This is literally so dumb. I don't know if anyone has done a take down of his points but anyway.
Firstly, his house isn't going to be on the hook. Fine but that's normally the case anyway with regards to limited liability companies. Weird to be crying over it. Sure in theory banks could require guarantee/collateral on a loan and the Govt is instead guaranteeing the loans, but yeah. Noting particularly abnormal about being somewhat insulated from personal loss if your business collapses.
Anyway, onto the Bounce Back loans and why it's a shitty policy.
- Government guarantees the loans, but is not itself the lender.
- So the taxpayer takes on 100% of the risk of the loan meanwhile the lenders (all private companies) take 100% of the reward
- The loans have a 2.5% interest rate, which… given the base rate just dropped by a factor of 7 to 0.1% is probably going to look pretty pricey in 6 months time.
- Why isn't the Government itself backing these loans and charging say 0.5% interest on them? Instead the real winners of this policy are the lenders who make a guaranteed 2.5% return on the loans until the businesses either collapse or the balance is paid off. And that's a policy that is being emotionally praised?