Why borrow when we have got the money?

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Why borrow when we have got the money?

Post by GD on Mon 09 Mar 2009, 3:47 pm

TREASURY member Roger Domaille is standing firm against his department’s ‘almost reckless’ recommendation to borrow to fund a massive investment programme.
Deputy Domaille is against borrowing unless there is an income stream.
Different States members are expected to work on amendments to the department’s proposal to borrow £175m. to help fund £300m. of capital projects during this term of government.
‘I’m fundamentally opposed to borrowing. You have seen the financial situation - to borrow at this time, with all the uncertainty, to me is not a good idea - it’s almost reckless,’ he said.
‘We have up to £180m. in the capital reserve that we could spend in this four-year period. That’s a lot of money - surely we can manage with that?’
Treasury’s process of prioritising which projects should go ahead had been good, he said.
‘But if you look at the interest on the model [consultant] Rothschild did it works out as £9m. a year. Over four years that’s roughly equivalent to a Beaucamps school - where’s the sense in that?’ (from thisisguernsey)

I have to agree with him...


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Re: Why borrow when we have got the money?

Post by kingcolemk on Mon 09 Mar 2009, 3:50 pm

I would have thought that borrowing now, whilst the markets are giving away money practically free would have been a wise choice.

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Re: Why borrow when we have got the money?

Post by Chok Dee Ja on Mon 09 Mar 2009, 4:11 pm

Whos giving money away practically free,i thought we had a credit crunch ?

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Re: Why borrow when we have got the money?

Post by bug1 on Mon 09 Mar 2009, 5:29 pm

kingcolemk wrote:I would have thought that borrowing now, whilst the markets are giving away money practically free would have been a wise choice.

Now I get it.It's free, you don't have to pay it back then.I'm thick me.
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Re: Why borrow when we have got the money?

Post by kingcolemk on Mon 09 Mar 2009, 7:11 pm

bug1 wrote:
kingcolemk wrote:I would have thought that borrowing now, whilst the markets are giving away money practically free would have been a wise choice.

Now I get it.It's free, you don't have to pay it back then.I'm thick me.

Especially if your lender goes belly up.

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Re: Why borrow when we have got the money?

Post by Bouzat on Tue 10 Mar 2009, 8:02 am

We must be the only government in the world that doesn't borrow - there's nothing wrong with it in principle. And borrowing need not mean getting a personal loan from one of the big4 - I suggested issuing Government Stock, which would be like having a local lottery from the investor's point of view - except that you get your money back ( hopefully!)


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Re: Why borrow when we have got the money?

Post by plimmerton811 on Thu 12 Mar 2009, 6:50 am

Borrowing is not free but it is as near as damnit. Credit crunch would only effect those who can not repay or have poor credit referrences that would not apply to Gnsy States who would have 180m in the bank offsetting the borrowing cost yet keeping the capital for when the interest on savings rises.

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Re: Why borrow when we have got the money?

Post by Thistle on Thu 12 Mar 2009, 7:11 am

borrowing your way out of a situation doesn't do us any good never mind the states of guernsey.do we the actual residents of guernsey want to saddle generations to come with debt incurred now by this government .
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