mad:

    Extremely good point.
  • tomstickland
    tomstickland Posts: 19,538 Forumite
    10,000 Posts Combo Breaker
    I suspect that it's the usual media spin activity. Sales drop 15% or whatever, then one day they creep up a fraction of a percent and they can start the headlines "car sales rise again".
    Happy chappy
  • Heyman_2
    Heyman_2 Posts: 1,819 Forumite
    amcluesent wrote: »
    >Government say 'That's it, no more stimulus , the £50 billion is it.'<

    The WORST sort of economic bungling is to signal to the market exactly what central banks/government will do.

    Maybe they're trying to stop any speculation in the future, and trying to minimise uncertainty. It's not exactly a revelation either as everyone was expecting that they'd just end with the £25bn, the only surprise is that they added an extra £25bn just to be sure.

    In this instance I don't think it's a bad thing for them to say they're turning the tap off and just waiting to see what the fallout will be.
  • mewbie_2
    mewbie_2 Posts: 6,058 Forumite
    1,000 Posts Combo Breaker
    Heyman wrote: »
    the only surprise is that they added an extra £25bn just to be sure.
    Yeah - it's only 25 big ones. I mean when they were dreaming up this scam after puffing on some serious skunk you could hardly expect them to get it down to the exact billion could you? And as it's helped GB save the world, and the banking system, and the UK, and Europe, and the housing market, and the car market, and.. well everything obviously - then another 25 b's is going to make it even better.

    I'll tell you what. If they get the economy any better, plus say spew out another 100 billion or so, I may well vote Labour again.

    ps. It's no wonder we can't afford to pay our whinging soldiers proper compensation. I mean something has to give - and a choice between Fred Goodwin types and honest Tommies is no choice at all really. Is it?
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