Fun Online Polls: Greek bail-outs and Credit Easing

Thanks to everybody who took part in last week's poll, results as follows:

How much longer will they manage to keep Greece in the Euro-zone?

Until the end of this week - 4%
Until the end of October - 38%
Until the end of 2011 - 35%
Forever - the Euro-zone is here to stay! - 18%
Other, please specify - 4%

I went for 'end of October', let's see if history proves us right.
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Little Georgie has come up with a splendid new plan called credit easing (those Tories seem to be struggling with the distinction between 'speeches at Party conferences' and 'Ministerial announcements', don't they? Not even Labour were this shameless.):

A scheme to avert a second credit crunch through a multibillion-pound credit-easing programme for small firms, funded by the Treasury, has been unveiled by the chancellor, George Osborne.

The credit will be provided by the Treasury through an arm's-length operation direct to companies, with the Bank of England acting as the Treasury's agent. Under the scheme, the Treasury will buy small firms' corporate bonds, providing cash direct to struggling firms unable to gain funds from the banks...

It is a myth of course that small businesses are or ever were financed to any significant extent by banks, so it's not clear to me why now is a good time to start, but this does not strike me as a good idea for at least three reasons:

a) It's a very roundabout way of doing things. We agreed that retained profits are the best source of finance for small businesses, and if the Chancellor wants businesses to have more retained profits, all he needs to do is to cut taxes (cutting VAT and NI would have the most dramatic effect, as that would help some loss making businesses become profitable in the first place).

b) There's nothing the government can't mess up. If I want to lend my money to a business, I'll do so myself, I don't want the government doing it for me. And it was government backed borrowing that got us into this mess in the first place. There's too much borrowing going on.

c) Worst of all, it will give the commercial banks the golden opportunity to run down what little lending it has made to small businesses, because those businesses will now be able to repay their bank loans with loans from the government.

So that's this week's Fun Online Poll. Vote here or use the widget in the sidebar.