A Christmas present for the economy - Why not just give away £75 billion?
There was a brilliant article by Simon Jenkins in the Evening Standard. He picked up on a theme which I mentioned previously. The Government offered another £75 billion of quantitative easing (which in English means printing money and/or giving money to the banks). I pointed out that the big problem for the economy is confidence.
Simon touched on the idea - why not do a scrappage scheme for household durables? But we wanted to develop this idea further: why restrict it to household durables - why not allocate it to all products ‘made in Britain’. This will ensure the money will go straight into the economy, benefit UK consumers, benefit UK retailers, benefit UK manufactures and not benefit the banks. Many sectors will enjoy increased turnover, which means the government will recover much of the outlay – just think about VAT and income tax etc. - the costs will end up to be much lower than the initial £75 Billion. Consumers, Retailers and Manufacturers will feel more confident, they will employ staff, and they will invest and so on. Even the banks will then benefit. It is about restoring confidence in the British Economy and assisting businesses from the bottom - up.
Giving £75 billion to the general public to spend in the economy appears to be a much better way than giving £75 billion to bankers.