take from the poor and give to the bully bankers

[Paul88]

I am no economist but nor am I stupid.

The biggest scandal is the tuition fees. Where the government is not even saving any money - instead of giving it direct to the universities they will be paying the same amount to the student loans company in interest. And then the students, when they start earning continue paying the student loans company for the next 30 years. Well I say the student loans company but it has to borrow the money from ... the banks. There is no risk, a guaranteed rate of return.

So here is the new brilliant idea. The government guarantees loans to small businesses. That means the banks can lend to them, make a profit, and have no risk. Why is this claimed as a good news story?

The only reason we are in this mess is because we bailed out the banks in the first place and now they are acting like the worst kind of loan shark on a multinational level, basically acting in a cartel to push interest rates to governments to the highest possible level, forcing countries to go to their neighbours for hand outs to pass on to the banks.

It is classic bully behaviour. But of course if you set yourself up as the bully's best friend you are fine aren't you - you get well looked after, nobody will steal your dinner money, in return you go around saying the banks are wonderful and make all this money for us and it is the victims that are at fault.

I know labour didn't fix it but you can be sure it won't change with the tories in power.

Just a moment, we're on the edge of another international credit crunch.

During the last one, small businesses suffered because they could not secure credit (some folded), and the cost of borrowing (if you could secure it at all) shot up.

You appear to be saying that steps to prevent the impact on small businesses are wrong. I take it that you're an anti capitalist, and want to see the collapse start at the bottom.

As you said, you're no economist.

There are a myriad of reasons why we are in this economic crisis, and if the government had not bailed out banks like Northern Rock, RBS, it would have looked much much worse.

1. People would have lost their savings - there is a guarantee of up to £50k (backed by the government), but anything over that would be lost. One bank falls, and you start a run on all the banks - people withdrawing their savings etc. (how many people do know about the government safe deposit scheme?)
2. Loss of confidence in the UK banking sector and/or economy which means that it would have been much more expensive for the government to raise funds through the bond market (look at Italy at the moment) and foreign investors would have shied away from investing in the UK economy.
3. tens of thousands of job losses, which has a massive impact on the economy (loss of confidence in the economy, loss of income which is then not spent on the high street, which leads to further economic problems)

Most economists would say that saving the banking system is a lesser evil than letting them collapse.

For tuition fees - it does cost much more than just over £1k a year to educate someone to a degree level, particularly if they are doing any kind of degree which requires labs or specialised equipment (and the UK economy needs scientists). Due to the previous government's insistence on trying to get 50% of people into university, there is a massive shortfall (it costs approximately £9k a year to educate someone - meaning a shortfall of £8k per student). There are alternative ways of raising money - having lots of foreign students and charging them more (but given the sensitivity over immigration and the abuse of the student visa system, this isn't really that viable), outside funding, sponsorship etc. all of which are very difficult to get hold of, and it doesn't change the fact that many universities were/are already hugely in debt.

and it is very easy for the current government to continue to blame the previous government's bailout plan and the banking system, rather than saying "actually, our economic policies are quite rubbish and are possibly causing the UK to enter a double dip recession".

NO government is going to admit to a failure like that - much easier to blame someone/something/anything else.

If you listened to the governor of the BoE yesterday you'd appreciate that the problem the UK has is not one of solvency but of liquidity. We need to keep the money flowing around and, given that 500,000 people are employed in the financial sector, measures to make credit more easily available are generally a good thing all round. Use dumbed down phrases like 'bully bankers' if you like, but they're pretty silly.

I completely agree, you are not an economist.

The banks did not force the UK governments over the last thirty years to continually borrow money. The politician's did that all themselves to buy our votes.

As always, it is more complicated. Everyone just wants to blame the rich bankers but it's not do easy. For a start, governments just told banks they have to keep more money aside to protect themselves against bad loans. Small business loans are notoriously risky so you can assume that without a guarantee banks won't loan to them as it will cost them too much - they'd have to fork our for the loan then put a huge whack of additional cash aside to protect themselves.

I do suspect that the Tories will spend their entire term suffixing any point they make about the economy with 'the debt that labour left behind' but in actual fact all Governments have had huge levels of debt and will continue to do so. The point with the Tories is always so keep people where they are - so yes you can own a home a starter home on a shared ownership plan but you will probably not be able to trade up as you cannot earn enough as you cannot afford to be either educated in the first place or afford to pay back your massive debt. They will fuck over the NHS (they did last time because fundamentally they are paying lip service to something they don't really believe in) - they will fuck over women and children, particularly single Mothers and disabled people on benefits because they feel they are a drain on society and those children are generally more problematic (see the new extra 'childcare' policy - read social engineering)

It continually depresses me that the Lib Dems (whom I have wholeheartedly supported until the joined forces with evil) after all their assurances reneged on the Tuition Fees debate - we need to educate and culturally enrich young people, it gives them hope and aspiration and the Tories are doing all they can to save that for the privileged few, both my husband and I are the first generation in our family to be educated beyond the basics, we both have people in our parents generation who practically illiterate and fundamentally uneducated. If we had been faced with tuition fees of this level neither of us would have attended University - that debt would have been (without any further debt incurred with living expenses) more than our Dads earned a year and would have seemed beyond our grasp. To coin a phrase, not for the likes of us.

Conversely our children have grown up fully expecting to be educated and to have professional jobs and to have great aspirations - considering our parents lack of education and their unskilled jobs (although they all worked very hard) he and I have come a long way - he has a great job, earns well and supports his family and I have been able to accrue a small property portfolio that brings me and income and enables me to stay at home with my children. The sadness about the Tories and their horrible policies is that the aspiration to achieve will be killed for a generation of children if they stay in for a couple of terms. They will feel there is no point to things, that things are beyond their grasp. Margaret Thatcher did untold damage to even our perception of society and forever changed us into fundamentally more selfish people. Educated and fulfilled and more altruistic people will in turn provide a better long term investment for this country and the increasing financial burden of the growing elderly population.

Apologies for the rant so early on in the day but their deception and vilifying of the unworthy poor make me sick.

It's a bit much to class the Tories as evil.

The ideology is just different. Principally the Tories believe that people should help themselves and the government should do as little as possible. And the best way to achieve this is to have low taxes and let people sort themselves out.

Old Labour believe that the government should do as much as possible for people. And such schemes can be paid for by taxing the rich.

New Labour thought that they should do as much as possible for people but not tax the rich as that's unpopular.

Ed's Labour...well I've no idea what they believe in.

'Ed's Labour...well I've no idea what they believe in'

They have a 'five point plan'. Not 6, certainly not 7, just 5.
They are keeping it nice, simple and snappy for the peeps.

"The biggest scandal is the tuition fees"

if you think that we are sunk
the biggest scandal is how disabled people are being targeted by this government.

For donkey's years our politicians have systematically failed to balance the books - since the mid 1930's the books have only balanced once. Every other year has seen the government borrow more and more money to buy short term popularity - even Baroness Thatcher's administration, so vilified by the left and praised by the right, stands guilty of this. It was inevitable that there would become a financial 'judgement day' sooner or later and that this would occur when growth was at its lowest.

Well, guess what, that day has arrived and all those trillions of pounds, not just here in the UK but across the world, need to be paid back. It is to the eternal misfortune of Cameron that the Great Payback will have to begin on his watch.

One thing that is absolutely incontrovertible is that the bankers never forced the government to borrow more money than they could pay back. The economic crisis that we are going through now is a debt crisis - it is very different beast from the one that the banks had in 2007/8 and it is wise that we see the problem for what it is - It has been caused by big government, big government spending and a swollen public sector. It can only be cured by slashing the size, scope and capability of the state and until we all accept that, we are going to remain in economic limbo.

Whats the 5 point plan Claig? I'm really interested in knowing?

The only thing I heard yesterday was tax the bankers £2billion to pay to create youth jobs. In the context of our deficit, that's like me staring at the face of bankruptcy and saying I'll save money by removing Sky Sports from my premium package which will save me £2 a month.

I do not disagree about the targeting of disabled people - I have two disabled children who are fine whilst I am on the scene but at some point they will be disabled adults and at the mercy of the 'system'. We are now whilst they are children, trying to accrue wealth to protect them from it all (with properties etc) in the long term - What we are doing of course may be counter productive and may deny them access to services but I cannot see what else we can do because I really feel the way things are going that people either elderly or disabled are going to be pushed further and further into the margins of society because they are seen as burdens and not contributing.

The reason I think the tuition fees is so problematic is that it changes people's perceptions of themselves, their place in society and how cultured (or not as the case may be) - my concern is that we are relying on future generations to earn for our elders and our disabled and the neuter them intellectually and leaving only a certain strata in society able to compete globally for jobs etc makes us all poorer. This is when it is pertinent that DH and I are educated because we are able to provide for our disabled (and other) children for the long term.

But please don't think I don't have concern for the disabled, the marginalisation of disabled people is bad enough and we are being encouraged as a society to turn our backs on them and denying them access by denying them funding.

'Whats the 5 point plan Claig? I'm really interested in knowing?'

Are you a glutton for punishment and cant. Can't you just imagine what is in it?

'Repeating the bank bonus tax - and using "the money to build 25,000 affordable homes and guarantee a job for 100,000 young people"
Bringing forward long-term investment projects, such as schools, roads and transport, to create jobs
Reversing January's "damaging" VAT rise now for a temporary period
Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance
One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"

Is there any wonder that they are not denting teh Coalition at all?

'Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance'

That's the best they've got. God help us.

In the midst of the biggest financial crisis since the 1930s and in the middle of a 'lost decade', that is all they can come up it

'Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance'

1 year cut, not 2, certainly not 3, just 1.
5 point plan, not 6, certainly not 7, just 5.

It's almost as if they don't want to oppose.

First a note was left saying "sorry there's no money left".

Now it's almost as if Rhett Butler is in charge of the policy unit and in the midst of the worst financial crisis in living memory is saying

'Franlkly dear, I don't give a damn'

'Gone with the wind' is probably a good description of what happened to our economy under their command, and "sorry there's no money left" was the parting note.

'Reversing January's "damaging" VAT rise now for a temporary period
Immediate one-year cut in VAT to 5% on home improvements, repairs and maintenance
One-year national insurance tax break "for every small firm which takes on extra workers, using the money left over from the government's failed national insurance rebate for new businesses"

Don't they understand the magnitude of the situation? Don't they understand that the time for band aids and spin has long since passed? Didn't they look out of the windows of their ivory towers and see millions of people marching in the streets?

Claig, you should be Ed's advisor. You seem to know more about their policies than he does.

The bankers bonus tax sounds great on paper. IIRC he said it would raise £2 billion. What's an affordable house? £100k? If so, 25,000 of these would be £2.5 billion already. Where's the money for the 100,000 new jobs for young people!?!?!

Bringing forward investments? You mean just like the ones the Tories have done but Labour claim are wrong?

And as for VAT, the last VAT cut was a disaster. A total mess. Most people barely noticed the difference so it didn't encourage ppl to spend money. Some retailer's simply didn't bother passing on the costs. Yet it cost the govt billions!

And yes, the whole 1 year thing just shows how he hasn't grasped the magnitude of our problem. We'll be lucky to get back into the black in 10 years, let alone a nice soundbite for 1 year.

'What's an affordable house? £100k? If so, 25,000 of these would be £2.5 billion already. Where's the money for the 100,000 new jobs for young people!?!?!'

Excellent point as are all your others.

You're not supposed to ask awkward questions. This is the 'five-point plan', it's been ages in the making, please let there be no piss taking.

I don't know much about their policy. I had never heard of the 'five-point' (not 6, certainly not 7) plan until I read Ed's webchat on MN. He mentions it there and what struck me was when he said that one of the five points is "cut VAT on home repairs". I knew right then that they had failed to understand the magnitude of the crisis we are in.