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The main coronavirus thread has become amateur epidemiology and data privacy argument. Here's a new one for the non-medical impacts.
x-posted from the other thread. What are the chances of having our credit cards wiped out?
So those of us who are careful with money and run no debt loose out? Great.
National debt maybe, personal debt, no way is that fair.
Woohoo. Smash that credit card quick.
Zero but you could get a cheap loan to pay it off sooner as the rate is so low. Like Mat says it’s personal debt so suck it up.
National debt maybe, personal debt, no way is that fair.
So we allow the economy to collapse to preseve fairness? it's actually a tried and tested policy to punish savers and reward spenders in times of economic distress.
Like Mat says it’s personal debt so suck it up.
Obviously it wouldn't be as direct as simply writing off credit cards, but the point of that article is that debt deflation caused the great depression. If we're to avoid another one in the wake of covid-19 it's going to require private debts to be written off in some form. As it says in the article, the more people pay off their debt, the more they end up owing due to the deflationary downward spiral.
What are the chances of having our credit cards wiped out?
Almost none I'd guess.
As the first response shows people who don't use them would be unfairly penalised, the UK has a history of unfairly penalising certain groups, but we generally put 'Homeowners' on a pedestal and berate people who use Credit Cards, I don't see it being politically compatible.
They've extended the ho penalty 3 month holiday to pretty much every form of debt possible now. I guess that'll be the solution.
but we generally put ‘Homeowners’ on a pedestal and berate people who use Credit Cards
I think homeowners are the last group of people who should be complaining about fairness, given that the vast majority of them have benefitted from a substantial free windfall. Even then though, most 'homeowners' are nothing of the sort, they're debtors, and in a deflationary economy they will suffer the most from their debt increasing in value and asset-price deflation.
Ouch...
"The explosion of the coronavirus economic collapse into that already weak monetary environment almost certainly means that deflation is already under way, even if the overall consumer price index has not yet turned negative. Commodity prices are falling. At the time of this writing, it is still physically possible to fly from Washington, D.C., to San Francisco, and you can get a round-trip ticket for a little over $200.
The fall in oil prices has been even more spectacular: On April 20, oil futures for May deliveries crashed to negative $37.63 per barrel. Most importantly, at least 26 million people have lost their jobs, while millions more have had their pay or hours cut. Economists say that wages are “sticky,” meaning they are usually set in contracts for long periods, so the way deflation happens to workers mostly isn’t through a falling price of labor but through a falling quantity of jobs. And the quantity of jobs has never fallen as far, as fast, as it has since mid-March."
But on the flip side, goodbye credit card debts and hello UBI 🙂
"Demand stimulus through normal fiscal and monetary policy tools—even on an unprecedented scale—are incommensurate to this crisis. People need direct, universal, unconditional income support. Far from generating a sudden hyperinflation, it may be the only way to avoid a deflationary spiral that rivals the Great Depression."
no way is that fair.
The pandemic isn't exactly fair. It is hitting poorer households harder. Probably a link between debt and poverty too. Not that it'll happen. We'll be paying for this for a while yet.
It seems insane that the bank of england are ruling out printing more money to underwrite the crisis tbh. You can kind of tell their thinking from the fact that it was "quantitative easing" when it was to give money to banks and now it's "printing money" when it's to benefit everyone.
It seems insane that the bank of england are ruling out printing more money
It does until you consider the politicians who are in charge of all this. They'd rather go down in flames than admit that money does in fact grow on trees (or on electronic spreadsheets, more accurately) and everything everyone in the western world has been told for the past 40 years is a lie. And if they let a depression happen I'm quite sure they will go down in flames.
Have to read up on debt cancellation a bit before diving in, thanks for the link.
Did make me think of a recent Anthony Scaramucci quote though.
'Sending out cheques to the public is capitalistic, bailing out corporations is socialistic.'
So if we're going to talk about cancelling private debt we should also talk about the cancelling of corporate debt, because that is happening right under our noses.
It is hitting poorer households harder.
Hold up, how is this virus / lockdown hitting poorer households harder?
Why not refund people the tax they have p[aid, or a proportion of it at least?
That will please the rich, or at least those not dodging tax, so has a chance of going forward.
Everyone will love the idea of punishing the tax dodgers so the Sun can print big headlines.
It will also reward the middle classes as they get some money too so they won't rebel too loudly.
It will do nothing for the poorest and most desperate so is entirely in line with Tory policy.
I can't help but think that the Corona virus discussion has become a battle of information between those who want to keep us in fear of the virus, and those who want to keep us in fear of the economic cost.
BA and Virgin have both announced massive job cuts. Virgin is going to get rid of 10 of their 45 aircraft (are they a relatively small, but noisy airline? that doesn't sound a lot to me?) and pull out of Gatwick. I can't help but think that's a bluff to the Government, bail us out or we'll lump 15k more unemployed in your lap.
The usual suspects like the Economist are doing their doom-monger bit - 35% drop in GDP!! Add that to 5m people either being Furloughed or unemployed (20% of our workforce) that's great recession figures. Of course it's an artificial drop in GDP, we closed the shops, the offices, the factories and building sites for a good reason, they didn't go out of business. Not everyone will simply go back to work when this is over like nothing happened, but a lot will. That's why the furlough scheme was such a good idea.
So far it's cost the UK £20bn, if it runs until the end of the year it'll cost £80bn. That's a lot of money, but it's nothing like the cost of the Credit Crunch bailout.
Timing will be everything, right now the greatest fear is the Virus, some people will hate any idea of loosing regulations, they're the same kind of people who decided the Governments rules weren't strict enough, decided on their own interpretation of them, or at least read others on Social Media and then judged others for breaking these new rules.
I wouldn't want to be in the Governments position, what a hellish job - every day you lift lock down early will kill more people, every day you keep them longer than you need to you'll push more people it poverty and ultimately kill them another way.
Hold up, how is this virus / lockdown hitting poorer households harder?
They also have less savings, so suffer far worse from any economic shock and tend to be in insecure employment etc.
every day you keep them longer than you need to you’ll push more people it poverty and ultimately kill them another way.
Not if they go for a huge Marshall plan style investment program afterwards and stimulate enough demand to re-start the economy.
However, if they switch back to Austerity and winding down the NHS then yes, loads will die.
Well, looks like Furlough will begin it’s wind down July onwards
There’s a good chance that’ll sink my workplace depending on the details.
Sturgeon has said UBI is the Scotch Government's top priority post lockdown
There’s a good chance that’ll sink my workplace depending on the details.
Yup, I think we can expect a tsunami of redundancies in the summer. It also feeds the deflationary vortex, as those who don't get made redundant will be on lower salaries, probably permanently. The tories have completely lost their bottle. It seems 'whatever it takes' is just a meaningless slogan.
Interesting read here. Seems we're on the tipping point between a new Bretton Woods post-war type global recovery effort, or a descent into beggar thy neighbour isolationism where the rich cream off even more than they already have. Joy!
Well, looks like Furlough will begin it’s wind down July onwards
There’s a good chance that’ll sink my workplace depending on the details.
Sorry to hear that, what industry are you in?
I guess that was always on the cards, the problem as ever is that there has to be 1 rule for everyone. I know a lot of places who've furloughed staff just because it was the most business-like thing to do, a few of our suppliers who've been crazy busy furloughed half their staff and just told us to expect problems because of Covid, I thought it was a pretty shitty thing to do, anyway most of them seem to be returning to work today, tomorrow and Monday.
If they do go ahead with the plans to end Furlough, the leisure and tourist industry will be in real trouble. The Gov might end up paying out more in Redundancy payments for employees of collapsed businesses than they will in furlough payments.
If we’re to avoid another one in the wake of covid-19 it’s going to require private debts to be written off in some form. As it says in the article, the more people pay off their debt, the more they end up owing due to the deflationary downward spiral.
can someone smarter than me explain how all this works?
it’s actually a tried and tested policy to punish savers and reward spenders in times of economic distress.
this is about my limit of understanding.
I'd love to see a truly universal UBI work; I'm worried about the practicalities of it though.
can someone smarter than me explain how all this works?
Have a read of the article I posted in the OP. All to do with something called 'Fishers Paradox' apparently:
"Fisher argued that the Great Depression was caused by the twin coincidence of too high a level of private debt, and too low a level of inflation. In this situation, debtors resorted to distress selling, cutting their prices in order to attract a cash flow to themselves rather than their competitors. But because everyone was doing it, prices fell across the board, taking GDP down with it. Debts therefore fell less than GDP, and the private debt ratio actually rose. In his words:"
this is about my limit of understanding.
Inflation. In a normal economy inflation reduces the value of debt and savings. It's been pretty much standard post-war practice for governments to inflate themselves out of debt crises, the end result being those who hold cash (savers) end up poorer.
Sturgeon has said UBI is the Scotch Government’s top priority post lockdown
Sweet, as soon as they do that I can quit work, relocate to Scotland (somewhere pretty in the Hebrides) and live on UBI. Bliss.
Sweet, as soon as they do that I can quit work
Does the scottish govt have the power to unilaterally bring in a UBI? There's not a chance in hell they'll be allowed to have one without the rest of the UK for the very reason you state. If they do then you can be sure anyone not resident in Scotland for a certain period of time won't qualify, which brings up a whole series of issues in itself.
The UBI issue is a weird one. The entrenched view against people 'getting something for nothing' is very difficult to overcome. People (especially those on the right of the spectrum) would rather the economy collapse and we all go down together than break with their blinkered and self-interested view of what's fair and what's not.
In this situation, debtors resorted to distress selling, cutting their prices in order to attract a cash flow to themselves rather than their competitors. But because everyone was doing it, prices fell across the board, taking GDP down with it. Debts therefore fell less than GDP, and the private debt ratio actually rose. In his words
i get this from a business point of view, or even a personal view if people have to do an emergency remortgage or flog their car to free up funds.
how does it screw over the person with a big credit card, or financed car?
how does it screw over the person with a big credit card, or financed car?
I quoted the wrong bit before, the one below explains it better. Basically the value of money increases faster than people can clear their debts. So if you owe ten grand on a car, by the time you've paid off two, the remaining eight is worth more in real terms than the original ten.
"if the over-indebtedness with which we started was great enough, the liquidation of debts cannot keep up with the fall of prices which it causes. In that case, the liquidation defeats itself. While it diminishes the number of dollars owed, it may not do so as fast as it increases the value of each dollar owed. Then, the very effort of individuals to lessen their burden of debts increases it, because of the mass effect of the stampede to liquidate in swelling each dollar owed. Then we have the great paradox which, I submit, is the chief secret of most, if not all, great depressions: The more the debtors pay, the more they owe. The more the economic boat tips, the more it tends to tip. It is not tending to right itself, but is capsizing."
dazh,
Read that Guardian piece and got my head around it a bit easier than the 1st link! [though I got the gist of that one] Hope this thread goes well, I tried something similar a month ago but it died a death / got diverted.
I was concerned that governments were about to repeat the mistakes of 2008 with regards bail outs. I chucked in that Anthony Scaramucci quote because I thought it echoed some of the ideas around debt cancellation and UBI, essentially, that bailing out the poor would keep the economy afloat more successfully than bailing out corporations / airlines / banks etc.
Though this time, the banks aren't being bailed out, they've just been given trillions to distribute without proper oversight, thus incentivising them to maximise their own profits and quite naturally distribute it amongst their favourite clients rather than direct the cash to those who really need it.
A predicted outcome of this is that wealth will become further concentrated amongst the few, mirroring what has happened over the last decade, leaving us even more vulnerable to existential threats in the future.
There's been more coverage of this in the US, we've been too busy chasing Matt Hancock down on sets of spurious figures, failing to ask deeper questions. Good a article on Bloomberg where they frame the argument well, not presenting the situation as some grand conspiracy theory, rather they attribute events to negligence, systemic failures and lack of oversight that will lead to inevitable but familiar outcomes.
The more the debtors pay, the more they owe.
I think it was my misunderstanding of this line that gave me confusion. As in choosing to overpay a mortgage, pay the CC in full and so on was actually increasing your debt.
I can’t help but think that the Corona virus discussion has become a battle of information between those who want to keep us in fear of the virus, and those who want to keep us in fear of the economic cost.
I'd like to see the lockdown lifted in a clear and staged approach. I'm in the fortunate position of not being economically impacted (beyond an expectation of increased taxation). But clarity is needed. How do schools return? How do we maintain protection of the vulnerable? How do we control transmission on public transport? (have you ever commuted into Waterloo?). How do we stage office working? What do we do for international travel - THE vector of international spread. Reintroduction is a significant maintainer of endemic transmission, be it in a house, in a hospital or in a nation.
I genuinely think people will be sufficiently well-motivated, now they've seen what naked transmission looks like. Things will not return to what they were for some time. But 12mo time? Maybe.
Everyone who has suffered economically in this is a hero, and those are the people we should be clapping for, supporting with clear messages, and providing a plan for return to work.
As in choosing to overpay a mortgage, pay the CC in full and so on was actually increasing your debt.
If you can clear your debts straight away then this doesn't apply because even though you may owe someone money, you're not actually in debt.
If you can clear your debts straight away then this doesn’t apply because even though you may owe someone money, you’re not actually in debt.
how does it apply if the thing you borrowed money for has value - mortgage, car payment*
*car is obviously depreciating asset, but does give earning potential
Whatever the outcome this is the government the people voted for when given the chance (not just once either but multiple rounds of the conservatives winning elections Cameron, May, Johnson).
They are self serving the rich get richer view politicians, they will continue to hold these viewpoints.
People will lose jobs, the economy will contract, the rich will get richer and the poor poorer, this isn't going to change.
Personal debt written off? Only if it benefits the Conservative party, major investment and job schemes, only if it benefits the Conservative party.
Don't forget, we are still to exit Europe the end of the year, if you feel things are bad now, let's just see how it all is this time next year.
Bring back Cressers! We are all indeed doomed and he was saying it for years before we even got close to this stage!
Reintroduction is a significant maintainer of endemic transmission, be it in a house, in a hospital or in a nation.
Many people are going to be put in a position of deciding between earning money and risk catching the virus. I'm trying not to be consipiratorial but all this talk of releasing the lockdown and getting the economy going again is a clear signal that money is being prioritised over public health. There's a lot more the govt could do to protect the economy whilst protecting public health, but it seems to me they won't consider these things because it's against their ideology.
So far it’s cost the UK £20bn, if it runs until the end of the year it’ll cost £80bn. That’s a lot of money, but it’s nothing like the cost of the Credit Crunch bailout.
Still less than the vanity project that is HS2. Although that is over a few years
I’m trying not to be consipiratorial but all this talk of releasing the lockdown and getting the economy going again is a clear signal that money is being prioritised over public health.
now this bit i do understand -its creating public buy-in for removal of lockdown (not necessarily yet but) at some point, a significant portion of the population is going to WANT to go back to work, to go to the pub, and to get on a plane to Malaga. That's a lot more palatable than starving people out of their homes.
how does it apply if the thing you borrowed money for has value
That's the whole point, asset prices go through the floor, making money more valuable. If you've borrowed to buy a house then it's a double whammy. Your net debt (the part you can't clear) increases in value while the value of the house decreases because everyone in the market is selling up in order to clear their debts. The end result is that everyone, asset owners and debtors, are worse off. And then you get creditors (banks) collapsing because the debts they hold aren't being serviced, which causes businesses to go bust because they can't access credit to maintain cashflow and before you know it the whole system collapses, all because we were too proud to go against our instincts and write off debts and support incomes at the beginning.
not presenting the situation as some grand conspiracy theory, rather they attribute events to negligence, systemic failures and lack of oversight
Robert Hanlon proved right again.
What are the chances of having our credit cards wiped out?
I sincerely hope sweet FA....
So those who buy everything on tick to live a life beyond their means get given a clean slate, whereas the guy who lives within his means, doesn't buy stuff he can't afford gets FA yet will essentially pay for those that do through higher interest rates and bank charges.
F off!
Similar thing here in Germany.
You can get help if you're in financial difficulty and can't meet the repayments on your leased motor or such, whilst the wise man who put a bit of money away each month, bought his motor outright gets **** all until he has burnt through his savings.
You bought it, you pay for it.
I sincerely hope sweet FA….
So you prefer the economic collapse scenario? We'll all be starving and penniless, but at least it'll be fair!
Some top stereotyping going on 😀
Alpin, you wouldn't say everyone that smoked weed was a stereo-robbing layabout would you?
Why should I pay out for others frivolity?
Why should I pay out for others frivolity?
Good question to ask in normal times. In a deflationary economy though it's irrelevant, because everyone (well, almost everyone) suffers equally in the great race to the bottom. The only ones who benefit are those who are cash rich and un-leveraged.
Still stands...
Those that live within their means get ****ed over twice...
If everything bought on tick gets taken back, then fair enough, but that won't happen, will it?
Then should I get a credit card buy all the things I've lusted for over the years but not bought because I don't want debt hanging over my head now because my debt will be wiped clean?
Why should I pay out for others frivolity?
Of course none of our opinions really matter with 4 years before the next election but it's probably better the think pragmatically.
It's an fact the Western Economies are based on Debt Fulled Consumer spending. If your one of the minority who has no debt and saves for big purchases that's fine. Really it boils down to your financial morality and what helps you sleep at night. I've got a mate who is exactly the same, he even keeps a reserve of Gold in a safe in his house. He's not a wealthy Guy, just very prudent.
Anyway, even if you decided that's the way you want to handle your finances it doesn't mean you haven't benefited from other people spending what they don't have, your Job no doubt relies on it.
Don't you live in Germany? I seem to recall they're pretty anti-borrowing for consumer crap? You're probably more in-step with Germany than the UK
Cheers DONK,
Never seen that quote before, or heard of Robert Hanlon.
'Never attribute to malice that which is adequately explained by stupidity'
I'll throw another one in, 'why would it be different this time' Nail Ferguson that one. There was an economic crisis a decade ago, are we happy with how that was dealt with? If not, then ask yourself, is the situation going to be handled differently this time? or are we about to repeat the same mistakes.
Those that live within their means get **** over twice…
Like I said, we need to rethink our entrenched prejudices and instincts. On the surface 'living within our means' sounds virtuous, but equally you could argue that if everyone had to do that then there would be no way people could escape poverty. Why should I live within 'my means' and be poor when the person with inherited wealth lords it up?
Why should I live within ‘my means’ and be poor when the person with inherited wealth lords it up?
That is another question in itself. Maybe have a think about who we vote for and what kind of society we want to live in.
neither had I, if you google him he is "famous" purely for sending that quote into a competition apparently!Never seen that quote before, or heard of Robert Hanlon.
Curiously the very similarly named Robert Heinlein (who you might've heard of, wrote Starship Troopers etc & who I originally assumed was being referred to) wrote something VERY similar back in the 40s [b]"You have attributed conditions to villainy that simply result from stupidity"[/b]
Two really similar quotes from persons with really similar names.
It's the stuff of science fiction that is.
Or one for the conspiracy theorists.
@TiRed the rest of your post makes sense but this is pure bullshine
Everyone who has suffered economically in this is a hero
A hero? for doing what exactly - and for clarity I am almost certainly one who has due to failed house sale as direct result of lockdown
A hero? for doing what exactly
I think he's referring to the fact that many people have been asked, and have on the whole agreed, to massively change their behaviour even though it punishes them financially, to safeguard the health and lives of other people they don't know. One of the few good things to come out of this is the extent to which people have willingly and entusiastically put their own interests aside in favour of the greater good. They couldn't have done that without the necessary government support, so talk of withdrawing that support risks undoing all the things that have been achieved so far.
I think he’s referring to the fact that many people have been asked, and have on the whole agreed, to massively change their behaviour even though it punishes them financially, to safeguard the health and lives of other people they don’t know
Exactly.
While on a personal level I agree with Alpin on the unfairness, what are the long term consequences of writing off debt:
Mortgage
Credit Cards
Bank Loan
Student Loan
which of these gets the treatment, and how does that affect the likely behaviour of anyone in the future who might be considering home ownership, doing a degree, borrowing to buy a car. And what is the consequence of that?
Two really similar quotes from persons with really similar names.
Pretty sure I was introduced to Hanlon's razor on here, had to google who/where it originated tho & wiki said Robert Hanlon/joke book story
Or one for the conspiracy theorists.
Make's you think...
As per AJW on the surface it seems unfair but nose spite face scenario if we all end up in the shit without it. But
which of these gets the treatment, and how does that affect the likely behaviour of anyone in the future
are the gov really going to care about future behaviour? Sounds like the economy has to be saved and there's less concern about long term ramifications.
what are the long term consequences of writing off debt:
The objective of debt relief and income support is to prevent a deflationary downward spiral. You wouldn't need to write off debt, but you could suspend it or restructure it into more favourable longer term debt. Stuff like student loans could be written off as they are 'virtuous' debts. Mortgages could be frozen at low interest rates, credit card debts suspended and/or restructured until the debtor has the means to repay (which would result in some write-offs). The other option is to give people a one off payment and allow them to choose for themselves how to use it (so called 'helicopter money'), or boost their incomes via UBI. Or do all of these things.
Everyone who has suffered economically in this is a hero
Spoke to my b-in-l yesterday evening.
He's £500 down on his usual pay. He now receives 2900 instead of 3400. Hardly going to mean he has to visit a food bank.
And you in the UK, with 80% furlough pay, are doing well. Here in Germany it's 60%,67% if you have kids. They're going to up it over time to 80%.
But the shit is, the guy working at BMW earning 120,000k a year gets his 60%, yet the waitress earning 1,500k only gets 60%. Is that fair?
And worth regards to help for the self employed, the man who has a few cars on tick but with only 5k on his account gets hand outs so he can keep financing his cars, whilst me with a bit more on my account (due to my resistance to debt) gets nothing. He needn't sell one of his cars, but I'm expected to burn through my savings until I've nothing left and then I can go to the state with cap in hand.
Unfair?
But the shit is, the guy working at BMW earning 120,000k a year gets his 60%, yet the waitress earning 1,500k only gets 60%. Is that fair?
In UK its max'd at £2.5k per month so Mr bmw would get way less unless Co make up the difference.
Still not getting the hero bit for just complying with current gov laws & regulations 🤔
Stuff like student loans could be written off as they are ‘virtuous’ debts.
I've got ~£25k left (about 6% interest) on mine. I could nearly pay that off with what I've got waiting in my house deposit fund (at below inflation interest).
I'd be giving the gov. more money than I'd pay in half a decade of income tax; plus then have an extra £180 a month on my salary for 'leisure spending' in my local economy.
Would have done so already if it wasn't for corbyn/momentum rumouring to cancel them.
Any threat that it might be written off means I wont be over paying, as I'd be throwing money away.
So it will hide in a bank account or ISA or premium bond until I either buy a house, or am forced to spend it to feed myself.
Nicely explained dazh,
But I see what you have presented as being three options.
Suspend /restructure debt.
Parachute money. (sorry, helicopter money)
Universal basic income.
I see them as medium term, short term and long term, in that order.
Still not getting the hero bit for just complying with current gov laws & regulations 🤔
Lots of businesses and individuals who were not compelled to cease activity did so, for the benefit of the wider public and the detriment of themselves. Not sure I'd go with hero, but lots of people had a tough choice to make and, perhaps surprisingly, chose society rather than self.
But the shit is, the guy working at BMW earning 120,000k a year gets his 60%, yet the waitress earning 1,500k only gets 60%. Is that fair?
it may not be fair (or it could be, if its paid out of the equivilent of national insurance) - but it is what you want if you want the economy to come out of 'pause' in a normal way. If you just paid everyone £1500, the waitress would be likely to continue to spend money as normal, and so the businesses she supports continue after the lockdown in BAU - however all the businesses the rich guy spends money with suddenly get nothing at all as he is stretched to simply service his debt (assume a large mortgage at the very least), and therefore go bust. The intent of the payment is to pause the economy, not to ensure people have a certain lifestyle.
Funny how some people are now worried about fairness when we live in a fundamentally unfair society. I wasn't happy about the banks being bailed out, but it was necessary so that us plebs could get paid and get money out of our bank accounts. This is much the same, except it's the people who need bailing out, not financial institutions.
Funny how some people are now worried about fairness when we live in a fundamentally unfair society
+1
I think the issue of fairness is only seems to become a problem when other people get something and you don't, even if that actually makes things fairer.
Whilst it may have been necessary to bail out the banks a decade back, were you really happy with how they were bailed out? With little or no oversight, leading to an even greater concentration of wealth and power than existed before?
The system failed then because the banks got too big to fail, having used their profits to buy up smaller banks, creating effective monopolies and extracting bonuses and dividends like there's no tomorrow. (Tomorrow didn't matter to them, they'd paid themselves against forecasts that projected sun when in fact there was a storm of their own making on the way.)
When it all went tits up it had no effect on them. They then used the bail out money to do exactly the same things as they had done before. Including a lot of stock buy back to fatten their packages. Same for the corporations who are asking for pay outs now, when the going was good they spunked all their profits on bonuses, buy backs and bubbly for the shareholders party. Then they came cap in hand to governments.
There's a danger of history repeating itself. I agree that this time we need to bail out the people but we should be aware that a lot of the bail out money will go to the same old culprits and is probably already sitting in off shore bank accounts.
Funny how some people are now worried about fairness when we live in a fundamentally unfair society
fair is very much what you make of it.
I've got friends of all ages and varying professions (via cycling); and a load of friends of my age and education but vastly varying upbringing (from uni). That's likely broader than many people's circle of acquaintances.
However I still dont know anyone who's a career benefit claimant, anybody living on just state pension with no assets, anyone who's an upper class "living off their estate" type person.
My judgements will of course be coloured by that.
Take me and my colleague. same approximate age, job, salary. Both childless, cohabiting with partner.
We have almost the same car. Mine, bought cash (second hand). His, bought on finance via bank (second hand).
on some of the suggestions in this thread, he gets a free car, while I'm stuffed. I would be very resentful (to the government, not him) about that. I'd call that unfair.
However if they whack up income tax so they can pay for a decent unemployment package for every redundant hospitality and leisure industry worker I'd call that fair - even though over a few years it would cost me far more than that car ever did.
Em... does this mean I should buy that TVR I've always wanted now?
were you really happy with how they were bailed out?
Not at all. But without it things would have been very much worse. Same goes this time. There's no perfect way to bail out an economy. There will be winners and losers as always but it is necessary. I don't hold much hope that it'll happen, especially with the tories and Trump at the helm. I think this time the collapse will happen, and we'll still be recovering from it for decades. They've done the bare minimum and so far it's been enough, but they show zero appetite for doing what's required from this point forward and naively think we can all just go back to work and pick up where we left off.
Meh, nothing will change, printing money has consequences, it'll devalue our currency, we're in connected world. If it was easy every populist government across the globe would be doing it.
We're in for a big recession, proper austerity (will make the last 10 years look bountiful), and we'll make it even worse by forging ahead with Brexit.
UBI, no chance most of the population (not just those on higher incomes) won't want it, we're a very competitive society at the moment.
Student loans are a time bomb waiting to go off, in the next 5 years many will come to full term without having been paid off, that's a lot of money to be written off. The interest rate is terrible on more recent loans.
it’ll devalue our currency
And deflation and depression won't? I'm sure we'll all be able to take great pride in the value of the pound when we're losing our jobs and seeing our pensions and saving evaporate.
We’re in for a big recession, proper austerity
A recession yes, but not austerity I reckon. Not if the tories want to get elected again that is. We'll see MMT by the back door without them really admitting it. The money tree will be in overdrive and the government will pretend it doesn't exist by hiding it behind convoluted and opaque mechanisms like quantitative easing which the voters don't understand. And then they'll take credit for it by falsely claiming they fixed the economy with their usual prudent and responsible measures which only the tories can be trusted to enact.
A recession yes, but not austerity I reckon. Not if the tories want to get elected again that is.
This. Boris is going to be spending money like water in the next four years in a gamble to get the economy going and win the next election. Any government would.
Then we're going to have Labour offering themselves as the party of fiscal prudence and the next election is going like 2010 with every party promising to get a grip on debt/spending.
I can't see any other way it can go. There just won't be a gap for Labour to offer themselves as the "more spendy" party.
Labour's counter to that should be "look, the tories now admit it's OK to spend money, but they're spending it on the wrong things"
Labour’s counter to that should be “look, the tories now admit it’s OK to spend money, but they’re spending it on the wrong things”
We're going to have eye watering debt and a global recession/depression, there won't be a list of attractive options, it will be a case of borrow + get whatever tax revenue we can get away to spend in areas that provide CPR for the economy.
Arguing to stop spending on stuff that might help the economy and spend it on stuff that won't isn't going to win votes.
I'm tempted to max out the credit card on an advance, take a big loan and get mrs_oab to save the cash for me.
If this credit wiping thing happens I'm quids in. If it doesn't, I can repay or live off the wedge for a while.
Win. Win. Win.
Whilst it may have been necessary to bail out the banks a decade back, were you really happy with how they were bailed out? With little or no oversight, leading to an even greater concentration of wealth and power than existed before?
RBS simply tore the piss out of it.
The very day they announced the Bail Out, our useless CEO stood in front of the cameras on the News at 10 and said words to the effect of “now we’ve be given liquidity we are making £1bn worth of fairly priced loans and other financial facilities to small and medium sized business to end the credit crunch”.
I was amazed, I was an Account Manager for a sub brand called Lombard, we provided secured loans and faculties for business, basically any loan for a business from RBS, NatWest our Coutts that wasn’t a cash loan came via us. We financed everything from Shop Racking, to Printing Presses and Aircraft. In the months before we’d had our underwriting authority removed and basically couldn’t lend unless it was high rate and completely safe, we thought “well this is great, off we go again, we’ll drag this bank out of the shit”. What actually happened was they made 50% of us redundant, our redundancy terms were fantastic, 3 weeks per year served, 3 months gardening leave, etc etc etc. They basically took the bailout money to clear the Ambro nightmare and pay the redundancy costs. They’ve been running it down ever since. The Dept I worked in had about 1000 managers nationally and about the same in admin / support / management. It’s 12 people now, 1 rep per regional office.
I'll not make any predictions about what path the government will take, I'm not sure anyone really has an idea of what the economy will look like in 3 months time let alone a year from now.
Heading out of lockdown feels even more precarious than heading in. Were witnessing the same confusing messaging from the gov't that we saw at the beginning of the crisis. The lack of guidance is demoralizing and will be a hindrance in building confidence for business and public alike.
My feelimg that there will be a public awakening of some sort, emerging from a landscape similar to the Ballardian nightmare that dazh describes. Issues surrounding corporate greed, taxation, tax havens etc will boil over. It won't be led by the usual suspects or political groups, it won't be Antifa, it'll be Aunty Fi. it'll be the nurses and healthcare workers suffering from PTSD, shopworkers and warehouse staff along with the millions of recently unemployed.
If the Brexit mob thought they could shout the loudest they haven't seen anything yet. I'm hoping that nationalism is a busted flush, it might not go quietly but it will go meekly. (I know thats a bold prediction but I've said it now)
Any assumption that the usual Tory Labour hegemony will see it through to 2024 is exactly that, an assumption.
Sorry for all the doom and gloom. Don't worry, it'll be just like the 70's, strikes and tea lights, three day weeks and carry on camping.
I’ve got a mate who is exactly the same, he even keeps a reserve of Gold in a safe in his house. He’s not a wealthy Guy, just very prudent.
Doesn't sound prudent to me. What's he going to do with that when he needs cash? Pop it in his rucksack and head off down to the local gold dealer? Sod that.
Then should I get a credit card buy all the things I’ve lusted for over the years but not bought because I don’t want debt hanging over my head now because my debt will be wiped clean?
Not everyone with credit card debt has spunked it all up the wall. Quite a few people use them to stay alive, and end up being unable to shift them. And as for fairness - when is society ever fair? I could go on all day about how the rich get to **** everyone over, but everyone seems to accept that particular bit of unfairness without much bother.