Government to offer loans to buy cars

Generali

Rochdale_Pioneers wrote: »

So to read the free-market crazies right, the arguments are:
1. Only make things people want to buy
2. "Want to buy" actually excludes most people who want to buy a car on credit as has been the norm these last 40 years
3. Only sell cars to people who can pay cash.

Hmmmm, better close all the car factories then. And start making bicycles for all us peons.

If you like you can call me crazy, I've been called worse and probably will again.

Of course if my prescription had be followed we wouldn't be here now but here we are.

What are you going to do with all the cars that our children are going to have to pay for? Give them to poor people so they can't afford to fill them with petrol?

Any

Generali wrote: »

What are you going to do with all the cars that our children are going to have to pay for? Give them to poor people so they can't afford to fill them with petrol?

????????????
Oh, I didn't realise that I can get a car for free now and my children will pay the loan later!!
Is it just me or does anyone else think that that is no longer called "loan"?
I must have misread the article. I thought they will LOAN us the money.

Generali

Any wrote: »

????????????
Oh, I didn't realise that I can get a car for free now and my children will pay the loan later!!
Is it just me or does anyone else think that that is no longer called "loan"?
I must have misread the article. I thought they will LOAN us the money.

1. Government borrows money
2. Government spends money to the benefit of current tax payers.
3. Future tax payers (your children) repay the money plus interest.

To expand, the asset is enjoyed by current tax payers but the liability by future ones.

abaxas

Just give me 10 years 0% on that nice new volvo.

Then I'll buy :P

Any

Generali wrote: »

1. Government borrows money
2. Government spends money to the benefit of current tax payers.
3. Future tax payers (your children) repay the money plus interest.

To expand, the asset is enjoyed by current tax payers but the liability by future ones.

How about just go and shoot ourselves in the head then...
At least it will be quick death... Otherwise we might just wait until everyone is out of the job, government keeps them on the dope, until government runs out of money and then we will all starve to death...

Excuse me gentleman, I think I am going to load my gun now.

Any

Generali wrote: »

1. Government borrows money
2. Government spends money to the benefit of current tax payers.
3. Future tax payers (your children) repay the money plus interest.

To expand, the asset is enjoyed by current tax payers but the liability by future ones.

By the way as long as we are talking about LOANING, it usually works like this:
You get a loan, pay interest, repay the money from future earnings and everyone is happy.
So it would work:
Governmet borrows money - pay interest
They lend us the money - we pay interest to them
They repay the money+interest with the repayments+interest they made from us
Everyone is happy

Generali

Any wrote: »

How about just go and shoot ourselves in the head then...
At least it will be quick death... Otherwise we might just wait until everyone is out of the job, government keeps them on the dope, until government runs out of money and then we will all starve to death...

Excuse me gentleman, I think I am going to load my gun now.

Well that's your choice. I don't recommend it.

The fact remains that if the Government borrows money it has to be repaid by future taxpayers and that means our children.

They can spend it on drugs, education, nice carpets for their offices or on providing cheap credit for car buyers. The outcome is the same.

StevieJ

wintersunshine wrote: »

Too right. !!!!!!? and his own brand of sado-economics - what a scary prospect that would be.

Don't go there! last time they did Carol disappeared for a month and I wouldn't like that, although you do appear to have captured the !!!!!! economic theory in all its glory :eek:

Generali

Any wrote: »

By the way as long as we are talking about LOANING, it usually works like this:
You get a loan, pay interest, repay the money from future earnings and everyone is happy.
So it would work:
Governmet borrows money - pay interest
They lend us the money - we pay interest to them
They repay the money+interest with the repayments+interest they made from us
Everyone is happy

History tells us that when Governments make soft loans they are rarely repaid to schedule if at all, eg Concorde, British Leyland, Jaguar, DeLorean...

JayScottGreenspan

Sir Humphrey does, of course, have a point about the downward spiral of reduced demand and reduced incomes. Government intervention can dampen the extent of the downward spiral and prompt a swifter recovery. However, there is a cost to this, which will mainly be paid by future taxpayers.

One canot argue that all bailouts/interventions are wise because they diminish the downturn just as it would be insane to argue that all bailouts are unwise because of the cost to taxpayers. The critical thing is the balance between the benefit and the cost.

Guaranteeing car-loan bonds going into a recession is suicide.
+ Small undirected benefit to foreign motor manufacturers employing UK staff.
- Massive cost, massive potential losses.

In summary: these bonds will have high rates of default.
(In event of redundancy which would you pay first: your car loan or your mortgage... hmmm.)