I am sorry but I just do not buy in to the Governments reaction today and its justification.
Everyone fears a recession – of course. After years of debauched consumerism financed by mad levels of lending and debt, consumers have had enough and now moving to cost cutting and savings. They do NOT want to borrow and should definitely not be encouraged to do so.
The Director-General of the CBI, Richard Lambert, said on BBC News this evening that we need interest rate cuts to persuage consumers that it is OK to go and spend.
This is criminal and just the sort of behaviour one would expect from someone in early in a pyramid selloing scheme.
The real problem is that the interests of the individual now are not the same as the interests of the whole. It is in the economy’s interest that we all spend but our individual interests to cut expenditure and debt and therefore reduce our spending.
A £50bn part-nationaisation of some UK banks is not the answer – I deal with this later.
The answer is to very significantly reduce taxes. Imagine using the £400bn made available by the UK Government today for the banking system for tax reductions! This sum is around 80% of all Government tax receipts! Click here for details.
What effect would a 1 year tax holiday for individuals and companies have on the consumer?