Functionally, this would be the same as ‘ordinary’ govt deficit spending on the same goods and services, and likewise add to GDP and add to the economy’s savings of net financial assets, to the pence.
U.K. Plans ‘Growth Bonds’ to Tap Into Savings, Independent Says
June 6 (Bloomberg) — U.K. Chancellor of the Exchequer George Osborne hopes to persuade households to invest billions of pounds of savings in new government “growth bonds,” the Independent reported, citing unidentified people with knowledge of the matter.
Tax breaks would be offered and cash raised would be invested in projects such as toll roads, green energy and housebuilding, the newspaper said.
The government might lessen risks for small investors by underwriting a proportion of any potential losses, the Independent said.
A “senior government source” told the newspaper cash-rich households have nowhere secure to put their money and be guaranteed good returns because interest rates are low; growth bonds would provide them with an investment opportunity and boost the economy at the same time.