Monday, December 29, 2008

Spending out way out of the Recession

I have been mulling over for some time, the governments idea for getting the country out of the recession. I can see how spending money will benefit business but surely it will only get people into more financial trouble, which is surely why we are in this recession in the first place. I do not think that the recession is a big problem, if it can get people to borrow less money, pay back a bit of debt and then slowly start spending again, then surely we will all have learned a valuable lesson. Yes, businesses will suffer but the strongest and most determined will survive.

3 comments:

Daniel Jones said...

Yes I have thought about this as well and doesn't sound right to me, if people haven't got money then they would need to borrow in order to spend the money which is the cause of the credit crunch.

I think the likes of the mjor retailers are only suffering due to the fact they have never really had any competition and with the growth of the internet they are losing their sales that they made in years before

Rachel said...

What a good point, I had never really thought of online retailers being a problem for the shops but I expect you are right.

The Credit Cruncher said...

There is definitely an impact by internet retailers as their overheads are much lower - high street shops are very expensive...
The trouble is that the less we spend the more protracted the recession becomes and more jobs are lost - as you say, this is just a re-adjustment which is needed, but governments don't like the way it looks when jobs are lost. It does nothing for getting them re-elected and they will spend billions in a vain attempt to stop this natural re-adjustment. After all the main aim of government is to get re-elected NOT to keep the balance books on an even keel...
(too cynical?? or just realistic?)