This is really for Arthur and Tom as I have had chance to reflect on our chat. Had to go to Tesco as the co-op had no milk. The queues were awful. All these people with money to spend. Perhaps we should ask Terry to run the country as Tescos have plenty of cash.
You both asked what I would do as I don't think putting money into the banks is helpful and will stop a serious recession.
Recapitalisation will cost far more than we (the taxpayers) can give.
If we pay market value it won't help the banks' capital position and to pay above market value will be to waste taxpayers money.
How can you stop the banks sitting on the money ? Especially as they are now obliged to have more anyway and share holders don't want to support them.
Firstly in order to encourage confidence something will have to be done to improve the regulatory system.
If we put money in to the banks and are a major share holder then we must be honest and it should be dealt with as a temporary nationalisation of these institutions. The aim should be to loosen up the credit system and get banks lending again.
Any rescue plan should include the developing countries because that is where new consumers will come from.
Government spending should be investment to aid wealth production. It takes a long while to get capital projects started. In the short term it would be better to cut taxes to make it cheaper for firms to employ people and invest in training and capital projects. Offer support to builders to ensure projects for which there is planning permission go ahead. Build on the suggestions in the PBR to help firms in cash flow trouble. Fund the rescue scheme for those who cannot pay their mortgages.
Think of savers and shareholders - they won't invest if the terms are poor.
Encourage people to buy and use bikes and shop locally
Helen
Xmas lunch chit- chat
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