Govern-mental?

[decky101]

Given the current economic climate, many countries have offered unlimited guarantees on people's money in banks, namely Germany, Greece and Ireland amongst others. My question to you all is this: Do you feel that the UK needs to follow suit? Would you be satisfied enough with the guarantees the UK government have offered, or are you, as suggested by German officials on 909 this morning, considering moving your money into German/Greek/Irish banks for the extra stability?

Discuss.

 

[elDiablo]

As all of my savings are below (WELL below...) the £35,000 (and soon to be(?) £50,000) limit that our government has said they will fully protect, I'm not too worried. The £50,000 limit (I was reading today) covers 98% of the population's savings . The only downside being that the other 2% hold some stupid percentage of the total money in savings

 

[Haven]

I find it kind of strange that the rich spend so much time and effort to avoid paying taxes. Yet once their money becomes threatened by financial stability the government uses taxes (in the form of Bank of England loans) to insure them. Ok, now I've got my lefty sentiments out of the way I'll continue

I can see why they are nationalising the banks, if everyone lost all of their savings then we would be in a state of anarchy and people would require a vast amount of financial assistance to survive so putting it up front before it reaches that stage makes sense.

Also in its favour, the bank of England (and hence the tax payer) potentially stand to make a decent amount of money from all these loans and "cheap" buyouts of banks, assuming they don't continue to fall in value. Potentially that would benefit the tax payer which would be nice.

Ultimately the current crisis is stealing from Peter to pay Paul. Cash flows are all so inter-related that the transfer of assets between state and the individual becomes irelevant in the long run and on a national scale. We will all either have our little pot of savings or we'll be subsidised by the governement who aquired all our savings for cheap by nationalising a bank, or some in-between status ...

Do I think they should bail out or buy out banks to insure money ?

Yes, but which one they do makes no real difference.

 

[Taffy]

I personally think it's ridiculous that in our Government's various 'action plans' and 'economic strategies', there is no mention of a cut in spending to allow for a tax cut. From my very basic grasp of economics, I'd suggest that tax cuts = more disposable income, which means people would be more willing to buy products and shares, resulting in a rise in profits and share value, ultimately ending in a re-stimulated economy. Of course, it's typical of this Government to not even consider such a thing. After all, a cut in spending would mean a cutback in services and a loss of votes. Also typical of Brown to promise to do 'everything he can' to protect savers without actually saying what he's going to do. That man blows more hot air and steam than a boiling kettle.

Also, I'd love to see how many more ways this Government can squeeze the middle class before they burst. After all, I'd be willing to bet that a fair proportion of them have saving above £50,000. A guess, but a reasonable one at that.

 

[Bradstreet]

So let's see ... you lower taxes, necessitating a massive cut in public spending. People yelp with pleasure at the few extra pounds of take home pay they see each month, then frown in incomprehension as they realise that they have to pay for essential services -- healthcare, education, waste disposal, street cleaning, infrastructure, emergency services -- and can't afford to do so even with their slightly shinier new pay packets. Especially all the former public servants who lost their jobs as a result of the spending cuts.

OR tax the rich, nationalise the banks, and penalise the bastards who thought people's pensions and savings were just a game in economic theory. They should be facing prison sentences not golden goodbyes.

/end left wing rant to knock Haven's for six...

 

[Taffy]

then frown in incomprehension as they realise that they have to pay for essential services -- healthcare, education, waste disposal, street cleaning, infrastructure, emergency services -- and can't afford to do so even with their slightly shinier new pay packets.

That isn't what I suggested at all. I'm not going to go into details regarding where spending could be lowered, as I don't have enough information available to me to make such a decision. What I will say, however, is that over the past 11 years of pain/Labour Government, we've seen massive increases in spending. I'm sure theres plenty of room for cutting now.

Especially all the former public servants who lost their jobs as a result of the spending cuts.

The Civil Service is too big in my opinion anyway. If it means having a better chance of avoiding a sodding great recession, I'm up for firing a few civil servants.

OR tax the rich

I'm up for that too. Thing is, that isn't how Brown works. He squeezes the pips out of the middle class to pay for everything, whilst giving out tax credits to the poor and peerages to the rich. What a fine institution the Labour Party has become.

We need tax cuts, spending cuts and a Government that has balls to make key decisions when they need to be made.

 

[Haven]

tax cuts = more disposable income, which means people would be more willing to buy products and shares, resulting in a rise in profits and share value

The issue is not of lack of spending, its bad loans. Banks not checking who they are loaning too and whether they are capable of repaying over a sane period is what has causing this crisis. The follow on is that once banks realise other banks have not been checking their loans properly then they no longer want to lend each other money due to a lack of trust.

In a nutshell thats the current issue, interest rates are irrelevant except as a means to control inflationary pressures of which the current issues are not.

Also, I'd love to see how many more ways this Government can squeeze the middle class before they burst. After all, I'd be willing to bet that a fair proportion of them have saving above £50,000. A guess, but a reasonable one at that.

Anyone nearing retirement (middle class or not) will probably have that much invested in the system so it affects not only the middle class. Admittedly the current issue is mostly about savings and not pensions but most of these systems are interconnected to the extent that everyone is affected. Investments are designed to go both ways and its a risk you take by "loaning" your money to a bank to do with as they will.

Regarding "squeezing the middle class" (makes me think of tango man running around hugging everyone until they pop) thats a separate thread and you'd have to outline where you are going with that before I can respond.

 

[Bradstreet]

My serious point is that there's no way tax cuts could produce *enough* disposable income to allow us to start spending our way out of recession. The current crisis is an inevitable product of a capitalist economic system which shuns government intervention and fiscal accountability, and promotes consumer spending to create untenable levels of credit. The answer is government intervention (I would go as far as nationalisation), direct accountability, and a drawing away from unsustainable levels of credit (like a mutual loan company, you lend what you have). The 'stimulus cheques' sent out in the States did nothing, as far as I'm aware, to help the economy, and certainly didn't head off the current situation, which -- as Haven says -- was not a result of a lack of consumer confidence, but a trigger for it.

I do agree that Labour tax policy has moved uncomfortably towards a Conservative position: historically the Tories have been very successful in presenting themselves as the party of lower taxes while demanding less from the rich and more from the middle classes than Labour. However, two elections ago, the difference between the tax income projected by the two parties was less than 1%. That's not the kind of money that's going to make a difference or that can cover spending cuts.

Slashing public spending might feel temporarily as though we were being appropriately hair-shirty about the whole thing, but it would be much more likely to lead to a further decline in economic stability, partly because the correlations presented between spending cuts and tax relief usually don't add up, partly because some service providers would have to start finding the money in other ways, and partly because some people would lose their jobs. It's all very well for you to say that we have too many civil servants anyway, but a) I don't think that means we should feel any less concerned for the people employed by the civil service, and b) the people who lose their jobs would, in the majority of cases, not be civil servants, they would be refuse collectors, the people who clean the town hall, lollipop ladies etc, etc: people already undervalued for doing essential jobs.

 

[[THN]Buffalo_Hunter]

Nice story on the BBC this morning - the display in New York that shows the US debt has run out of numbers - it's now passed 10 trillion dollars.

http://news.bbc.co.uk/1/hi/business/7660409.stm

Talk about poor regulation of spending. The guys responsible should be taken out and shot (using only a single bullet, mind. No point wasting any more on them).

 

[Xarlaxas]

Well, my understanding of the situation and from previous economic problems is that tax cuts and less spending from the government is bad because it results in less spending from companies, people, etc, and things get even worse, so what the government is doing does seem like better than other things.

Speaking of Civil servants, in Scotland the vast majority of Civil servants are in their 60s and will be retiring in a couple of years, so we're going to need to train and hire an entire new crop of them soon, heh.