Government to offer loans to buy cars

Generali

Any wrote: »

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...

So the Government can borrow our way out of a problem caused by too much debt, is that the argument now?

Seems a little lame unless I misunderstood.

Rochdale_Pioneers

The other point is that the free-market fundies are acting as if there is a free market when there isn't.

Here's what will happen if what they advocate comes to pass. We in Britain stuffily refuse to keep the car industry working. Our car factories close. Other countries agree to keep the car industry working, their car factories stay open. Once the recession ends consumer credit will once again become available - not as free flowing and a bit more expensive like it always used to be, but clearly there. Britons once again start to buy cars in large numbers, every single one of which is now an import.

What would the cost be to Britain of permanently closing our car industry because we let the free market decide whilst the rest of the "free market" merrily subsidises? How many billions a year every year do we switch from exported to imported columns in the P&L? How much in tax do we lose as a result of Nissan et al clearing off?

There is much moaning by free market types about our lack of industry. They should know - they allowed it to die. We absolutely needed to clear out commie union leaders and theor backwards practices. Production capacity would have been reduced. But not to the scale we did in the 80s on steel, coal, shipbuilding etc - was there really the need to close these industries wholesale? Its not as if we no longer need these products, we now have to import them. We then did the same thing in the mid 90s by allowing the train factories to close when orders dried up upon privatisation - almost all options for new trains are now imports.

There is NO free market when it comes to industry. You either subsidise to keep production here and benefit from all those jobs, all that tax AND something you can export, or you let the market scrap it and import it with all the costs we're now suffering. Loons like Generali and their philosophies have got us here now they want to apply more of the same medicine until - no actually i don't know until.

When do you lot think that British industry is efficient enough for the market? When its completely closed?

Wookster

Any wrote: »

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...

The UK economy needs to restructure and rebalance itself. The UK is an inefficient, poorly skilled workforce (compared to star European economies like Germany, Holland etc).

All these measures are doing is storing up problems for the future by increasing debt for very little return.

By all means, let the government spend, but spend only on sensible things (nuclear power stations, investment in renewable energy, education) not throwing money into a bottomless pit, which is what Gordon Brown seems to excel at.

Generali

Any wrote: »

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.

This is a circular argument really. AIUI, you're saying the Government needs to spend to save the private sector and I'm saying that the money the Government is spending just comes from the private sector and so is a reallocation of resources.

Let me try a different tack. How do you think that the Government borrowing money to spend now is going to save the economy, please?

I'd rather discuss it than fight about it. Fighting's cool too if that's what you prefer though.

Any

Generali wrote: »

So the Government can borrow our way out of a problem caused by too much debt, is that the argument now?

Seems a little lame unless I misunderstood.

My mother always said that best cure for hangover is to have what caused it in the first place...:p No, now this was a joke.

As an accountant I know that secure borrowing might in future generate much more income then if you wait and save up. However, you cannot jump into borrowing without thinking which is what most people did and that is why we are where we are. The banks should have stopped them - but they became greedy and government was too late to stop them.

However, what now??
What do you say they should do now?? Everyone has a lots of talk about what they shouldn't do, but I haven't heard single proper idea about what they should do...

Any

Generali wrote: »

Let me try a different tack. How do you think that the Government borrowing money to spend now is going to save the economy, please?

I'd rather discuss it than fight about it. Fighting's cool too if that's what you prefer though.

Because if people will spend money, other people (who make the product) will keep their jobs and everyone including banks will stop worrying that the person you lend (companies etc) will go out of business or job...
Because that is what I see as the cause of this panic.
Few banks went into trouble - and so what???? As it has been said before - the strong companies remain. The idiots went into trouble because they were greedy and lent to people they shouldn't have done. And going down is their punishment.
But what happened was that couple of thousand people were out of job and media made a huge story out of this, saying that within a few months we will be out of job and so people started to sit on their cash.

Those few thousand people would have found jobs, maybe retrain, maybe go and work for another bank. But unfortunately chain reaction followed.

Generali

Any wrote: »

My mother always said that best cure for hangover is to have what caused it in the first place...:p No, now this was a joke.

As an accountant I know that secure borrowing might in future generate much more income then if you wait and save up. However, you cannot jump into borrowing without thinking which is what most people did and that is why we are where we are. The banks should have stopped them - but they became greedy and government was too late to stop them.

However, what now??
What do you say they should do now?? Everyone has a lots of talk about what they shouldn't do, but I haven't heard single proper idea about what they should do...

Ok, where to from here.

Banks are insolvent. Let them go bust. Screw them and their investors. Same goes for savers above the guarantee limit. Try to claw back bonuses/capital made from options by directors. Perhaps even dividends too.

Before you let them go bust prepare the BoE to run a simple credit system until new banks are able to be set up. When new banks can be set up, limit their size either by allowing a maximum total liability or by giving them a limited geographical reach.

Don't use taxpayers' cash to fund business, let taxpayers decide who to spend their own money as much as possible.

What's your solution? Propping up the banks doesn't seem to be working. Propping up industry was a massive failure in the UK in the 1970s. I'd be interested to hear a genuinely innovative, workable solution from the left that hasn't failed many times before. Seriously - it'd be great to find a model that truly works. For me, Capitalism is the least bad (by a long way).

Any

Wookster wrote: »

By all means, let the government spend, but spend only on sensible things (nuclear power stations, investment in renewable energy, education) not throwing money into a bottomless pit, which is what Gordon Brown seems to excel at.

Amen. This should have always been the case.
However this is not now going to help to keep people in their jobs.

Any

Generali wrote: »

Ok, where to from here.

Banks are insolvent. Let them go bust. Screw them and their investors. Same goes for savers above the guarantee limit. Try to claw back bonuses/capital made from options by directors. Perhaps even dividends too.

Before you let them go bust prepare the BoE to run a simple credit system until new banks are able to be set up. When new banks can be set up, limit their size either by allowing a maximum total liability or by giving them a limited geographical reach.

On this we agree. Let them go bust.
The problem is that people will not be happy if their savings are gone and that is why government will not do it.

Sir_Humphrey

Rochdale_Pioneers wrote: »

The other point is that the free-market fundies are acting as if there is a free market when there isn't.

Here's what will happen if what they advocate comes to pass. We in Britain stuffily refuse to keep the car industry working. Our car factories close. Other countries agree to keep the car industry working, their car factories stay open. Once the recession ends consumer credit will once again become available - not as free flowing and a bit more expensive like it always used to be, but clearly there. Britons once again start to buy cars in large numbers, every single one of which is now an import.

What would the cost be to Britain of permanently closing our car industry because we let the free market decide whilst the rest of the "free market" merrily subsidises? How many billions a year every year do we switch from exported to imported columns in the P&L? How much in tax do we lose as a result of Nissan et al clearing off?

There is much moaning by free market types about our lack of industry. They should know - they allowed it to die. We absolutely needed to clear out commie union leaders and theor backwards practices. Production capacity would have been reduced. But not to the scale we did in the 80s on steel, coal, shipbuilding etc - was there really the need to close these industries wholesale? Its not as if we no longer need these products, we now have to import them. We then did the same thing in the mid 90s by allowing the train factories to close when orders dried up upon privatisation - almost all options for new trains are now imports.

There is NO free market when it comes to industry. You either subsidise to keep production here and benefit from all those jobs, all that tax AND something you can export, or you let the market scrap it and import it with all the costs we're now suffering. Loons like Generali and their philosophies have got us here now they want to apply more of the same medicine until - no actually i don't know until.

When do you lot think that British industry is efficient enough for the market? When its completely closed?

+1 I can't find a word I disagree with here.