The Big DebateIf you feel the need to get your teeth stuck right into a heavy debate on a subject you feel really passionate about, then this is the place to do so. Post about religion, politics, laws and all things juicy like that here.
We’re all well aware of the financial mess Britain is now in and most of us know its effects will last for decades. We also know that there’s no point in blaming anyone but ourselves for tolerating poor political leadership in terms of regulating the financial world, bankers and ourselves for pigging out on a credit card binge over the last ten years. Alongside this, there’s also no point in blaming America. A lack of confidence in banks and property prices could have started anywhere in the world at anytime. Eventually the effects would be the same because all that’s been happening is a massive paper or electronic debt fund has been sloshing its way round the world for years.
I said openly to many people 4 years ago that our Government spending, borrowing and domestic debt was too high and it would all end in tears. The result is that now desperate situations call for desperate solutions.
This is my personal opinion of how we get out of it and avoid stitching up the next generation with poor job prospects, standards of living and lousy pension pots for their old age. It should also be noted by those in the know that history tells us clearly that industrial and civil unrest often creeps in soon after economic failure. Let’s start with saving money from our overloaded bureaucratic systems of Government and I must remind readers that this is not for the faint hearted.
Her Majesty The Queen as Head of State should remain in power for national stability and continuity reasons. She should be encouraged and advised to exercise her Royal Prerogative more robustly with her elected Government. Answer, she needs high calibre advisors, not just well meaning loyal confidants who have done an excellent job in their respective previous careers but…..are their skills fitted to future needs ?
The House of Lords, this lot need turning inside out starting with a fully elected chamber including the Lord Bishops and Law Lords. Following this, a maximum number of 50 Lords can be elected. These should consist of the majority coming from the elected Government in power and the rest from the church, legal and business community. They would also have to retire at 65, have no right to reject Parliament’s proposed legislation, only advise changes. They should also establish a ‘supreme court’ that stops legal arguments going to EU courts. This would stop almost all minority, lobby and pressure groups cherry-picking those good bits of legislation and rejecting the bits they don’t like. I think a fortune has been saved so far. Anyone got any more ideas for saving money in the House of Lords ?
Parliament; reduce the number of MPs to 3 per county maximum, 1 being the senior MP with ‘governor’ status for budgets, law and order, health care, education and infrastructure. This measure would effectively dismantle the NHS, County Councils, District Councils, Borough Councils. Unitary Authorities should replace them. I would however extend real executive and budgetary powers down to Parish Council level who are the closest to ordinary people. This would place a sharp focus on the effectiveness of local Councillors when it came to getting things done.
These measures have also got rid of several other Government Departments that are nothing more than black holes for tax payers money. A simpler way to this is possibly amalgamating most Government Departments under two headings; revenue raising and just spending departments. Result, less Ministers required in the Cabinet. Add to this MPs and Civil Servants index linked pensions, now we are talking serious savings. Any further ideas for saving money in Parliament and Central Government ?
Police, all county constabularies with under 3000 officers should be amalgamated with neighbouring constabularies. That’s saved at least a dozen Chief Constable posts, a dozen Deputy Chief Constable posts and God only knows how many Assistant Chief Constable posts. On the law and order side of things, all Chief Constables should account to the senior MP of the county. They should also be subject to election by their local community who hold the powers of recruitment and dismissal, Now watch the crime figures tumble when the bosses job is on the line ! The Mayor of London set a superb example of this when he got rid of the last commissioner – well done Boris, real democracy in action. It should be noted that terms and conditions of employment would have to be changed dramatically to make this work.
NOTE, this is NOT a cut in police services, it's a cut in their top level administration and duplication of ranks. It would free up more money for additional officers where required. For those who may not be aware, a Constable is the lowest rank and a Chief Constable is the highest.
Military, all armed services and their support units should be amalgamated into Sea, Land and Air Defence Units with a common uniform and rank structure. I would also order a review of their rank structure eg. the Army has 17 ranks from a Private to General. They should however retain their historical traditions by a recognisable insignia and continue in their existing county recruitment practices and areas. Any more ideas on saving money in the military ?
Financial Institutions, a real bunch of scallywags here. That said, love them or hate them, they are the lifeblood of any nation. They have a duty to finance future industries that produce real long term sustainable products that other people want to buy. They should not be financing large organisations such as pub chain companies. We have plenty of people with outstanding entrepreneurial skills to cover domestic hospitality needs. They may also like to examine investing in ethical industries instead of shovelling paper debt funds around the world that produce nothing real in terms of goods. Their salaries also need capping somewhere near that of a senior medical consultant. (£120.000) I say this because we the tax payer are now paying it with these Government bailouts.
Industry, these people should be freed from the worst of EU regulations immediately. If necessary, Parliament suspend or downgrade our slavish adherence to the Human Rights Act and Health and Safety legislation. However, real long term prison sentences should be put in place for those who blatantly abuse people or cause death and injury around safety matters. At present, virtually no one gets punished for all number of these offences so they’re basically ineffective whichever way it’s looked at.
Is this too radical ? I will expand on each of these main headings if anyone is interested. Has anyone got a less radical approach ? On the other hand, if you think it goes too far in certain areas, say so with your alternative ideas.
Well, as I understand it, the current crisis had one main trigger. The housing market overheated, with unscrupulous people granting crazy mortgages to people who couldn't afford them, thus creating a higher demand for houses, which drove the prices up, which made everyone think it would be OK. Of course, this was extremely fragile, and as soon as there was a minor downturn, the whole thing collapsed. This caused the people who couldn't afford the mortgages in the first place, who no longer had any equity, to just walk away, leaving the banks holding worthless paper.
When people started to learn what had been going on, they all stopped spending, and at the same time, the banks tightened up their lending standards, so the whole economy ground to a halt. Pile on the fact that the gov't had all the clues but didn't see what was happening, and you have a complete failure in the trust of the financial system, which runs on TRUST!
So the US gov't steps in and starts to spend money - borrowed money. It is possible that this will be successful. Usually gov't spending has a 5X or more leverage on the economy, and building roads and bridges is the best kind - it creates jobs all down the line. Plus the gov't works to rebuild trust in banks, by guaranteeing loans, and making bad debts disappear. They extend medical and unemployment assistance so people can survive through the tough times, and maybe it all works out.
People have compared this situation to the Depression of the 1930s. Back then, the US gov't did something similar, trying to spend the way back to growth. Unfortunately, it almost worked.
It is not clear yet whether the amount of spending and support being pushed by the various countries around the world will be enough to turn the global economy around. The problem didn't start because of gov't inefficiencies, but because people lied and cheated on a grand scale. So I don't think re-organizing the gov't is the solution. Restoring the trust in financial institutions is the best way to get it all going again.
[quote=Laz;688889]Well,
It is not clear yet whether the amount of spending and support being pushed by the various countries around the world will be enough to turn the global economy around. The problem didn't start because of gov't inefficiencies, but because people lied and cheated on a grand scale. So I don't think re-organizing the gov't is the solution. Restoring the trust in financial institutions is the best way to get it all going again.[/QUOTE
I agree with Laz, working for the UKs now biggest bank and hearing a lot of customers worried about money and about everything something needs to be done to regain peoples trust. Though this is very hard it is only going to happen i think after a long period of stability. Where as there is no news on banks being balied, retailersgoing in liquidation etc etc.
In my opinion it has done the world some good, we now realise that we must live by our means, and people are really starting to now. People are holding onto money yes but this means they are only buying things we can afford.Also if they take out a loan they should be able to repay it all. The banks have also learnt their lesson in risky lending.
The FSA should get more involved and be expanded to make sure financial services are under heavy scrutiny. I think the FSA is the key to making sure this doesnt happen again by giving them much more power and making sure they keep the consumers and the economy first. rather than banks profits.
And your plan for recovery is......? Behind what I've written is a confidence building initiative for weak sterling (£). Investers love cuts in Goverment spending and removal of restrictions where possible.
What concerns me is the government is lending out lots of money to finance banks, businesses and such and is borrowing more national debt. What happens if we can't pay back that money that the government has borrowed from elsewhere?
I wouldn't just blame America tho; we all as daft as each other when it comes to thinking we are better off than we actually are.
What concerns me is the government is lending out lots of money to finance banks, businesses and such and is borrowing more national debt. What happens if we can't pay back that money that the government has borrowed from elsewhere?
I wouldn't just blame America tho; we all as daft as each other when it comes to thinking we are better off than we actually are.
Correct. The answer is, we've ruined opportunities for future generations. Hence my drastic plans for cutting public expenditure now in order that we offset the worst effects of what you're correctly pointing to. In short, I'm suggesting we 'lay-off' this gamble by covering our own buts in the future. After all, big cuts now can always be put back in by future generations and they may even thank us !!!
Actually the trick is much more difficult - during recessions, gov'ts need to spend more money to recover and stabilize, incurring debt. During good times, they need to cut back in both real money and as a percentage, and pay down the debt. But during good times, most people can afford their taxes, and the elected officials keep spending to "buy" our votes. Cutting back spending when you have lots of money is very difficult for everyone.
Note that having zero gov't debt can be a problem, as it removes the central bank's ability to steer the markets.
Actually the trick is much more difficult - during recessions, gov'ts need to spend more money to recover and stabilize, incurring debt. During good times, they need to cut back in both real money and as a percentage, and pay down the debt. But during good times, most people can afford their taxes, and the elected officials keep spending to "buy" our votes. Cutting back spending when you have lots of money is very difficult for everyone.
Note that having zero gov't debt can be a problem, as it removes the central bank's ability to steer the markets.
Too late, the money was spent (and more) in the good times. Anyway, we know it's daft to try and spend our way out of recession, 2 Chancellors have tried that ie. James Callaghan, (60s) and Dennis Healy (70s) It's no coincidence that both were Labour politicians who never could manage a 'current account'. Sorry, it's still looking like massive Gov'nt spending cuts to me. At least my wacky plan should not affect main services, just top jobs. As a footnote and in all fairness, one other Chancellor made a pigs ear of public finances - Anthony Barber and he was a Conservative !
There will never be a stable recovered economic society in the future in my opinion, this recession is simply a tiny piece of a gigantic jigsaw, a jigsaw that is seeing the human race slide closer and closer to economic and ecological disaster.
Humans are consistantly breeding at a far faster rate than any economy can comfortably deal with, while using more resources than the rock we call Earth can cope with.
Until human levels of occupation on this planet are culled back seriously to a managable level, be it by war, environment, disease or whatever, things will only ever go in one direction and it's not a good one.
It's a fairly known fact that humans are our own worst enemy and that as a species we are in so many cases incapable of thinking before taking action and that together with being greedy and a having no apparent ability to live without automatically acting upon a variety of other destructive traits, it basically tells it's own story and it's not one accompanied by pretty pictures.
We may well fix the banks and help out poor performing businesses and stop them from going insolvent for a while, we may eventually force the government to take sensible actions, while stopping the worlds financially loaded idiots from abusing money the way they always have, but it won't help... When a global community refuses to take any responsibility for issues such as global warming, pollution, food shortages, disease and a whole range of other issues that are far more important than money, they will never be able to work together to overcome issues such as finance and business, where one individuals loss generally leads to another individuals gain, greed will always get in the way.
I think blaming a huge group of people such as "ourselves" or "society" or even "America" is a bit of a dead end in terms of finding a solution, we have little choice mostly, unfortunately there is little option to "tolerating poor political leadership", other than some sort of public demonstration which although is better than nothing is at best a slow process. the voting booth the only other choice really gives no great option either as its hard to tell which choice is going to do better.
although we each have personal choices as to what we do with our money individually it makes little difference overall and although collectively we could theoretically make a big difference that way, our choices are limited to what big business lets us have and the market forces on things such as house prices.
it seems to me a lot of it is down to greed at the high level of commercial institutions and protected monopolies. I saw briefly on the news one financial institution that was bailed out with so many billions was still buying a $50M executive jet lol !
personally I don't think we should of bailed out these financial institutions, let them all fail I say, it weeds out the week ones, and gives a warning to not run a business in such a way again, then pick up the pieces if necessary, bailing them out just makes it far more likely the same or worse will happen again.
if the government should give any money then it should get something back, for example, compulsory buy of cheap repossessed homes and renting them back to the very same people who are subsequently left homeless.
I also think the mass exodus of labor abroad has to be the biggest single contributing factor.
we live in what is effectively a chaotic system, no one can see the whole picture, no one can have a sufficient influence without severe sacrifices to themselves. total world control may seem one option but if you look at Russia's attempt to control its own economy in that way it shows how hard it is to get right, and how easy it is to get wrong.
also, unfortunately, the big industries have a far too great influence on political direction, certainly in the USA which has the biggest global influence.
Interesting that many of you see the current situation as the result of long-term system failures (population, corporate greed, etc), and not mostly due to recent events. Did you feel this way three years ago?
Capitalism has always been self-correcting. Short-term problems are balanced by long term growth and stabillity. While I acknowledge that our leaders continue to ignore and learn from past failures, I expect that this recession will turn around fairly soon (9-18 months), and a new cycle of growth will begin.
And don't forget that our best and brightest don't go into government - would you? I wouldn't.
Interesting that many of you see the current situation as the result of long-term system failures (population, corporate greed, etc), and not mostly due to recent events. Did you feel this way three years ago?
Capitalism has always been self-correcting. Short-term problems are balanced by long term growth and stabillity. While I acknowledge that our leaders continue to ignore and learn from past failures, I expect that this recession will turn around fairly soon (9-18 months), and a new cycle of growth will begin.
And don't forget that our best and brightest don't go into government - would you? I wouldn't.
Yes, I warned friends and colleagues about 4 years ago. Some listend, some didn't. Capitalism is only self correcting when the downturn is short term or huge Government long term debt is the outcome. NB We have the latter. When that downrurn is dangerously long, civil unrest is almost always the result. We are no different to anyone else in this respect. We just like to think we are.
Your mention of 'Leaders' is highly relevant, have we had one since Margaret Thatcher ? I appreciate your optimism for a turnround in 18 months, the CBI have a somewhat different view.
Sorry, I have to get back on my old hobby horse, massive cuts and re-organisation in Gov'nt. This in my opinion would be good for the population as they would see real efforts being made to offset the worst effects of these huge debts on future generations.
As you've all probably gathered, I've little interest in the history or mechanisms of this financial debacle but I am interested in its effects on future generations. Put simply, I'm only a 'caretaker' on earth.
I think that a nationalised bank should be set up to buy the toxic debts from main banks since its the toxic debts which are stopping banks lending to each other which in turn is stopping them lending to the public.
There would of course have to be heavy controls in place to ensure that these debts were independantly valued before they were bought by the nationalised bank to prevent the other banks fraudulently selling their worst debts only and leaving the Government holding the mortgages most likly to be defaulted on.
Another option would be to get the housing markets moving again by having councils buying some houses that are being repossesed and then renting them to the previous owners (since otherwise the houses would sit empty and the previous owners would likly have to be rehoused by the council) as meow suggested, but again there would need to be controls in place to stop banks rushing into reposessions on the basis that they would get the value of the home from the Govenment anyway. These homes could then be resold for a small profit once the economy recovered.
I think that a nationalised bank should be set up to buy the toxic debts from main banks since its the toxic debts which are stopping banks lending to each other which in turn is stopping them lending to the public.
There would of course have to be heavy controls in place to ensure that these debts were independantly valued before they were bought by the nationalised bank to prevent the other banks fraudulently selling their worst debts only and leaving the Government holding the mortgages most likly to be defaulted on.
Another option would be to get the housing markets moving again by having councils buying some houses that are being repossesed and then renting them to the previous owners (since otherwise the houses would sit empty and the previous owners would likly have to be rehoused by the council) as meow suggested, but again there would need to be controls in place to stop banks rushing into reposessions on the basis that they would get the value of the home from the Govenment anyway. These homes could then be resold for a small profit once the economy recovered.
A fair point but nobody knows the value of the toxic debt. The other problem is that it would further add to the already breathtaking long term debt of £1.5 Trillian ! I doubt if any Government would want to answer for that in 5 years time ! Additional to this is the ordinary 'Jo Public's' view that this is yet again something else that's been done TO him and not something that's been done FOR him. Sorry, I stick with my view of the need to seriously cut the size of our national administration.
Correct, it's a huge ammount of money that will survive as a national debt for at least a whole generation. This is the reason I'm proposing massive cuts and reorganisation of our national institutions. At least the public would see some real effort from those who helped create this mess through pure incompetence and greed. Where will these people be in the next generation ? Dead, House of Lords or comfortably retired on huge pensions whilst the next generation are left to pick up the bill. As an aside, does anyone actually know how to write in figures £1.5 Trillian ? It baffled me completely.
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