after the next credit crunch which is already underway and the next very deep dip in the second part of this recession which will happen shortly
both party's will not have any choice but to avoid an election at any cost until the 5 year term is up …

as side note
i expect VAT increases to be banded from 5% to and upto 50% and maybe higher …

Yes there is a continued credit crunch. Though technically it is because many potential borrowers do not want to borrow, and certainly not at the rates that the banks are offering.

Vat will not get as high as that. It will kill off business, it could be extended to food and children's clothing. Increased on energy and anything else that we all use. Though with the Liberals in the coalition I would think that it might be added to income tax rather than VAT which is very regressive.

True - but also banks were not lending to businesses which needed the loans to keep afloat. Some managed to keep going by scaling back costs, investments etc., others just went to the wall. Others which could have expended didn’t. This impacts the economy as well from a number of different directions.

I would also say that savers are getting a poor deal as well - I got pretty much 0% on a savings account last year - who wants to save money with that kind of return on the cards? The whole system has seized up.

The government even had guarantees for businesses so that they could continue to borrow but the banks will still not lend, except to those which do not really need it. It is a sign that the banks risk based loan systems are useless.

As for savers rates they are again too low. Through out this crisis once interest rates hit 2% then the government should have used other methods to jump start the economy. It now means we have millions of hone owners who cannot afford a rise in rates of any level. Yet soem are talking about property increases of 10% next year even when most people are having wage cuts or pay freezes. It is nonsensical.

No - it makes no sense at all. Prices and taxes will increase, but people will be earning less. I don’t see how this is going to help. Surely we need to have as much employment as possible to ensure a better tax take and cash circulation?

Yes prices and taxes will increase but I have said for two years that peoples living standards will plummet for a few years no matter what is done. The only fair thing to do is to make the pain as equitable as possible.

House prices are still too high by about 30%, the government should have clamped down on property inflation, but the tories would have said that you were denying people access to a home of their own. In reality if you cannot afford the home and get repossessed then you were only renting anyway. Until you have cleared that mortgage you could still be hit and lose the home so have rented for 20 years with nothing to show for it. What should have happened is a cap and collar system to interest rates for consumers. If the demand is too low for loans then lower it to a floor of say 2%. That will at least guarantee savers some income and still provide and incentive to save. It also stops mortgage rates getting so low that in stokes up another property bubble. When demand for mortgages is pushing up house prices then the central bank demands deposits from banks so their ability to lend to mortgages is seriously curtailed. It will mean mortgage queues but at least people will have a cap on their mortgage payment rather than sky high interest rates. At that point the government could restrict new mortgages to first time buyers. If existing borrowers want to move then they transfer their existing mortgage and put some more of their own money in. This would only be implemented once interest rates were above 2%, even though it sets a floor in future.

Yes we do need to have as much private employment as possible, but just slashing public spending will not necessarily help.