December 21, 2008

Governing for the governors

The government has thrown billions at the banks, it is probably going to throw billions at an Indian owned car firm. Yet when it comes to individuals the Government seeks to act like a loan shark preying on the most vulnerable and offering small loans with massive interest levels. There is no moral hazard throwing money at the giant corporations, yet individuals that come into hard times need to be stung with punitive rates. However these people can be counted on to give their support to Labour anyway so their interests are irrelevant to the government.

The on the topic of debt the IMF may consider it the only option in order to try and keep the economy, an economy hooked on government spending, going but there is a problem with where the money raised from all this debt is going. Some of it went on the pointless VAT cut, a cut which will only help retailers and then only if they are big enough (like that owned by Labour donor Lord Sainsbury) so that the savings offset the administration costs of implementing it. Some of which will be going on things like the £1,755 a week rent of a three-storey property is in Kensington for a mother and her four children. Some of this money will go on infrastructure projects the government thinks vital, like the ID Cards database. Some will simply go into the whitehall machinery and be ground to dust, but all of this money will eventually have to be paid off somehow by the people of the UK.

Paying off Labour's debts could come through more taxes, or by inflating it away through printing money (as the USA is already doing) and therefore causing peoples savings to evaporate at the same time. The recession is going to get pretty bad[3] and affect Labour marginals the most. This is why Labour is so scared of it and so willing to throw however much of other people's money as is needed at it.

None of this should be surprising. It is simply this government governing in the way that all governments do. That is governing in the interests of the government.


Post a Comment

<< Home