The Credit Crunch: US vs. UK responses

[nass]

I was just wondering about the difference between the responses from the UK and US government. What has the US done right that the UK hasn't done?

What gets to me is that on the surface, the US has a far bigger problem, yet the Republicans seem to be holding their own in the polls, regardless of "it's the economy, stupid". So people don't seem to be blaming the Republicans. Yet in the UK it seems fairly obvious to me that Labour is going to get prettymuch annhialated in any general election, and people do seem to be blaming Brown.

 

[Cornish Steve]

It's all about confidence. Consumer confidence drives the economy more than anything else. When government leaders so nothing but moan and complain, consumers become increasingly pessimistic and don't spend. When government leaders exude confidence and optimism, consumers begin to spend again. Plus, the US government gave everyone a tax refund to spark the economy, and it worked.

This is the difference.

 

[Delboy]

what has brown and his minions done? ...

a stamp duty holiday? big whoop. this helps me how? oh it don't, now removing some duty on normal goods would help, or a tax rebate would all help a fair bit, or him saying ok we buggered it up, we are going to have an election....

 

[DuaneJackson]

I read something over the weekend that called the US response a bazooka in comparision to Browns peashooter.

When government leaders exude confidence and optimism, consumers begin to spend again.

I think Mr Darling may have missed that memo.

For the short term, the US response seems more effective. I'm not so sure about the long term though. I find the whole "moral hazard" thing interesting.

I don't think I'm a market purist, but I don't think the amount of interference we have in the housing market at the moment is a good thing. It's artifically propping it up.

 

[Effluxinc]

I feel a little sorry for brown...it seems to me that he came in at a rough time and it must be a hard job to take on...but I don't really know that much about all this stuff to be able to really make a proper comment.

 

[JonathonV]

The Republicans did one major thing of course-the tax credit of $300 per person and $1200 for a married couple. That I'm sure won them a lot of points where as all Brown did was refuse a fuel credit.

 

[LINGsCARS]

I get dissapointed at every interest group calling for windfall taxes, tax rebates, wage rises, subsidies, "one off" payments etc.

Absolutely should not happen.

Of course there should be safety nets for people genuinely in need, but... if it means spending less and having houses worth less then that needs to happen.

To do all this subsidy just prolongs the pain. Really, the UK Government doing little is quite good. Overreaction is bad.

Everyone needs to try harder in business, get fitter, borrow and overextend less. Need to stop spending to the edge and build up a safety net so business is able to survive for 1 -year without income. This is not a popular suggestion, and one motor trade pal always laughed at me for having "totally wasted" money sitting in the bank, and paying all my VAT instead of going for a big reclaim, "interest free loan" he called it. But he is not laughing now.

My opinion: personal debt needs to reduce. Currently 50% of finance apps for my cars are being declined, which is a GOOD THING if the people cannot really afford the cars. My worry is what people do then to acquire a car like sub-prime loans (terrible things, often secured). When I go to supermarket, I see loads of people spending on rubbish food and stuff you can make easily.

Need to be sensible. This country is over-relying on consumer debt.

 

[JonM]

Maybe because we in the UK have become used to good times. Now we are going through a rough patch a lot of people are having a whinge and looking for someone to blame. I don't want to denigrate people who have lost their jobs (or underestimate the problems they are facing) but there are still over 500,000 vacancies, with more to come as fewer people from East Europe come here.

Totally agree with Lings - people need to work harder, keep learning new skills, put some money away for a rainy day, and be sensible with regard to their personal debt. It's not up to the government to sort your life out!

By the way, it would be lovely if the government would give us all some extra cash as mentioned above - but perhaps we should consider what will happen to inflation if they do?

 

[telemax]

I was just wondering about the difference between the responses from the UK and US government. What has the US done right that the UK hasn't done?

What gets to me is that on the surface, the US has a far bigger problem, yet the Republicans seem to be holding their own in the polls, regardless of "it's the economy, stupid". So people don't seem to be blaming the Republicans. Yet in the UK it seems fairly obvious to me that Labour is going to get prettymuch annhialated in any general election, and people do seem to be blaming Brown.

It just works differently over there, the personality and background of the candidate seems to matter much more than their party's policies.

It's the same here in Canada but not as bad as the US, you probably wouldn't know it in the UK but we are 3 days into an election campaign and its getting really personal already.

In fact no one is really talking about policy they are just attacking the other candidates. Pretty sad really