counting on the banks

There is a consensus in the whole of the Belgian political world (which is amazing in itself). The consensus is that the banks should help out the government with its deficit. The reasoning behind it goes as follows : "the banks have caused the financial crisis which turned into an economic crisis which caused the deficit, so since they are already back to making profit, they should pay ...".

Nice. And no negative reactions from any part of the population so far. Looks like sound reasoning too ...

It is bullshit.

Let me start with the reasoning. Yes, the banks caused the financial crisis. Which in part (!) caused the economic crisis. Which does show in the deficit (less income from taxes for the government). But there's a difference between showing in the deficit and causing the deficit. Truth is, since we did the effort for reaching the Euro-prerequisites, we (the state) have been living an easy life. We could have kept up the effort, but we chose not too and used lots of one-time measures to keep the balances looking acceptable. And then the crisis hit ... No longer kept up by economic growth the proverbial pants have dropped.

My second point is about who is really going to pay this one-time-crisis-tax-for-the-banks. In the past the government usually gave itself a winning ticket from the National Lottery (yes, they really did, several times in fact). But this time its the banks. Banks are big employers. Very big ones. And trust me, it is not going to be the hotshot traders that will get their bonus cut.

Banks also deliver services to the public. Joe Public has a saving account there and gets the loan for the house there. At the moment Joe gets 1% on his saving account and pays 4% for his loan. The 1% is equal to the rate that the banks can get loans themselves. As you can see this is daylight robbery. But ... the 4% is the lowest rate in many many many years. And at this very moment many families breath a sigh of relief because the amount of their monthly payment has dropped seriously. Young couples can go for their own house sooner than planned. This is good for the economy.

Therefore I think hitting the banks - although it feels just (and maybe even is just) - is not a good idea. They will hit back very quickly and this will deepen the crisis.

There is no easy solution for the government. What has to be done is that it has to stop thinking short term and start thinking long term again. Our Prime Minister knows this, since he was the mastermind behind our Euro-efforts. So why does he not do it ?