Thoughts on the Financial Stimulus

This stimulus won’t really have much effect. The growth in the past ten years is due to people borrowing figures like 20k against their rising house value to buy a new car, tv ect. Figures like a fiver or tenner a week don’t even come into the category of short change. Add in the fact that future tax increases will have to be announced so not to spook the market. People aren’t going to go out and spend if they’re heading into negative equity and are facing a tax hike in a year or two.
 
Labour having thought they’d abolished the economic cycle now think all these problems can be solved by giving people a couple of hundred quid. It’s a pathetic response and the longer they stay in denial, the worse the recession will be.

 

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