Everyone in the world is affected by the economy.

What I am asking myself if the measures been taken by various governments are solving the increase of spending? I don’t believe that a reduction of VAT will help us to increase spending, I don’t believe that banks will be able to establish lending again and so in that way are able to increase our spending.

If we look more in a realistic way to the economy than everyone is able to see what is going on and surely ideas will come what can lift up the economy.

Some facts:

1. Food prices are high
2. Energy prices are high
3. Rising unemployment
4. More companies are going bankrupt.
5. A decrease in trust for the economy

We don’t have any influence in food and energy but we will have some influence in the other areas.

Fact is that when people become unemployed that most of the benefits are low. In most countries the benefits are below minimum. Also the rules for support to get back into work and losing benefits aren’t correct.

Many people can’t get into work because they have such a minimal amount to spent that there is not any savings and HELP around to make sure that first expenses are met to get back into work.

I lost everything and because of an immediate stop on benefits I will not be able to get back to work since I am not able to support my family and at the same time have expenses for travelling to my workplace. Also when I start to work, I’ll need private childcare for my two little children. Not only these costs but also the time in between pay checks are making it impossible to get back into work. Benefits are stopped immediately if a new job is started.

I don’t pledge for higher benefits, I rather support a rule that will help people like me for support so that they be able to meet these extra expenses rather than to be cut immediately on their benefits.
You need to understand that people on benefits mostly will not have a way to strike a deal with a bank but need to rely on family or friends because at this moment government support isn’t available.

In the long run it will be much cheaper for the government to support these people for a set time. It is also beneficial for the people that benefit from the system. Their self esteem will go up and they become part of society again.

On the other hand if government is giving some sort of bonus to companies that are hiring unemployed people will help all. Companies can have reduced wage bills and the other hand improve efficiency and be competitive in the market.

If I look at the banking industry: At this moment most of the banks aren’t doing that much to earn back the trust that they have lost. I would think twice to put money into savings with a bank. I don’t know if they go bankrupt or not. The same as us ordinary people I think there should be something so that we are able to see the performance of a bank. Banks exists because we make them exists. If we pull out all our savings and investments out by today, than there will be no banks anymore tomorrow. Off course there also will not be an economy as we know it but to see a public register how banks are performing isn’t a bad idea.  At least we all could have prevented the fraudulous actions that have happened over the years. We all can help restoring the trust into banks as long as banks are restoring their confidence back in their customers.

Everyone is suffering from the economic downturn. A few high street brands have collapsed while others have been forced to shutdown. On the other hand it seems that our spending for Xmas didn’t decrease that much.

Off course it was a fact that many people did spent more wisely during the holiday season. They were waiting for the bargains to come and at that moment bought the necessary items.

Will this spending be enough to save some established names? Are we getting back on the necessary spending to get the economy back on track? Fact is that the property industry, banking industry and car industry are getting the worse right now. I rather can say WE are getting the worse right now. While all the industries mentioned above got in some way a bail out, help for ordinary people isn’t there. We, normal people aren’t getting the necessary money in to be able to spent as much as in the “good” years. We’ll be faced with the bill of bail out money for all companies not to be able to structure their business.

And there is the fact that VAT measures, pumping temporary money into failing companies is not helping us. Food prices, Energy prices are still high and that is facing us with huge bills compared to 4 to 5 years ago.
A temporary flood of turnover will not help struggling retailers. Retailers without a lot of diversity in their product lines will collapse. Retailers with a lot of employees will have to lay off workers to be able to cope with a reduced demand for their products. Luxury goods will not be sold because their isn’t money available to replace expensive luxury goods.

In my case I’ll not buy a new car as long as my “old” car is doing its job. New furniture will not be bought while my old furniture isn’t broken down. A new bathroom or a new kitchen will not be bought as long as these things are fulfilling their purpose. Holidays will be taken but nearer to home and to affordable prices. Costs of living will be reduced by buying non- brand food and reducing the costs of phone, gas and electricity bills. 
If some of the things are breaking down than I have to look at ways of repairing them rather than running to the shop and replacing them.

If everyone is doing the same thing as I do than off course companies in these markets will feel the crunch and they sure have to reduce their costs.

In the end I do think that if spending of us is not coming to a normal level than the extra turnover for retailers in the Xmas period will not have helped them. Maybe it is a short term survival but I do think that in the beginning of the new year many of us all have to investigate their options. In the longer term we all will be faced with the things mentioned in this article.

Anyway I do hope that the crunch is something short lived. 

In a follow up to my recent post I am asking myself if it is better to stick with benefits than to get an income in.

The situation is as follows: Me and my wife are searching for a job for some time. I am getting a JSA benefit. During the application instances have told me that nothing will happen to the benefit if my partner is going to work less than 24 hours a week.

This is exactly what is happening. My wife has been offered a job for 16 hours a week earning as a start a “massive” minimum wage. I contacted the instances to ask what will happen if my wife is starting work. No consideration is made that my wife has to make travel expenses and so on. At this moment we are only getting JSA, so there isn’t anything to compensate these expenses and the benefits payment is just enough to cover the necessary food and energy bills.
The answer I got from the benefits office was the income that my wife will get will be deducted till £ 10.00 of our benefits. This means if you look at it properly that my wife is working 16 hours for about £ 15.00. 

If logical my wife isn’t able to take on the job because travel expenses are more than £ 15.00 a week.

From the above I can understand that it is better to benefit from the system then go into employment although I can understand that being employed is a better way to get into a job that is more rewarding.

On the other hand I can’t understand the position of the government in this. We struggle to get ourselves into an interview, benefits are immediately stopped or deductions are unreasonable and with the little people make they will not be able to make ends meet. Would it not be better to have a more supportive government that will temporarily help you to get back on your feet?

At this moment there are measures in place to help banks, to help people that have been repossessed or help for small businesses.

I can understand that we all suffer. I can understand that I am not the only one with the same problems. Therefore I think with the support the government is giving it will not be enough for the people that suffered already and my conclusion of this article might be to stick with your benefits rather than to start working unless you are able to benefit from it. That will not say that I’ll support benefits because in all ways it is better to be in a job but not if there isn’t a temporary financial support available.

PS: Yes I know that tax credits can top up your income but in my circumstances I am only getting JSA for the moment.