The revolutionary government will allow the bank of England rate to rise by up to 0.5% per month for the first year if market conditions require such an increase. Artificially low interest rates for the banks are a major cause of economic bubbles. Quantitive easing is another. Payday loan for you 4000 % or more, loan to a bank 1% or less. The Revolutionary government policy of 6% for banks and an absolute maximum for you of 26% is, apparently, truely revolutionary. The maximum rate for paying of you credit card will be 1% per month, around 13%. It will be the lenders job to check your ability to repay any loan, and this will be retrospective. If they should have reasonably known that you would be unable to pay the loan, when they gave it to you, and you have made reasonable efforts to pay, then the amount you owe will be fixed as though the rate was always 13%, the rest will be written off by the loan company.
So what is the Economic theory?
Wholesale Interest rates should lead to a balance of savings and loans, and stability of the currency. Usuary should be illegal. The solution to unemployment in the longer term is to be found by providing stable conditions for industry, reasonable levels of taxation on industry and workers, savings to be encouraged and loans to be directed to productive use and not to speculation.
The great shame is that banks can no longer be trusted to give good advice. Power tends to corrupt, but the power to make money simply by tapping figuers onto a computer screen is an irrisistable temptation. The great fear polititians have is high unemployment, and they are led to believe that increasing money supply will create unemployment. To make money the banks must lend money first, this results in people being slaves to their bosses, because they must have money to pay their debt to the bank so that their credit card will work to pay for food. Then having stocked up with cash, the banks withdraw the credit, and prices of houses and shares fall, so now they or their friends can buy houses and busineses cheap, or indeed, simply repossess them. They also demande aid from the workers because otherwise they won’t be able to give savers back their money.
The revolutionary government policy will be to provide alternatives, and leave banks to shrink in size and power. The initial shock may lead to a rise in unemployment but the railway project and many other measures will create employment. The key to long term steady employment, paying wages high enough to live on, is stability, and sound money. Interest rates should be fixed by market forces depending on the supply and demand of savings and credit. In the 1950s most workers made goods or provided services that they wanted to buy, and a man’s wage could keep a family, now it takes 2 wages to keep a family.
Right of consumers to give up a credit or store card. The issuer of the card must give a month with no interest and no payment due, and then the interest is to be reduced to 1% per month. The issuer of the card is to refund any default charges over the last 2 years and capitalise any arrears. The issuer must offer a debit card as replacement.
No new credit (as opposed to debit) cards to be issued, and no credit limits to be increased on existing cards.
Most of us have used credit cards, and paid the extortionate interest from time to time, and maybe even the default charges. Credit can be useful, but charges for credit can be a disaster. I’ve already made one change, so that if you don’t pay by card, you will save money at the shop. Next, interest rates need to be limited, as they were in England in the past, and indeed, as they still are in France. The very maximum allowed here is 20,56%. The highest rate for a loan secured on property is 6,48%, (for a bridging loan). Even Bank on Dave charges nearly 30% in some cases, but loans with rates of over 4000% are advertised on TV in the UK. The maximum rate should be 20% above the bank of Enland rate.
It is very difficult to get rid of a credit card, because once you’ve paid this months instalment you don’t have actual money left to buy groceries, so you need to use your card. This limits your choice. You can’t buy off anyone who doesn’t take card. So this is the proposition. If you give up your credit or store card, the issuer of the card must give you a month with no interest and no payment due, and then the interest will be reduced to 1% per month. You will pay at least 3% (1% interest and 2% off what you owe). The lender will refund any default charges over the last 2 years and capitalise any arrears. After a year you payments will stay at the same level per month so that the balance is paid off in about 4 years. The issuer of the card must offer you a card which is debited in full immediately, or once a month. He may charge a fee of up to £25 a year + 0,75% on debits, for this, but no other fees or interest to you or the shop.
Although it was inconvenient to us, because I didn’t know, I was very pleased to see that many restaurants and cafés wouldn’t take payment by card. This included the restaurant in the Geneva beach complex. So cash was needed, but, I hope, less of it because the cafés wouldn’t have to pay bank commission.
It is wrong that shopkeepers have to take cards or lose business, and charge cash customers the same amount even though they have no commision to pay on the cash payment.
The customer should pay the commission, and then they have the choice of giving some money to the banks or not. The same should apply to electronic payments like Paypal. The buyer should pay the commission.