Morgan Kelly - Pump a few billion into the middle class coffers?

Eric Cartman · 19-08-2011 12:48pm

pmcmahon wrote: »

the banks at the end of the day are a business though,but an essential service,therefore they don't have to please anyone as such but keep their margins on target,they could raise it another 5 percent if they really want to

He who controls the money supply of a nation controls the nation- james a garfield

and the ECB and Germany control the money supply

yes but with banks currently having all these risky assets on their books and people barely meeting the interest payments they wont be able to sustain a business in any manor or get credit themselves, if they foragave the interest , all the payments would deplete those risky assets and improve the banks credit situation, allowing them to make money borrowing to businesses and people who want new mortgages who arent so high risk.

Also they took our money in the form of bailouts, they owe us a favour or 2

maudgonner · 19-08-2011 12:49pm

I have no interest in a PS3, so clearly this will be unfair on me too. Maybe cosmicfart is right and I'm just moaning selfishly!

I'll take my payment in chocolate, on an ongoing monthly basis. Chocolate that's made in Ireland, obviously, thereby providing a boost to the economy...hang on, I think AH may have just made this madcap strategy work

grumpymunster · 19-08-2011 12:52pm

So far as I am aware the plan is to look at those in trouble with their residence not investment or holiday property. People have very short merories when you have a leader of a country advocating at a conference that those who talk down the country should commit suicide and that there is no risk in buying property, then the ordinary people can be forgiven to my mind.
And Bertie was not the only one advocating this banks generally encouraged people to buy houses this year in case they cant afford them next year.
It must be great to look back with such rosy glasses.

minotour · 19-08-2011 1:01pm

A good discussion, one worth having whatever the outcome. Im in an inflated priced mortgage and no doubt ill be left to pay my own way, still if it motivates the markets to some sort of recovery then lets get the ball rollling. Fact is we are all already paying and sure as sh1t its gonna get worse before it gets better.

Knasher · 19-08-2011 1:05pm

So you are proposing that the government saddle us all with new and massive debt, at the absolutely abysmal rates we can currently get. And the very best thing we could do with that money is to just give it away to a small proportion of the population and then hope they won't just leave the country and that they will use it to prop up the local economy.

Richard tea · 19-08-2011 1:09pm

Knasher wrote: »

So you are proposing that the government saddle us all with new and massive debt, at the absolutely abysmal rates we can currently get. And the very best thing we could do with that money is to just give it away to a small proportion of the population and then hope they won't just leave the country and that they will use it to prop up the local economy.

Yes

JJJJNR · 19-08-2011 1:16pm

Oh here we go, single people moaning about couples with kids.

MungBean · 19-08-2011 1:20pm

Would a better solution be (if the state is gonna spend this 5-6Bn anyway) instead of debt forgiveness, ease the pressure by lending to homeowner via mortgage assistance ?

Person under pressure with mortgage, instead of banks getting bailed out because they need the return or the person getting bailed out because he cant keep the up the payments. The state pays a percentage of the mortgage, reducing the payments to be maid by the person. Person can afford to pay mortgage and banks have gotten some return to shore up their books for the short term with the lump sums off the mortgage.

Out of the payments that are being made the state takes a mortgage assistance payment which goes towards paying back the monies they put in to ease the pressure on the banks and home owner. Nobody gets anything for nothing, pressure is eased all round and in due time the 5-6Bn will be paid back by the people who used it and not johnny taxpayer who didnt cause the mess, didnt benefit from the mess and doesnt need money to get out of the mess.

Plus with people under less financial strain their normal spending increases and the economy benefits.

You might at this point realise I dont have a degree in economics so excuse me if this is all rubbish. Just be kind in your shooting down of the idea.

Frank Black · 19-08-2011 1:21pm

grumpymunster wrote: »

So far as I am aware the plan is to look at those in trouble with their residence not investment or holiday property. People have very short merories when you have a leader of a country advocating at a conference that those who talk down the country should commit suicide and that there is no risk in buying property, then the ordinary people can be forgiven to my mind.
And Bertie was not the only one advocating this banks generally encouraged people to buy houses this year in case they cant afford them next year.
It must be great to look back with such rosy glasses.

You obviously don't think or believe that 'ordinary people' are capable of thinking for themselves?

If you make financial decision involving 100's of thousands of euro on the basis of what some politician says at a conference then you don't get much in the way of sympathy from me.

foxyboxer · 19-08-2011 1:26pm

If the government begins to introduce these measures I hope Alison O'Riordan is the first to benefit.

gosuckonalemon · 19-08-2011 1:30pm

Morgan Kelly is a highly respected Economist. He predicted years ago that our economy was unsustainable and a recession/property collapse was inevitable. I think I'll take his word on this one.

Freddie59 · 19-08-2011 1:32pm

I suppose this is all part of a greater cycle of evil and greed. For example, last week I had to visit two consultants. One charged €100 for a visit; the other €180. Thankfully I am in a position to pay.

The latter saw three people in 20 minutes - or €15 per minute. The average pay of a consultant in Ireland is €500k PA - in Germany it is limited to €96K by law. We have the ludicrous situation where consultants are provided with private rooms in public hospitals.....for 20% of their time in return.

Public sector rates in Ireland are 50% above private sector rates. This money is being raised from a diminishing private sector workforce.

We have politicians claiming three (very high) pensions in some instances. No-one should receive a pension until they are at least 65.

We have failed business entities (banks) being propped up by the taxpayer for bad private business deals.

And now we want to splurge another €6bn on 'forgiving debt'.:rolleyes:

What a country. So, you see, unless it's tackled from the top (which it will never be - as the highest earners are the ones making up the rules as they go along) nothing will change. At all.

Freddie59 · 19-08-2011 1:32pm

gosuckonalemon wrote: »

Morgan Kelly is a highly respected Economist. He predicted years ago that our economy was unsustainable and a recession/property collapse was inevitable. I think I'll take his word on this one.

That doesn't make him right this time. And I would be a strong admirer of his.

Wile E. Coyote · 19-08-2011 1:33pm

What I'd like to see happen is the government force banks who benefitted from a bailout to drop the interest rate on all homeloan mortgages, bought during the boom, to 2% and fix them there for the next 5-10 years. This would still hold people responsible for the principle amount that they borrowed but would significantly reduce their monthly bill. Any one who isn't struggling to meet their payment could maintain the current amount and clear down their negative equity a lot sooner putting them in a position to sell the house if they wanted.

Freddie59 · 19-08-2011 1:35pm

grumpymunster wrote: »

So far as I am aware the plan is to look at those in trouble with their residence not investment or holiday property. People have very short merories when you have a leader of a country advocating at a conference that those who talk down the country should commit suicide and that there is no risk in buying property, then the ordinary people can be forgiven to my mind.
And Bertie was not the only one advocating this banks generally encouraged people to buy houses this year in case they cant afford them next year.
It must be great to look back with such rosy glasses.

Not rosy - realistic. Like many others we had over €250k in equity in our home back in 2006 which we could have realised and taken the plunge into oblivion. Thanks fully we didn't - because we lived through the 19880s.....and 14% interest rates. People scoffed at us and told us we were stupid not to. We borrowed IR£5K towards our home over five years in 1981. We paid back €9.5K. But we paid it back.

And where do you draw the line when deciding who's eligible? A la medical card? Where, if you're a couple of Euro over a threshold you don't get it - but your neighbour (a couple of Euro under does? Great plan. Not.

maudgonner · 19-08-2011 1:36pm

gosuckonalemon wrote: »

Morgan Kelly is a highly respected Economist. He predicted years ago that our economy was unsustainable and a recession/property collapse was inevitable. I think I'll take his word on this one.

But in fairness, I predicted years ago that property prices were ridiculous and had to come down, and I'm a feckin' numpty, so I wouldn't put too much store in that!

(And so did my mam ("where are they going to find the people to fill all these houses?"), and many others, but I'm not gonna call them numpties just to make a point on AH

)

Fighting Irish · 19-08-2011 1:37pm

People who make mistakes are usually the people who need to learn from their mistakes the hard way

19-08-2011 1:49pm

I think that most people haven't seen the memo yet!
Infinite growth can't happen in a finite world, we have reached the limits of growth!
The amount of economic growth needed to repay all these mortgages and all other investments simply isn't there and is never coming back.

Have a look at this link http://www.theoildrum.com/node/8268#more for an explanation as to why growth is now a thing of the past.

With these points in mind, take another look at debt forgiveness in all its forms.
Leaving these unpayable debts in the system just mean that the can gets kicked down the road and it's getting bigger every time.

All money is loaned into existence, therefore all debt was created out of thin air, an across the board writedown would benefit everyone (except investors) in the economy, otherwise the debts will just continue to grow indefinitely.

DeVore · 19-08-2011 1:49pm

This only looks like a good idea, while in fact being a sh*t idea, because we have made even sh*tter decisions before it.

DeV.

Venom · 19-08-2011 3:03pm

A better idea would be for interest rates on home mortgages to be reduced.

thebigbiffo · 19-08-2011 3:20pm

DeVore wrote: »

This only looks like a good idea, while in fact being a sh*t idea, because we have made even sh*tter decisions before it.

DeV.

and by implication your are saying my getting a new flatscreen TV is a **** idea:mad:

damn you - damn you all

Mr Benevolent · 19-08-2011 3:35pm

Fighting Irish wrote: »

People who make mistakes are usually the people who need to learn from their mistakes the hard way

Sure. And you've never made any mistakes at all.

Bailing these people out will allow them to save more, not spend more.

Frank Black · 19-08-2011 3:37pm

Venom wrote: »

A better idea would be for interest rates on home mortgages to be reduced.

Depends what you mean by 'better'.
The banks are losing money on mortgages at the moment - mainly due to all the tracker mortgages that were handed out like sweets at a pedophile convention during the boom.
We now own these banks so any loss needs to be made up with public funds – we don’t have any surplus public funds so we have to borrow the money from the ECB/IMF at a higher interest rate than what people are currently paying on their mortgage.
A reduction in interest rates charged by the banks will exacerbate this problem.

DeVore · 19-08-2011 3:47pm

If you think that the argument for debt forgiveness is that it will be good for us "in the long term".... you don't understand what "the long term" is.

DeV. (who has a mortgage).

DeVore · 19-08-2011 3:49pm

ps: google ACC Bank in the late 80's.

"All this has happened before and will happen again."

DeV.

maudgonner · 19-08-2011 3:54pm

DeVore wrote: »

ps: google ACC Bank in the late 80's.

"All this has happened before and will happen again."

DeV.

Bloody Cylons are behind the property bubble? :eek:

Also, this is a line from Peter Pan apparently, which I never know till now. Cool!

Aaaanyway..topic...debt forgivness...bad idea...grrrrr! And stuff...

19-08-2011 3:57pm

Debt forgiveness is a bit like chopping down a dead tree rather than waiting for it to fall down, the real problem is what about the debtors who are paying their debts, if they see others getting away without paying, they'll revolt!

That's why any forgiveness has to be across the board and defaulters lose a percentage of the asset value should it ever get sold or inherited.

skregs · 19-08-2011 4:29pm

How about I get the money I spent on rent reimbursed because I'm not a dickhead who thought a 100% mortgage was a sound investment?

sollar · 19-08-2011 4:30pm

I best begin struggling with my mortgage so i can be first in the queue for this forgiveness.

DeVore · 19-08-2011 4:36pm

Deleted User wrote: »

Debt forgiveness is a bit like chopping down a dead tree rather than waiting for it to fall down, the real problem is what about the debtors who are paying their debts, if they see others getting away without paying, they'll revolt!

That's why any forgiveness has to be across the board and defaulters lose a percentage of the asset value should it ever get sold or inherited.

Its more like telling people you will chop down dead trees for free but if their tree is living they have to pay a maintenance upkeep.

DeV.

Morgan Kelly - Pump a few billion into the middle class coffers?

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