Recent comment on facebook regarding the economy is worth considering in light of the economic downturn.
Virus costs on overdraft
Right, first of all without being political any borrowing by the government will need to be repaid or at least, reduced by taxes or the ability to balance the books and repay the debt.
Thinking it through
We feel it for those in businesses who are picking up the threads of their time and energy and bring it back to a sustainable entity once again.
Those businesses, for whatever reason, that did not have a sutable "reserve policy" will have found the situation more challenging.
So what are the steps to have a vibrant economy and self sustaining business growing?
Speed of money circulating
One aspect is the " multiplier" effect.
This is the speed of money moving around the economy.
Now it still holds good even with electronic money rather than hard cash.
The speed at which we move money has an impact on the community.
I get paid, I buy a loaf, the baker buys stationery for his buiness, the Office retailer buys meat from the butcher and the butcher buys a loaf of bread.
The speed of buying is controlled by lots of things.
Having the cash!, Assessing the need to buy now, quality quantity and price all come into the equation. Its the assessment of the buyer to part with money rather than have it holding for a rainy day or a lower borrowing.
Taken at 10.30 14/5/2020 Daily trend
So if the public are feeling secure and confident they are more likely to buy.
One observstions of the last major resession was that people tended to continue to eat out. This is unlikely after the current virus as people assess the risks of eating out. perhaps home decorating will take a lift. Or perhaps car purchases will regain as people refuse to go on public transport.
So if you think about it, if we are all buying then the sellers will buy and so on, which will in turn help the flow of cash and the "muliplier" will increase.
As an aside when there is a faster rate of sales the VAT for the government will increase ( pay the debt?)
So buying and keeping the money in the community is a good way if improving sustainability.
Buy British again
This is where the Buy British makes sense we buy "locally" and the benefit not only to the purchaser but the seller is all local. As the multiplier works, confidence continues revenue comes in- we pay the debt.
At some point we as a nation can consider the selling abroad as part of the medium trend but for present buy British makes sense. I appreciate that there are some items that we will need to import and we have businesses where all their revenue comes from abroad. (There is also the Brexit ramifications- Buy British will help?)
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