Saving For a Space Ship Posted July 16, 2020 Share Posted July 16, 2020 (edited) Banks propose student loan-style scheme for struggling UK businesses https://www.theguardian.com/business/2020/jul/16/banks-propose-student-loan-style-scheme-for-struggling-uk-businesses Quote Up to three million jobs and more than 750,000 small and medium-sized businesses are at risk if companies cannot defer repayment on government-guaranteed loans. The banking lobby group TheCityUK has said recapitalisation of these loans is “essential” to protect SMEs, and businesses will need help tackling debt which could “hold them back or drag them under”. Their report calls for the creation of a new student loans-style scheme, where businesses could convert unmanageable loans into means-tested tax liabilities. The government has guaranteed nearly £43bn in loans to businesses across the country, with the Treasury digging deep to help a faltering economy hit by the coronavirus crisis.,,, Edited July 16, 2020 by Saving For a Space Ship Quote Link to comment Share on other sites More sharing options...
winkie Posted July 16, 2020 Share Posted July 16, 2020 The debt will not be repaid.......only hope inflation will errode it over many generations, debt generally dies with you, you do not pass it on to another....if a LTD can walk away what is stopping a person that has not promised to pay but has all good intentions.....best to pay it, but many can't and many won't. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted July 16, 2020 Share Posted July 16, 2020 5 minutes ago, winkie said: The debt will not be repaid.......only hope inflation will errode it over many generations, debt generally dies with you, you do not pass it on to another....if a LTD can walk away what is stopping a person that has not promised to pay but has all good intentions.....best to pay it, but many can't and many won't. Student loans survive bankruptcy, so presumably there needs to be a personal guarantee here for them to be similar. Quote Link to comment Share on other sites More sharing options...
winkie Posted July 16, 2020 Share Posted July 16, 2020 13 minutes ago, Mikhail Liebenstein said: Student loans survive bankruptcy, so presumably there needs to be a personal guarantee here for them to be similar. Might make it more saleable when they bundle it up to sell it on for pennies in the pound. Quote Link to comment Share on other sites More sharing options...
doomed Posted July 16, 2020 Share Posted July 16, 2020 How about struggling businesses are allowed to go out of business so new ones can be given a chance? Quote Link to comment Share on other sites More sharing options...
dugsbody Posted July 16, 2020 Share Posted July 16, 2020 (edited) 2 minutes ago, doomed said: How about struggling businesses are allowed to go out of business so new ones can be given a chance? Because letting one of the balls fall out the air might bring the whole thing crashing down. The system is a monster. (and yes, your question was rhetorical) Edited July 16, 2020 by dugsbody Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted July 16, 2020 Author Share Posted July 16, 2020 2 hours ago, Mikhail Liebenstein said: Student loans survive bankruptcy, so presumably there needs to be a personal guarantee here for them to be similar. survive bankruptcy yes, but student loans are written off at 60 yrs of age I believe Quote Link to comment Share on other sites More sharing options...
satsuma Posted July 17, 2020 Share Posted July 17, 2020 The whole ethos of society needs to be looked at, these loans were doled out with no checks and now there is a debate about making them soft. I do think there needs to be a change to where people are accountable. If on the other hand it was always intended to be helicopter money then fine Quote Link to comment Share on other sites More sharing options...
erat_forte Posted July 17, 2020 Share Posted July 17, 2020 In David Graeber's book "Debt" he talks about big millennia-long cycles of "commodity money" and "debt money" He suggests that coming off the gold standard was part of a big epoch-change into a debt money system. I guess there's lots of implications of that which he didn't really explore in detail But if we really are moving into a debt-money period for the next few centuries or more than all kinds of things will be "normal" that weren't before. Perhaps this is just a part of that. The old models of what debt and repayment mean, are based on a commodity money mindset. Quote Link to comment Share on other sites More sharing options...
doomed Posted July 17, 2020 Share Posted July 17, 2020 37 minutes ago, erat_forte said: In David Graeber's book "Debt" he talks about big millennia-long cycles of "commodity money" and "debt money" He suggests that coming off the gold standard was part of a big epoch-change into a debt money system. I guess there's lots of implications of that which he didn't really explore in detail But if we really are moving into a debt-money period for the next few centuries or more than all kinds of things will be "normal" that weren't before. Perhaps this is just a part of that. The old models of what debt and repayment mean, are based on a commodity money mindset. I would imagine a debt based system would not be able to last a few centuries. We seem to be approaching the end game now in my opinion; it does not seem possible to me that money will not be a scarce asset within the next 20 years. Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 17, 2020 Share Posted July 17, 2020 Nurse! Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 17, 2020 Share Posted July 17, 2020 Yay! Communism! Quote Link to comment Share on other sites More sharing options...
Gigantic Purple Slug Posted July 17, 2020 Share Posted July 17, 2020 I'm pretty sure absolutely no one on here would have predicted this would happen. Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 17, 2020 Share Posted July 17, 2020 1 hour ago, Gigantic Purple Slug said: I'm pretty sure absolutely no one on here would have predicted this would happen. You mean the bank of England pressuring and persuading banks to lend easily and with limited diligence, and then for it to all go pear shaped and the banks ask to bail out their bad loans? Quote Link to comment Share on other sites More sharing options...
Odysseus Posted July 17, 2020 Share Posted July 17, 2020 52 minutes ago, Si1 said: You mean the bank of England pressuring and persuading banks to lend easily and with limited diligence, and then for it to all go pear shaped and the banks ask to bail out their bad loans? The banks weren’t particularly pressured. The loans are 100% underwritten by the state. It’s basically free money for the banks as there is no risk hence no credit checks, business viability requirements etc. The whole thing was a joke. If the government underwrote 95% of the loan the banks would not have lent a penny. Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 17, 2020 Share Posted July 17, 2020 23 minutes ago, Odysseus said: The banks weren’t particularly pressured. The loans are 100% underwritten by the state. It’s basically free money for the banks as there is no risk hence no credit checks, business viability requirements etc. The whole thing was a joke. If the government underwrote 95% of the loan the banks would not have lent a penny. I'm talking about the last 5 years of QE etc. But that too. Quote Link to comment Share on other sites More sharing options...
Glental Posted July 17, 2020 Share Posted July 17, 2020 I can only imagine the tricks they will be playing to hide debt Quote Link to comment Share on other sites More sharing options...
captainb Posted July 17, 2020 Share Posted July 17, 2020 All those fraudsters who bought supercars etc with their bounce back loans can sleep even safer tonight. No perosnal guarentee, no checks, banks have no interest in chasing and hey ho.. That student loan debt can sit in a shell forever Quote Link to comment Share on other sites More sharing options...
HovelinHove Posted July 17, 2020 Share Posted July 17, 2020 So if business loans, why not mortgage debt? Basically global governments will shaft anyone who is prudent for the sake of those who are feckless or incompetent. Quote Link to comment Share on other sites More sharing options...
erat_forte Posted July 18, 2020 Share Posted July 18, 2020 22 hours ago, doomed said: I would imagine a debt based system would not be able to last a few centuries. We seem to be approaching the end game now in my opinion; it does not seem possible to me that money will not be a scarce asset within the next 20 years. Check out Graeber's book, it's worth reading. From p.214: Credit money systems from c.3500BC-800BC, then from 600AD-1450AD. And the implication is the next millennia or two from 1971-??? is the next credit money system. And yes a revealing comment "a scarce asset". Its precisely when commodity money becomes "a scarce asset" that debt money takes over. The "end game" is already past, commodity money has become a quaint irrelevance. You can't run out of debt! It's not possible! See this thread for an example! Quote Link to comment Share on other sites More sharing options...
doomed Posted July 18, 2020 Share Posted July 18, 2020 2 hours ago, erat_forte said: Check out Graeber's book, it's worth reading. From p.214: Credit money systems from c.3500BC-800BC, then from 600AD-1450AD. And the implication is the next millennia or two from 1971-??? is the next credit money system. And yes a revealing comment "a scarce asset". Its precisely when commodity money becomes "a scarce asset" that debt money takes over. The "end game" is already past, commodity money has become a quaint irrelevance. You can't run out of debt! It's not possible! See this thread for an example! I will get the book as I have managed to convince myself that QE to infinity will not be sustainable even in the short term. Quote Link to comment Share on other sites More sharing options...
longgone Posted July 18, 2020 Share Posted July 18, 2020 they could massage the economy by giving every premium bond holder with 50k holdings a million pound win every six months. but only pre covid bought that would stimulate for sure. Quote Link to comment Share on other sites More sharing options...
Bluestone59 Posted July 18, 2020 Share Posted July 18, 2020 On 16/07/2020 at 09:47, doomed said: How about struggling businesses are allowed to go out of business so new ones can be given a chance? The most obvious answer is usually the right one! Quote Link to comment Share on other sites More sharing options...
Bluestone59 Posted July 18, 2020 Share Posted July 18, 2020 16 hours ago, HovelinHove said: So if business loans, why not mortgage debt? Basically global governments will shaft anyone who is prudent for the sake of those who are feckless or incompetent. It's worse for me. I was feckless and incompetent when it didn't really pay to do so. Now it's become an art form I've found meantime I've become prudent because I had to as I couldn't stand the stress. Quote Link to comment Share on other sites More sharing options...
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