Solution to the Credit Crunch

Discussion in 'AGC, RAPTC and SASC' started by dumbstruck, Mar 6, 2009.

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  1. I think that the Government should pay everyones mortgage for 2 years, thus releasing extra capital for people to spend on new cars and other things that will then reboost the economy. It sounds stupid I know but it's got to be better than whats happening now and will be less expensive for the country.
  2. As a home owner I love your suggestion, but what about the millions who dont pay a mortgage and pay rent - bit unfair that half of society get to live "free". Also, what about those whos mortgage is over £250000 when mine is considerably less, why should they get more?
  3. With two years garranteed payments, the banks would give my hamster a mortgage, so we would be in the same position two years down the line.
  4. What about doing the same as the German car Industry is currently doing.

    If you buy a new car and take your old one in for disposal you get £2k back from the Reich.

    Encourages the use of newer, hence greener cars. Gets rid of a load of wrecks, bouys up the car industry, puts smiles on peoples faces.

    Comparatively low cost, keeps scrappies in business, clears gypsies car lots.

    Winners all round.
  5. OK, how about not paying the interest on your mortgage for 1 or 2 years not as good as I originally proposed but still better than whats on offer at the moment. The Government should also be more stricter with the banks with regards to giving out mortgages now that they more or less control them. With regards to people who rent they should be able to claim a percentage of their rent back from the Government. Obviously I am not on the same pay bracket as the people who are supposed to be in charge but they have not made in my opinion a very good job.
  6. That's OK for the car business but what about everybody else, why not take your old clothes to Marks & Spencers, or half eaten burger back to Macdonalds for a refund.
  7. How about giving each adult of working age £5000 to do with as they wish? Only those that hold a valid national insurance number would be entitled to the cash. This would inject cash into the economy from the bottom upwards and kick start the economy from the consumer end.

    Those that are in financial difficulty would be given a much needed lifeline to keep the bailiffs from the door. Those that are not feeling the pinch so much could either choose to spend the money, thus creating demand for goods which would have a knock on effect in supporting the manufacturing industries, theirs suppliers, hauliers etc.... Jobs would be saved/created and tax would continue to be paid to the government.

    No need then to throw money into the economy for banks to sit on or p1ss down the drain and those that are in the most need would get help very quickly.
  8. Grownup_Rafbrat

    Grownup_Rafbrat LE Book Reviewer Good Egg (charities)

    I'd support that, but it would have to be taxpayers only. Those not paying tax but claiming benefit are getting enough free money anyway based on their NI number.

    And I'd increase it to fifty grand each. Still cheaper than bailing out banks, paying off PFI, and paying all the other debt we and our descendants have been saddled with in the last thirty years.
  9. your suggestion, though undoubtedly well meaning, is nether fair nor practical and is unlikely to help the crisis. Then again, it's no more stupid than some of the goverments actions to date so who am I to judge.

    The core problem, not the cause, is that there is little credit flowing through the system. Think of a heart beating and pumping furiously but the arteries are clogged and no blood is flowing round the body.

    A practical example is comparing the base rate of 0.5% with mortgage rates at around 5% or overdraft rates over 10%. Another is that following the last rate cut 70% of banks reduced rates for savers but only 30% reduced mortgae rates. What this means is that the banks are sucking in cheap money but not passing the benefits on in a cynical move to restore their balance sheets. The situation is similar or worse for companies and that is a massive concern.

    The goverment can make some simple, easy to understand and implement moves to help both taxpayers and the economy.

    For example, issue 30 year goverment debt paying a 3% coupon and use the funds to issue 30 year mortgages at 3.25% using goverment owned institutions like Northern Rubble as the conduit.

    They must bite the bullet with RBS and Lloyds and nationalise; they are mortally wounded institutions that are bleeding slowly to death and dragging others down with them. The only reason that I can think of not to do it is that killing equity holders and impairing bondholders might destroy some of the life companies like L&G who are big holders of bank debt, but I'm not certain of that.

    They must start to put the knife into goverment spending and start quickly. They're writing cheques that we simply can't afford. Just like a crack addict they are compelled to spend money that isn't theirs to get a short term high when faced with a problem. I'm not making this up, the average public sector salary is now higher than the private sector. Did you know that 40% of all private jet usage in the UK is by the goverment? That eight out of 10 local councils say they have no plans to cut back on planned recruitment. I could go on but you get the point.

    Quite frankly, it's all a bloody mess. The frustrating thing is that much of it was avoidable, even up to the second half of last year, and transparent to many both on the sidelines and in the middle of it all for the last two to three years but who listens when the money is rolling.
  10. Easiest way is a bloody cull of non-jobs and a serious looking at of benefits.

    And a monetary "gift" to tax-payers (a rebate would work) in order to give them more money. WHich they then spend or invest.

    Seizure/voluntary donation of banking execs pension to help cover for their own balls ups.
  11. Euthanasia - get rid of those bloodsucking pensioners. Spending all my hard earned tax cash on coffee mornings and bingo - what did they (or the Romans) ever do for us...?

    The saving on pensions would be huge, and there would be enough houses left over for people to actually be able to afford one.

    Any of the coffin-dodgers that don't fancy falling on their swords for the benefit of the rest of us can go into voluntary pension-free exile in the Falkland Islands, and dig peat for their remaining days.

    This policy could remain in force until, let's say, I approach retirement age.....
  12. Chav Euthansia?
  13. Undermanning is bad enough as it is. Chav Euthanasia, whilst a very appealing concept, would create a manning void I fear. Certainly my current unit would lose around 50% of the 17-22 year old age bracket in the chav-free utopia of which you speak! :D