Saturday, March 28, 2009

Getting rid of the recession

Getting rid of the recession

Having a chat with local folks in my area I put an idea to them. If the government, instead of providing nearly £200 billion pounds to the banks, gave every adult citizen (lets just say 56-million adults in the UK) one million pounds in their bank account or open a bank account in which to put the money, we discussed and concluded:

a) this would substantially reduce any borrowing (if at all) from the IMF etc
b) would reduce heavy taxation on future generations
c) people would clear their debts
d) there would be no unemployment benefit (for 3 years)
e) people would start buying again thus rejuvernate the ecomony
f) recession would be removed or reduced within a relatively short period of time
g) people can save thus leaving deposits at a good level in the banking stream
h) employment conditions would improve
i) business could once again borrow from the bank at fair rates
j) inflation would 'appear' to be less detrimental (we think)
k) wage rises would be put on hold (2-years)
l) there would be the need for everyone no matter how money-wise or investment talented they are or not to receive basic guidance on how to use money properly
n) contrary to propaganda it appears that most people would and desired to continue to work for a living
m) etc
n) etc
That this instant monetary injection it would substantially benefit the ecomony immediately and the above measures and more could see a return in the UK to a balanced economy very quickly indeed. Moreover, paying £1 million pounds to each citizen is far cheaper than paying the banks or shoring up their debts - which has demonstrated that the Government offer to the banks todate hasn't worked and there has been no benefit to the British people overall.
And if you look it from the advantageous person's point of view on this idea - what a GENERAL ELECTION winner !!


As an update: remember this is just an idea and should be treated with fun, to be played with. For instance, once you realise the maths don't stack up and that £100,000.00 per person maybe more of a realistic figure per adult then the idea provides a useful template to look at where are finanical burdens are too excessive and need to be transformed to kick-start the economy. For instance, removing benefits for 3 years will mean those who receive them could have £100K upfront (maybe) so that they can use that money to focus the direction of their lives. Some people complain they do not like the idea of giving away money? And how many have made their voices heard about nearly £20-billion in combined benefits per annum? Surely, a gift incentive in advance and putting Benefits on temporary hold for 3 years might work. It is merely requires a state of mind and re-assignment of a national debt that is going to happen anyway.

£100K could, for example, remove most peoples debts or arrears (credit cards and bank loans, maybe even mortgage) so this is another area to look more closely. Ths would reintroduce liquidity into the marketplace. The opposite side of the coin for those who have no debt could mean they are £100K better off. The banks would receive money, thus bring a positive balance to their books and with savings increasing, deposits into the banking stream would improve dramatically. This would mean that the banks wouldn't be out of the woods entirely with some of their toxic debts, but would be in a better position to manage their way out of it without enforced changes and high regulation, which some seem to feel would be detrimental to capitalism as a whole.

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