Bank Bail out - how does taking my money make me spend?
Discussion
So the government is going to take 2k of my money, and all of yours, to support the banks, even though I don't owe anything to the banks, but lots of people probably owe them far more than 2k. (Why not just call those loans in instead or sell of any secured assets if people can't pay them back?)
So I am 2k poorer (or as a 40% taxpayer, presumably I will pay about 3,500, whereas the people with big loans probably won't be paying anything. So I will be subsidising their living outside of their means, which isn't really what I go to work for to be honest.
And this scheme is supposed to result in me and you starting to spend our money down the high street again?
Errrm, they've just taken all of my disposable income in tax, so what the hell am I supposed to spend?
Oh right, interest is low, so perhaps I borrow money, but then I owe money and interest, so then I am poorer, so then I have even less money to spend. And why give £2k to the banks, just so they can lend it all out again cheaply?
Am I missing something fundamental here or do these people think that they are so clever that they are actually incredibly stupid?
So I am 2k poorer (or as a 40% taxpayer, presumably I will pay about 3,500, whereas the people with big loans probably won't be paying anything. So I will be subsidising their living outside of their means, which isn't really what I go to work for to be honest.
And this scheme is supposed to result in me and you starting to spend our money down the high street again?
Errrm, they've just taken all of my disposable income in tax, so what the hell am I supposed to spend?
Oh right, interest is low, so perhaps I borrow money, but then I owe money and interest, so then I am poorer, so then I have even less money to spend. And why give £2k to the banks, just so they can lend it all out again cheaply?
Am I missing something fundamental here or do these people think that they are so clever that they are actually incredibly stupid?
Metroarea said:
in that they joke about someone asking why the money is not just given straight to us to pay local businesses.i know its a joke, but surely if they cut duty on fuel etc, we will buy more stuff and get the whole economy moving or am i making this far too simple.
Edited by jesta1865 on Thursday 9th October 10:10
jesta1865 said:
Metroarea said:
in that they joke about someone asking why the money is not just given straight to us to pay local businesses.i know its a joke, but surely if they cut duty on fuel etc, we will buy more stuff and get the whole economy moving or am i making this far too simple.
As with all of these bail outs - they aren't taking your money and burning it. They are buying stuff.
No one is sure what that stuff is worth so they may well be effectively burning the money but the last time this happened in the US - during the Savings & Loans crisis in the 80s the government investments ended up making a handsome profit.
So, rather than burning it they have really just bet it all on black. Unfortunately the roulette wheel is going to take several years before it comes to rest and we know whether the bet paid off.
No one is sure what that stuff is worth so they may well be effectively burning the money but the last time this happened in the US - during the Savings & Loans crisis in the 80s the government investments ended up making a handsome profit.
So, rather than burning it they have really just bet it all on black. Unfortunately the roulette wheel is going to take several years before it comes to rest and we know whether the bet paid off.
Kozy said:
So how are they taking this money off of us? Do we all write a cheque to Darling? Income tax going up? How am I phyically going to loose this few thousand pounds, however much it eventually adds up to?
Look, every penny in income tax you pay get pissed up against the wall in benefits anyway. At least this money is being spent on something more useful than beer tokens for chavs. And hey we're all rich anyway after Labours economic house price miracle so what's a few thousand. Look at you house price man.
Timmy35 said:
Look at you house price man.
I don't own a house. 
On a serious note - why doesn't the Government just give income tax payers the 12k to spend as they see fit (ergo allow "market forces" to dictate the bail out) . The banks would then have to work for their money by tempting the rebate from the hands of the tax payers. Also it might kick start consumer sales and the rapidly shrinking car market.
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