I know, let's uses taxes to re-inflate the house market

[stackpole]

I'm not an economist, or a politician, but I would have thought this is the last thing we need.

Mr Brown is planning to unveil radical policies to help "hard-working families" through the economic crisis. One plan being studied by ministers includes an ambitious scheme that would effectively bail out the slumping new home loans market with an injection of £90 billion.

Torygraph

[HairyArsedBloke]

The next nuLieBore numbskull that tells me that they are "on your side" is gonna get a

That catch phrase should get them convicted on its own.

[Cyberman]

I'm not an economist, or a politician, but I would have thought this is the last thing we need.


Torygraph

It's what Brown needs to do to turn a failing economy around before the next election in order to dupe the voters yet again. If he does nothing then New Lie are in for total humiliation in 2010.
I've always been concerned about the waste of this government though. Just curing waste would solve a lot of the country's financial problems, and I am sure that the Tories will go to town on that.
In the Times today it states that 8 Billion pounds has been overpaid through Brown's failing 'flagship' tax credits system since its inception in 2003, of which only 2.7 Billion has been recouped. That is truly scandalous and abolition must surely be a priority.

[RichardCranium]

The next nuLieBore numbskull that tells me that they are "on your side" is gonna get a

What about in the context of "on your side like a blood-sucking parasite"?

[BrilloPad]

I'm not an economist, or a politician, but I would have thought this is the last thing we need.


Torygraph

Where would they get the money from to do it?

[RichardCranium]

Where would they get the money from to do it?

Supposedly, by converting mortgages into government bonds. Which means in reality underwriting banks & building societies (which are becoming more and more foreign owned) with cut-price government bonds. Which means they can pay their share holders so their share prices remain high, despite having rubbish mortgages.

Meanwhile, the provision of the cut-price bonds will inflate the economy, i.e. cause inflation. Prices go up, wages go up to match.

Net result, much the same as the 1970s. High inflation, high unemployment but the good news is your mortgage effectively gets smaller.

At least, that's what my economics studying taught me. But since fat-belly Gordo is an economics genius, I'm sure he knows best.

[BrilloPad]

Supposedly, by converting mortgages into government bonds. Which means in reality underwriting banks & building societies (which are becoming more and more foreign owned) with cut-price government bonds. Which means they can pay their share holders so their share prices remain high, despite having rubbish mortgages.

Meanwhile, the provision of the cut-price bonds will inflate the economy, i.e. cause inflation. Prices go up, wages go up to match.

Net result, much the same as the 1970s. High inflation, high unemployment but the good news is your mortgage effectively gets smaller.

At least, that's what my economics studying taught me. But since fat-belly Gordo is an economics genius, I'm sure he knows best.

So they are not actually nationalising them then?

Well I suppose it might win Labour the election in 2010 - as long as oil prices remain stable/drop.

Of course the scenario you outlined above is the benign one - the worse one is gthat these debts are called in and the government has to raise taxes and/or goes bust! We could become like Zimbabwe!

[RichardCranium]

We could become like Zimbabwe!

What? And have a leader that wasn't elected?

That could never happen here. Just like we could never have election 'irregularities'.

[stackpole]

Net result, much the same as the 1970s. High inflation, high unemployment but the good news is your mortgage effectively gets smaller.

If mortgages effectively become smaller, won't that make them:

1. easier to get, and thus...
2. house prices are pushed up again, making them...
3. even more inflated than they are now, resulting in...
4. another desperate scheme to help people buy houses, sending us...
5. back to step 1 where mortgages are...

[RichardCranium]

If mortgages effectively become smaller, won't that make them:

1. easier to get, and thus...
2. house prices are pushed up again, making them...
3. even more inflated than they are now, resulting in...
4. another desperate scheme to help people buy houses, sending us...
5. back to step 1 where mortgages are...

The nice thing about inflation is that it raises unemployment and your pay is always behind the prices so fewer people that can get a mortgage (unemployed) and those in work can't afford to buy a house and those that can either are too depressed to want to or they just leave the country. That all prevents house prices going up too much.

See, guzzle-guts Gordo really is an economic genius.

PS I forgot to mention about the interest rates going up, didn't I? Only old mortgage debts get smaller, not repayments.