A layman's perspective on the economic crisis

Following the spew of recent recovery plans presented by the Conservatives and Labour, there are just a couple of things that strike me, as a layman whose 'expertise' are limited to a B in AS level economics several years ago, as slightly ill-conceived. Indeed, a cynical individual might even think each party's plans had more to do with winning the next election than solving the current economic crisis.

It seems to me that any viable recovery plan must address the following two issues: How to get banks lending and people spending without indulging the wreckless behaviour that got us into this mess in the first place; and how to minimise the number of jobs and houses lost in the meantime.

To start with the Conservatives, they want to protect banks who have lost billions of pounds over the last year through their dodgy dealings by giving them £50bn more through an unconditional taxpayer funded national loan guarantee scheme. Then, when they inevitably bankrupt themselves again, they want to let them and all the businesses and jobs they will take with them go to the wall. Furthermore, they want to do this in spite of the fact that the government tried almost exactly the same thing last year by offering banks the oppportunity to swap their debts for £50bn worth of government bonds. It didn't work then, why should it work now?

At the same time, they want to scrap all taxes on savings so that savers, like me, aren't punished by the rest of the nation's profligacy, and they want to pay for it by curtailing public spending which could well be essential to creating new jobs. Question: what am I meant to save if I'm unemployed? Also, do the Conservatives really think the reason that more people don't save their money and more savers don't spend theirs is because of the tax burden? What I look out for as a saver are interest rates and they day they were slashed, so were my future savings. The Conservatives incidentally supported those interest rate cuts in order to get more people spending, so can someone explain to me how they can now claim to be friends of the saver? In the meantime, someone else needs to explain to David Cameron what an ISA is.

As for Labour, I would be more encouraged by their bold new plans for saving the world -ahem- the economy, if everything they had tried so far hadn't failed so catastrophically. Their plan to kick-start lending was to prop up banks with taxpayers money and then stand idly by while they resumed business as usual by making a mockery of interest rate cuts, dutifully passing them on to savers and treacherously denying them to mortgage holders. Their plan to get people spending was to combine a meaningless cut in VAT with a substantial increase in National Insurance contributions and taxes. Now, they have come up with another grand plan to create a hundred thousand new jobs whilst presiding over the loss of several hundred thousand more. All the while, their leader is looking as happy as Larry as he is probably the only person (aside from debt collectors) whose job has become safer since the recession started.

Another thing that strikes me as odd for a Prime Minister who loves farming things out to committees to report on, so he can avoid having to take a firm stand on any of them, is that he has yet to assemble a cross-party parliamentary committee to focus purely on the economic crisis; it's causes and how best to get out of it. Instead, all we see are these two parties, one of which will be chosen to form a new government by next year at the latest, competing to come up with the most popular solution yet. How about they each put a few of their best people in a room and not let them out until they come up with a solution that actually works? Failing that, Vince Cable, the only person making any sense at the moment, should just be made Chancellor and be done with it.