Government to offer loans to buy cars

Wookster

Sir_Humphrey wrote: »

The money will be repaid in future, partly through higher taxes

Just like those NINJA (no income, no job) loans in the states to sub prime borrowers?

What a bright future we all have.

Sir_Humphrey

WestonDave wrote: »

I suspect this will turn into a re-run of the mortgage assistance which ended up helping about 9000 households.

Surely part of the problem is that the credit worthy don't want to borrow to spend on things they don't need, and the people that will spend just for the hell of it are maxed out on debt so shouldn't be borrowing any more!

As my car is now approaching 9 years old I went looking at what there currently is on the market. If I wanted to I could get finance to buy a car on credit - varying interest rates, terms and deposits. Even as recently as November my bank gave me a £8k limit 0% credit card so its not that you can't borrow if you want to - the real problem is that those with capacity to do so, have more sense than to land themselves in debt when they are looking over their shoulders at their job situations.

So from that I can only conclude that this scheme will either help very few people (who are borderline credit worthy) or it will end up pouring money into the pockets of those who have already spent too much. I don't fundamentally disagree with supporting efficient industry to keep a UK operation going but I just don't see how its actually going to work (even more so as has already been said 70% of production is going for export so even if our buying normalises the likely overall effect will still be down significantly).

This is why the politicos are talking about international action on fiscal stimuli, so this problem can be avoided. Luckily, Obama seems on board, as are France (and belatedly) Germany. It is true that the measures probably go nowhere near far enough.

Sir_Humphrey

Wookster wrote: »

Just like those NINJA (no income, no job) loans in the states to sub prime borrowers?

What a bright future we all have.

Except the people getting loans would have incomes (and be more likely to keep them thanks to the stimulus - see previous posts) and it would help productive industry rather than unproductive housing. Not all credit is bad! Generating return from borrowed money is how Capitalism works.

StevieJ

Generali wrote: »

They will but at least that way they can choose how to spend their wages. That is A Good Thing from my perspective. Many posters disagree, several in quite strong terms.

If taxes are cut for lower earners they are more likely to spend the money than richer people.

I agree with that :T

Wookster

StevieJ wrote: »

I agree with that :T

And rather than these daft car loans/ and the great bank bailout part II: cut taxes for people earning under £25k and increase taxes for people earning over £100k.

Sir_Humphrey

StevieJ wrote: »

I agree with that :T

Except they would bear the brunt of any public service cuts made as a result. As a result the money would be taken away again. Example: If the NHS stopped free eye tests for the poor to fund tax cuts, then the poor may pay less tax. But then they would have to either pay for the eye test or risk undetected eye disease. So they would be worse off, as part of the cost of the eye test would have been born by richer taxpayers. So a tax cut for the poor would end up benefitting the better off. Of course, this would not apply if higher earner tax rates were increased to match to pay for the eye tests.

Sir_Humphrey

Wookster wrote: »

And rather than these daft car loans/ and the great bank bailout part II: cut taxes for people earning under £25k and increase taxes for people earning over £100k.

I think you would need to do some maths to work out just how much the top rate would need increasing to gain a worthwhile cut in the lower rate. Not that I disagree with the principle of what you say here (although maybe not for quite the same reasons). However, for stimulating the economy, you get more bang for the buck through govt deficit spending rather than deficit tax cuts. If you make up the money from elsewhere, the measure is fiscally neutral and not actually much of a stimulus (ceteris paribus)

Any

You actually think that the ones earning over £100k don't have all their money protected from tax?
It would be great thought... I think every country is trying to achieve that balance..

Generali

Well you've guys have got all this good stuff going on and still the current UK Government is a centralist bunch, not leftist and definitely not socialist.

More spending of 'Government' money will fix things, many of you seem to be sure of that. Who cares who pays because the Government will fix that too.

Wookster

Sir_Humphrey wrote: »

Not that I disagree with the principle of what you say here (although maybe not for quite the same reasons).

Don't make judgements about me or my motivations. You don't know me at all.

Sir_Humphrey wrote: »

However, for stimulating the economy, you get more bang for the buck through govt deficit spending rather than deficit tax cuts.

Like:
The NHS computer system that will never work
ID cards that are going to cost at least double initial estimates
The Olympics which are going to be massively over budget
The Dome
The Millenium bridge that wobbled

Oh yes - the taxpayers are getting loads of bang for their buck.