The Last Ditch by Tom Paine

THE LAST DITCH

The sheep and the wolves

Published by Tom

on

Link: Gordon Brown hails £500 billion bank rescue plan – Telegraph.

CashI am no economist, so perhaps a reader can help with the questions I have today. If people are unwilling to lend, how does reducing interest rates help?

If our problem is that too many have borrowed too much, why are we trying to stimulate them into borrowing more?

If people (or local authorities) have chosen to deposit money with high-interest internet banks in obscure nations, why should taxpayers bail them out (paying them the high interest accumulated up to the point of default)?

Finally, how can one justify taking money (estimates vary between £1,000 and £10,000) from each and every person (actually much more than that from the more limited number of net taxpayers) to prop up private institutions which have miscalculated business risks? Yes, the taxpayers will obtain shares in the banks, but if they had wanted such shares, they could have bought them. Oddly enough, they haven’t chosen to do so. It may differ legally, but does government taking their money by force for the banks differ morally from the bankers holding them up at gunpoint?

It seems our democracy really is just two wolves and a sheep voting on what is for dinner. Prudent debt-free British "sheep" must be eyeing the debt-laden wolves very nervously today. Now they know our democracy entitles them to do this, why would they ever stop?

5 responses to “The sheep and the wolves”

  1. Tony Sharp Avatar
    Tony Sharp

    All these questions should have been asked and answered in the House today. But it seems everyone is so desperate to appear supportive in the national interest they are forgetting to do their job of holding the government to account.

    Like

    Reply
  2. Marksany Avatar
    Marksany

    As well as lenders not lending, borrowers no longer want to borrow.
    Individuals are realising they cannot afford to borrow more and more, and they are worried their job is at risk. Businesses are preparing for recession and aren’t looking to increase costs and risk at a time when orders are drying up.
    0.5% is not going to make a fraction of a jot of difference to the recession that is coming. At the moment the tide has rushed out unexpectedly, the tsunami is on inexorably on its way.

    Like

    Reply
  3. Guthrum Avatar
    Guthrum

    This is pointless, we have just zipped back five hundred years to the age of the robber barons and serfs. So much for the party of the people, and that idiot who leads the Conservative Party

    Like

    Reply
  4. Tom Carder Avatar
    Tom Carder

    Betrayed Again
    M8*

    Like

    Reply
  5. PookieBadMuffin Avatar
    PookieBadMuffin

    So glad to see someone else writing what I’m thinking! This situation is infuriating. Meanwhile, as they lower interest rates to get people to borrow more (?!), those like me who live debt-free and sock away savings have our earning interest rate reduced to something that can’t even beat inflation.
    It’s bizarre.

    Like

    Reply

Leave a reply to Tony Sharp Cancel reply

Your blogger

Tom is a retired international lawyer. He was a partner in a City of London law firm and spent almost twenty years abroad serving clients from all over the world.

Returning to London on retirement in 2011, he was dismayed to discover how much liberty had been lost in the UK while he was away.

He’s a classical liberal (libertarian, if you must) who, like his illustrious namesake, considers that

“…government even in its best state is but a necessary evil; in its worst state an intolerable one.”

Socials
    Subscribe

    Receive content by email

    Latest comments
    1. Lord T's avatar
    2. tom.paine's avatar
    3. Lord T's avatar
    4. tom.paine's avatar
    5. Lord T's avatar
    Recent posts