Brown reaches the stratosphere

[rov1200]

Will Brown ever come down to Earth to sort out the problems suffered by failing businesses and the 3million losing their jobs? All the talk seems to be about part nationalising the banks, telling the yanks how to behave and messing about with hundreds of �billions of taxpayers money. But what about the people here on Earth where no help seems to be available.

http://news.bbc.co.uk/1/hi/business/7929957.st m

[VHG]

Some politicians seem to want to make their mark on the "world stage" but do little for the people in their own country.

Both Blair and Brown spend a lot of their time helping other countries while this country has a HUGE number of problems that they seem to ignore.

These include street crime, slum estates, rampant illegal immigration, binge drinking, drug dealing, crumbling infrastructure, massive benefit fraud, corrupt banks, lack of police on the streets, full prisons and more.

Added to this we now have rising unemployment, companies going bankrupt, house reposessions, rising debt, high street stores going out of business, and much more.

It seem to me many politicians are more interested in making sure they can "fiddle" their huge expenses than actually DOING anything to help sort out the problems we have in the UK.

[sqad617]

I take both your points, but when "our leaders" are abroad, there are enough ministries and ministers to deal with the day to day running of the country, without too much damage.

[Kromovaracun]

All the talk seems to be about part nationalising the banks


Put very, very simply, that's because the crisis has left a huge question as to what to do about toxic assets. Banks aren't selling them (because they can't), so they effectively lose money. Plus toxic assets can generate more toxic assets, and (as they are now) can affect businesses not involved in the original crunch/subprime lending.

Various states and economists have proposed different solutions, but it's a pretty tough question because there's not really a successful precedent to follow.

elling the yanks how to behave

The crisis needs international co-ordination. If any sustainable gains are to be made, there needs to be co-ordination between the rich economies.

What would you do?

[rov1200]

What would I do?

No one denies there are $billions of toxic debts out there and that was before the recession started. Now we are entering a full blown recession it does not take much working out that these toxic assets will increase at the same rate as people are losing their jobs. Therefore trying to stem this flood seems almost impossible with the currrent tactics. An analogy could be made with the failed levies in New Orleans which breached. The water cascading into the city was unstoppable and could not be patched up during the crisis.

So here we have governments trying to solve past bad debts but hardly anything is being done to keep people in their jobs so the situation is stabilised. The toxic debts will increase, people lose their jobs, toxic debts increase further; a vicious circle.

A solution therefore is to put money into the consumers pockets so that they buy and keep people in their jobs. This is being done in Germany where the consumer is given �2500 to trade in their old car. In the space of a few weeks the takeup has resulted in over �1 billion in extra sales. The UK seem unwilling to go this route. It is self financing after taxes have been paid.

[rov1200]

No one will assume that if you cure the car industries problems the country would be put to rights. Its only one sector of the economy. Each sector would need its own recovery program.

[jake-the-peg]

To a certain extent that was already done a drop in VAT by 2.5% put �12.5 billion directly into consumers pockets.

Everybody complained it was ineffective and I think they were right.

Firstly putting money into consumers pockets is very inefficient in helping British companys as a fair amount of it will go on foreign imports.

And secondly whilst people are uncertain about their jobs there is a tendency to hold onto money and not spend it freezing the economy up further.

Even Ozzy seems to have worked it out now and is saying that what is needed is for credit to be available again and that is what people will judge Brown on. And that is why the Llyods move has a legally binding commitment for them to lend �25 billion.

For the Tories it's a major problem because Brown is in control and doing pretty much the right thing so they're left rather trying to pick holes without an alternative plan.

They're also historically the party of laissez-faire capitalism. They used to be always going on about stripping red tape from businesses - don't hear that much at the moment do you?

To hear Cameron going on about banks needing better regulation and government control and greedy ******* does rather leave you checking which party he's actually leading!

[rov1200]

There is more to it than making a new car. The majority of workers may be involved in sales, servicing, spare parts,financing, plus those involved in scrapping the old vehicle and recycling the materials.
In fact the idea must be workable as the Society of Motor Manufacturers have been lobbying the government to implement such a scheme and they should know.

I agree about the failure of the lower VAT rate. Many small businesses are non VAT rated so the services they supply cannot have VAT added.

As for holding onto their savings when the interest payable is now laughable people are looking elsewhere to put them. A �2000 saving on a car must be the equivalent in some instances of a 20% saving. How many years would you need to invest to get that?

[rov1200]

This is a reference recommending the scrappage scheme and to my link in the previous posting http://www.channel4.com/4car/news/news-story.j sp?news_id=18773