OAPs can save the economy
Saving is bad. That’s the basic reasoning behind global governments’ attempts to spend their way out of the economic crisis. The ‘paradox of thrift’ suggests that if everyone saves at once, it can be deadly for an economy – falling consumption means even lower growth. But if Gordon Brown truly believes that raising spending is the key to economic recovery, he has an odd way of showing it.
Northern Rock, our national bank, is being pushed back into the mortgage market, and others may follow suit. All the pundits are asking – will this revive the property market? Most are sensible enough to realise it won’t. But to me the more pertinent question is – why?
Why do we need more mortgage lending? How will this help the wider economy? Throwing public money at the housing market is a huge waste.
If you want to increase spending, get more cash into pensioners’ pockets.
• Read the full editor’s letter here: OAPs can save the economy