To wonder why Rishi is continuing to throw out money?

[MiaMarshmallows]

Just reading now about all these different sectors who are going to be getting an extra boost. Isn't this all just contributing to the borrowing and meaning that we will be paying this back for longer and longer?
I know it is needed to help get businesses up and running but he does seem to be throwing money around like paper confetti?

@TheDrsDocMartens

Yet he’s still ignoring 3 million people who couldn’t get support and some haven’t been able to work for almost a year.

Disgusting isn’t it

@oil0W0lio

I think they are engineering a property price crash so as to deflate the money supply

I don't think so - they are planning on propping up the property market if anything (extending stamp duty freeze, incentivising lenders to lend to first time buyers).

@MiaMarshmallows

I get that, just think people are underestimating the recovery from all of this continuous giving out of furlough, grants and what not. The final number will be astronomical.

And I think rishi, who knows the actually figures, will be more aware of this than anything.

Like pp said, what do we do? Let thousands of people lose houses, millions lose jobs?!

At the moment, Sunak has two options :

1, Keep the money flowing to support the economy through the vaccine rollout until everything can reopen, people can get back to work and the country can get back to normal. The cost of this will be enormous, and we will be repaying the debts for decades.

2, Turn off the cash now and allow almost the entire travel, tourism, aviation, non-essential retail and hospitality industries to collapse because they are currently unable to open & trade. The cost of this would be enormous, and we would be repaying the debts for decades.

On balance, the government has decided that option 1 is preferable, and most other developed countries are doing something similar.

he wants to build up enough popular support to get the top job when our incompetent lying buffoon gets thrown out, and a vacancy arises.

To wonder why Rishi is continuing to throw out money?

He wants to be PM, really badly.

Oh - yes, I hadn't seen the response above me - but that one!

[quote SleepingBeaut]@flippingtrampoline he really does doesn’t he. It’s destroyed peoples businesses and lives I know so many who missed out on the SE grants and it’s crippled them financially[/quote]
It's a scattergun approach. Throw loads of money around and hope some of it sticks where it's needed. He doesn't care about the 3 million excluded self employed nor those who've missed out on furlough. Huge numbers of people/businesses have received grants they didn't need. Huge numbers of people/businesses have received bugger all and are now in desperate straits. He's had a year to sort out the anomalies, the unfairness, etc., yet he sits on his hands and does nothing.

that we will be paying this back for longer and longer?

The trick is to try and grow the economy, so that there are more jobs and people with money to spend. Fewer people on benefits. Overall, Businesses grow and overall tax receipts increase and it's actually paid back sooner than expected.

Without letting inflation get out of control.

@flippingtrampoline

There were warnings of a big inflation problem in the near future issued yesterday.

I worry about high inflation in the future because it will be addressed with high interest rates, which is bad news for mortgage holders.

I don't know how wise it might be to give huge injections of cash into sectors of the economy that are less viable post-pandemic and after a year of changed habits that may not revert back.

Someone said to me that the 5% deposit for first time buyers, will mean interest rates on mortgages[or he may have meant first time buyer mortgages?] will be higher, because risky lending to first time buyers who dont have many assets, and more at risk of losing jobs.

Do you, and anyone else, think this may be correct?

Someone said to me that the 5% deposit for first time buyers, will mean interest rates on mortgages[or he may have meant first time buyer mortgages?] will be higher, because risky lending to first time buyers who dont have many assets, and more at risk of losing jobs.

Do you, and anyone else, think this may be correct?

It is normal to get better interest rates if you borrow a lower percentage of the value of the property.

Firstly High Government debt is a problem because tax revenue money is being spent over n interest payments on this debt rather than using it for Government services or even tax cuts.

So there are basically four ways to deal with high Government debt:

1. Default on the debt - this is generally a very bad idea because it damages trade, confidence in a country, any future borrowing will be at high interest rates.
2. Cut Govnt spending on services- this was proving highly unpopular after the 2008 banking crisis and that was for a much lower debt. The scale of spending cuts required to deal with the record levels of debt even if spread over many years would simply be politically unacceptable.
3. increase taxation- already the top 1% of earners pay 30% of income taxes, the next 49% of earners pay 70% of income taxes and 50% (low income earners ) pay no income tax. If f you try to squeeze more out of the top 1% then they will start to leave the country and the richest will go first also you don't need many to go before it starts making a big impact on tax revenue (see for example what happened to President Hollande in France).
4. lastly and what I think will happen is to simply print money to buy back the debt and to also inflate the debt away. However this will only work if other major economies do the same- this I think will be the main agenda item at the upcoming G7 meeting in Cornwall.

OP I think you raise a valid issue but I think where we differ is that I think there has been no understanding of business and how it works, so it is not achieving the best outcome, or preserving the most jobs. Half price burgers in August for example, VAT cuts when accommodation is usually full such as in school holidays.

and the richest will go first
to another country that also wants to tax the richest?

@oil0W0lio

and the richest will go first to another country that also wants to tax the richest?

Not really as there are always plenty of countries keen to attract high earners to collect their tax revenues which even though lower than their original countries are still substantial. Switzerland, Gibraltar, Channel Islands etc spring to mind and you only need to spend 186 days there. When President Hollande increased income taxes on high earners many simply went to Belgium.

@oil0W0lio

and the richest will go first to another country that also wants to tax the richest?

There are plenty of tax havens that will welcome business owners and their business "headquarters".

Just look at the sheer number of businesses with their HQ's on the Isle of Man! Then there's Gibraltar, Panama, Virgin Isles, Monacco, etc. Then there are all the "low" tax regimes such as Switzerland which are the "go to" place of choice for the likes of pop stars "for creative reasons" of course!

@1dayatatime 4) lastly and what I think will happen is to simply print money to buy back the debt and to also inflate the debt away. However this will only work if other major economies do the same- this I think will be the main agenda item at the upcoming G7 meeting in Cornwall

With inflation, is there necessarily interest rate rises as well?

@lightand

"
With inflation, is there necessarily interest rate rises as well?"

Not necessarily no but it depends on how it's done. So the Bank of England has been busy printing money since 2008 to buy back Government debt (so called Quantitative Easing - because it sounds more complex and then hopefully no one will ask any tricky questions). Despite printing billions interest rates have remained low since 2008. But the sheer scale of the Covid debt will make this approach more difficult but it might still work.

Also if all countries (or at least major economies) print more money then every one is equal. But if one country won't agree to the great print off (i.e Germany) then it gets difficult because the pound will be worth less against the euro and any investor in UK Government debt will then need higher interest rates than say German Government debt.

But I genuinely think inflating the debt away will be the approach and this will be the main topic of the G7 summit this summer along with trying to get Germany to agree to it (which they won't).

1dayatatime: 4) lastly and what I think will happen is to simply print money to buy back the debt and to also inflate the debt away. However this will only work if other major economies do the same- this I think will be the main agenda item at the upcoming G7 meeting in Cornwall.

I am betting on this one. Magic Money Tree. It is plausible. A rising (or sinking) tide takes all the boats with it.

Rishi is my favourite politician of all time. The man has done an exceptional job and I am inclined to vote for the conservatives for as long as he stays at head of the exchequer.

With regard the 5% deposit there will be a catch. There was for the previous 5% help to buy deposit scheme. The government owned the 5% of the home. If after 5 years your house was worth more then so too was the amount you owed back.

Rishi is my favourite politician of all time.

A politician who is given the job of showering the population with money will have a good chance of taking over from our incompetent buffoon when a vacancy arises.

This does not necessarily reflect his abilities.

I dont think I would mind him being PM actually - as long as he did exchequer at the same time lol

They have already printed extra money to stimulate the economy, rumour has it he will raise taxes only to cut them again before the next election to buy votes.

The Tories love a bit of austerity. Just as long as it keeps the poor down.
I can just imagine them now..."Quick get programme on the TV like benefit street but call it Furlough Street to start belittling all those lazy people so we can make them the scapegoats to detract from the fact that we have paid out billions to our mates on dodgy contracts."

Has everyone seen his cringey pre-budget video? So embarrassing!