are we (the british Taxpayer!) going to benefit at all from the government bailouts?

adrian_bond

hi everyone,

this may be a stupid question, and sorry if its been answered in another thread. i was just reading the news of the extent of borrowing by the banks from the treasury of approx £185 billion!

eventually, once everyone has calmed down and everyhting is kind of back to normal (2009?, 2010?, 2011?, 2020?), will the british taxpayer benefit financially or otherwise form these bailouts? its our cash being used to plug the hole under the irresponsible lenders and borrowers feet who got us in this mess in the first place, and want to know just how this massive cash lump is going to affect us! ive heard from somewhere that its costing each of us £33,000 in taxes. ouch!

please post replies and correct my mistakes and stuff.

happy posting!

Rochdale_Pioneers

Will we benefit? Depends on your point of view - the consensus is that we benefit from not letting our banking system collapse under its own debts - which is the alternative to what has happened. Not even Cameron has disagreed with the bailouts (just the stimulus package on VAT etc).

Then you have the question of how much money can be made from selling the assets now owned by the government once the market picks up. RBS and Lloyds shares are worth very little at the moment, but once things pick up and they are back on an even keel they will be worth money. All the cash being spent isn't being lost down the back of the sofa - a large proportion of it is buying assets.

PasturesNew

There are two sides to the bailouts:
- stopping savers from losing their money/confidence, and the subsequent domino effect across the economy as wages aren't paid, bills aren't paid etc.
- losing out when bad payers are repossessed by those banke and how we would get that money back

Dylanwing

Not a chance

sabretoothtigger

The net effect of current troubles is a weaker pound and everyone holding sterling assets is poorer.
If banks dont collapse they will be paying profits to the government for many years to come, nationalisation would be worse

Dylanwing

Basically, we have slung heaps of cash at the Banks, and got s*d all in return. The choice should have been reform or be nationalised, but Gordy and Al are still sucking up to Bankers, despite the huge mess that they have caused. They will probably employ Goodwin in some overpaid advisory capacity soon!

MarkyMarkD

The £185bn is a loan. It bears interest at a (relatively) high rate - in excess of LIBOR, which is in excess of Bank base rate. It will ultimately likely be repaid, because banks will be able to borrow the money elsewhere cheaper, so they have an incentive to pay it back relatively quickly.

(But the fact it's expensive means that it's not as effective as it should be in terms of encouraging banks to lend - but that's a different story).

Claims that it's a £33k tax on each individual are rubbish. It's a LOAN, not a GIFT.

chucky

MarkyMarkD wrote: »

The £185bn is a loan. It bears interest at a (relatively) high rate - in excess of LIBOR, which is in excess of Bank base rate. It will ultimately likely be repaid, because banks will be able to borrow the money elsewhere cheaper, so they have an incentive to pay it back relatively quickly.

(But the fact it's expensive means that it's not as effective as it should be in terms of encouraging banks to lend - but that's a different story).

Claims that it's a £33k tax on each individual are rubbish. It's a LOAN, not a GIFT.

i'm not totally sure if it is just an interest bearing loan, it's got some big fees linked to the lending of those funds. i'll be happy to be corrected if this is not the case, i think i have read this but not 100% sure.

adr0ck

robert pestons blog on this can be found here

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/02/weve_lent_185bn_to_banks.html

seems the banks paid a 1.15% fee for the loans

caroline1973lefty

This seems a pretty low rate of interest considering that a) there's no guarantee we'll ever see this money again and b) they charge something like 25% interest on overdrafts they lend us?

to answer the OP's question perhaps it would be a more effective boost to the economy if the government forced all the banks it now (more or less) owns, to stop the delaying tactics and refund everyone's bank charges?

scousethife

We are in this shlt cos of over borrowing (go check the debt free wanna be forum)

for the crass morons of our society

So to cure this problem And martin lewis has been very vocal about carole verderman being the public face of consolidation loans

Gordon brown has decided to cure the problem of borrowing by......borrowing more

Its like trying to cure an alchoholic by giving them a pub.

Maggie thatcher gave the tories abd name but by christ has gordon brown given the labour party a bad name.

the only thing we as the population will learn is that no politician cares and is competant.

they tried (ish) they failed us, each and every one of them