Credit Crunch

From what I can gather from the media, the billions of pounds the government has made available to the banks has mostly been used to recover their own financial positions.  Anyway, the downturn came from excessive and frivolous lending so it seems odd that ministers should be howling for these institutions to be lending at the same rate as last year.  Surely that is likely to make matters worse rather than lessen the recession.

I appear not to be alone in this as the BBC reported that the German finance minister. Peer Steinbeck, is saying much the same thing.  A previous government minister once famously said  “When you are in a hole, stop digging”.  Furthermore Peter Oborne of the Mail Online has a detailed analysis of my point.

Clearly the strategy is not working.  Money is as tight as ever and well-known firms are in real trouble and some are going bankrupt.  Surely it would be wise to try something or anything else quickly before things get even worse.  For instnce it would not appear too unreasonable to pour the money into public works rather than to shore up the banks who are prime suspects for causing the mess in the first place.  Capital investment in social housing, renewing school buildings,  etc., at least provides work and there is something to show for it at the end of the day.  This kind of investment need not take years of planning before anything happens.


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About robthill

I am semi-retired ICT Staff Tutor in Dundee, Scotland and an online facilitator. The views here expressed are my own somewhat quirky feelings about the world as I see it, no doubt just as prejudiced as most other bloggers.

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