Government to offer loans to buy cars

StevieJ

JayScottGreenspan wrote: »

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.)

Don't worry the govt will be paying your mortgage :beer:

Sir_Humphrey

Generali wrote: »

They can spend it on nice carpets for their offices.

ROFL. You have obviously never seen the toilets in our building! It is the young that will bear the brunt of unemployment, just as they did in the early 1980s. So in fact it is surely fair that they (we) are the ones who repay the money down the line. Of course, this is a false distinction, as part of the cost is met by the increased growth that occurs owing to the fiscal stimulus applied.

Generali

StevieJ wrote: »

Don't worry the govt will be paying your mortgage :beer:

It's such a simple way to run an economy:

The Government pays your mortgage so you can buy a car on credit too.
When the Government promise to pay your mortgage runs out they'll pay for your car instead.

Who pays? Who cares?! Just don't let bad stuff happen because bad stuff is bad. And scary.

StevieJ

Sir_Humphrey wrote: »

ROFL. You have obviously never seen the toilets in our building! It is the young that will bear the brunt of unemployment, just as they did in the early 1980s. So in fact it is surely fair that they (we) are the ones who repay the money down the line. Of course, this is a false distinction, as part of the cost is met by the increased growth that occurs owing to the fiscal stimulus applied.

You never know some of them may pay the loans back

Any

Generali wrote: »

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

The government is doing this only to keep people in their jobs...
I don't think you see the whole picture. How much do you think it would cost this government to keep all these people who loose their job on benefits?
And who do you think will pay for that? Current and future tax payers.
At the moment the situation is that they have to choose the better hell.

And I don't think they are going to give the money just to any people... On the end of the day that is why we are where we are - because that is what banks did. And government failed to regulate them. They cannot afford to fail again.

Generali

Sir_Humphrey wrote: »

ROFL. You have obviously never seen the toilets in our building! It is the young that will bear the brunt of unemployment, just as they did in the early 1980s. So in fact it is surely fair that they (we) are the ones who repay the money down the line. Of course, this is a false distinction, as part of the cost is met by the increased growth that occurs owing to the fiscal stimulus applied.

Yeah, you cut off the other examples and left the silly one behind which clearly makes me look silly.

Did the young bear the brunt of unemployment in the early 80s? I thought that a big part was the older workers who couldn't find new jobs. Any stats to back up your assumptions Sir H?

Wookster

Any wrote: »

They cannot afford to fail again.

They'll just bankrupt us in the process.

Generali

Any wrote: »

The government is doing this only to keep people in their jobs...
I don't think you see the whole picture. How much do you think it would cost this government to keep all these people who loose their job on benefits?
And who do you think will pay for that? Current and future tax payers.
At the moment the situation is that they have to choose the better hell.

And I don't think they are going to give the money just to any people... On the end of the day that is why we are where we are - because that is what banks did. And government failed to regulate them. They cannot afford to fail again.

And you don't seem to understand where the money will come from.

Who pays for Government spending? Civil Servants pay tax but that's just recycled tax. In the end you need a thriving private sector if you want the Government to have cash to spend.

So where will all this cash the Government is spending come from?

Any

Wookster wrote: »

They'll just bankrupt us in the process.

And if they do nothing? We won't bankrupt ourselves? I doubt it...
They certainly have more chances not to do that then if they let situation to run it's course...

Any

Generali wrote: »

And you don't seem to understand where the money will come from.

Who pays for Government spending? Civil Servants pay tax but that's just recycled tax. In the end you need a thriving private sector if you want the Government to have cash to spend.

So where will all this cash the Government is spending come from?

I don't get this post what so ever.
Where do you think the money WILL come from if we don't have a thriving private sector? Because that is what they are trying to save.