Quote:
Originally Posted by ntluser
I always find it amazing that governments always try to borrow their way out of a crisis.
Imagine the situation.You wake up one morning to find that you've lost your job, have £50,000 worth of debts and the country's in recession.For some people, sadly, this may be true.
Anyone in their right mind would surely be looking at ways to cut their unnecessary expenditure and maximise their income.
They would prioritise their debts and come up with a plan to pay off the debts gradually ensuring that high prority debts e.g. mortgage etc are paid first. In some cases you may negotiate a deal with your creditors.
Hopefully over a period of time you would get to a situation where you could live easily within your means.
The last thing you would do would be to incur more debt by borrowing.
Isn't this one of the reasons the country is in the mess it's in?
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that example isn't quite the same as an individual e.g. if this one person borrowed £10,000 and went out and bought a mini in order to help save the motor industry it would make sod all difference.
but if we ALL borrowed £10,000 each and bought a new car or put a deposit on a house or bought a speed boat - whatever - we'd stimulate the economy - the problem is it'd be a false boom. a bit like those people who say in order to avoid a hang over - keep drinking! it's true but eventually you have to face the music and sober up/pay off the debts.