What if these measures don't work either!!

thegibdog

elaina79 wrote: »

What if these measure don't work, what is going to be the next step.

I don't know, the government admitting that they've no chance of winning the next election?

What's happening at the moment reminds me of one of those horror films where someone is cornered by zombies and resorts to throwing anything that comes to hand at them.

JP45

tesuhoha wrote: »

My brother in law happened to say at the weekend that taking into account the amount already given to the banks they could give everyone in this country £100k. Personally I think this is an excellent idea and would probably solve the recession:

How on earth did your brother in law arrive at a figure of £100k?

If you gave everyone in the UK £100k, it would amount to some £6 trillion.

So far the total amount given to UK banks is in the tens of billions.

Even if you were to add in the entire £600 billion sum for HBOS and RBS assets 'insured' under the asset protection scheme, you'd still get nowhere near £6 trillion.

ad9898_3

poppysarah wrote: »

The UK is a debt addict. You don't cure a debt addict by giving it more debt. You have to mke it go cold turkey. And that hurts.

So true, unfortunately the government don't see it, to me it's so basic, you don't do more of what is wrong in the first place. That goes for pretty much anything I can think of.

chriz1000

tesuhoha wrote: »

My brother in law happened to say at the weekend that taking into account the amount already given to the banks they could give everyone in this country £100k. Personally I think this is an excellent idea and would probably solve the recession:

All you first time buyers would have enough for a deposit
Present mortgage holders would not lose their houses/would pay off their mortgages.
Wealthy people would invest the money.
A lot of people would book holidays, buy a new car.

Therefore the building industry would start up again and all the unemployed builders and related trades would have a job again, the car manufacturers would be hard at work again, as would the whole manufacturing industry, the retail trade would be booming as people would be spending money. All the people who had regained their jobs would not be signing on so the country would have more money. More people would be paying income tax, car tax, house tax, solicitors would be busy again, estate agents. The banks would be doing ok because people would be taking out mortgages as they had the deposit, others would be able to pay off their debts, this would help the country's national debt, others would be saving. A lot of people would be more careful having learnt their lesson about money. There would be less need for council houses, homeless people would disappear. There would be a foolish hardcore who were still in debt, the gamblers etc but even they would benefit the economy by spending. Pensions would benefit, public spending would go back to normal, the Health Service and Education service would not be affected by the recession. The whole knock on situation would be reversed.

I really can't see anything wrong with it if every person got £100k. Oh and the Fred bloke who got the pension would only get his £100k like everyone else. The banks wouldnt get bailed out but maybe they wouldnt need it as everyone would feel secure and things would normalise. There would be a lot of saving and then the interest rates could go up a bit earning the banks some money. So instead of all that money going down the drain, spent by the banks and going goodness knows where, it would be used for the common good.

Lack of security is what makes people stop spending normally, and that is why none of the measures work because people don't want to feel secure about the bloody banks, they want to feel secure about themselves. Until that happens things won't improve. That is why my idea would work because it would solve most people's financial worries at a stroke. The Government had the money to do this but theyve wasted it on the banks pouring good money after bad.

It is a good idea, but it wouldn’t work for several reasons.
Firstly people would have £100k in there pockets, this would most probably push up the housing bubble to ridiculous unseen levels. A lot of people wouldn’t spend the money, they would just save it and pretty much retire. Also a lot less people would be offering services since they have all this money. High demand would again push the price of everything up.
Kids would be laughing that they haven’t worked a day in their life and they suddenly have so much money in their pocket. They would probably grow up to be lazy, have no real understanding of what money’s worth and get into stupid amounts of debt when they are older.

I think if they were to do something similar to what you suggest they best method would be for every country in the world to agree to print the same percentage of GDP, and give that amount of money/spending vouchers to every single person. If there under 21, the money sits in a government savings account until they turn 21.

This would combat any deflation in currency, the amount of money would be relevant to the cost of living for that country and it would hopefully stimulate everyone to spend all around the world.

djm1972

All mortgages written off (or rather "bought" by the Government) :beer:

It will only "cost" them £1 Trillion. That's nothing compared to the annual losses of AIG.

Everybody mortgage free means lots more money in the economy...:D

benood

treliac wrote: »

Nice idea, but in next to no time the bulk of it would back in the hands of the already wealthiest 10%. It's how humans function!

Err aren't the wealthiest 10% the wealthiest 10% by definition?

treliac

benood wrote: »

Err aren't the wealthiest 10% the wealthiest 10% by definition?

Yeah. So they'd be even wealthier (and the financially inept would mostly be no better off). Comprendez?

mewbie_2

Yeah. They'd be the wealthiest 20% or even 30%.

Radiantsoul

elaina79 wrote: »

So the interest rate is 0.5% and there will be £150bn created as part of the quantitive easing idea. This is to restart the economy and get the banks lending again.

Forgive me for being cynical, but none of the measures put in place have worked so far. What if these measure don't work, what is going to be the next step.

Options are probably:
1. Bankruptcies to wipe out the debts of banks.
2. Socialisation of debts(nationalisation of banks for a period) with the government bearing a portion of the debt.
3. Allow the situation to drift, so aren't allowed to fail but the government does little to activily intervene.

I think Option 1 would be a disaster and would lead to a major recession(but probably isn't going to happen), Option 3 is what governments have done in the past. Option 2 is untried, but probably will be considered if the banks don't get their act together by this time next year.

In