Economic Fix?

justcallmetex

I think I heard a great idea on the radio this morning.

It went a bit like this don't give the banks public money to do with what they will. Instead use the public monies to pay the nations mortgages for a year freeing up money to stimulate the economy?

Now I'm sure there's reasons against this type of action anybody care to point out what the might be?

Danbo!

Yeah there is a reason against. A whole bunch of people went in to banks and got HUGE mortgages without knowing anything about economics. They lost their jobs and now they are blaming the banks for making it too easy for them to get money. btw, I dont know anything about economics really, but if I was borrowing half a million euro, I'd do some research..

Ok, so the banks were stupidly reckless, but why should these people who bit off more than they could chew get their mortgages paid for?

javaboy

Also bailing out individual mortgage holders is indirectly bailing out the mortgage lenders anyway.

justcallmetex

javaboy wrote: »

Also bailing out individual mortgage holders is indirectly bailing out the mortgage lenders anyway.

Well yeah but money would be spent in the public interest and not given to the banks to fu(k up again

Turd Ferguson

I dont have a mortgage. I have a small debt (€2000) and a good safe job.
I'm fuckin sorted. They can fly to Timbucktoo with the money as far as I care.

Sam Vimes

javaboy wrote: »

Also bailing out individual mortgage holders is indirectly bailing out the mortgage lenders anyway.

it would be bailing them out but currently they're getting bailed out AND getting the mortgages paid except for the ones that default on it.

with this suggestion the banks wouldn't get as much money and the people who were sold mortgages they couldn't afford would get whatever the banks didn't. the banks would just be protected from bad debts from mortgages sold to people who can't afford it

it helps the banks because no one will default on their mortgages and it injects money into the economy as well as into bank manager's pockets. sounds like a decent plan to me

Sleipnir

ANyway, if the government started paying everyone's mortgage for a year people would blow the money they're saving on holidays etc and we'd probably wind up back in the same place next year.

justcallmetex

Sam Vimes wrote: »

it would be bailing them out but currently they're getting bailed out AND getting the mortgages paid except for the ones that default on it.

with this suggestion the banks wouldn't get as much money and the people who were sold mortgages they couldn't afford would get whatever the banks didn't.

it helps the banks because no one will default on their mortgages and it injects money into the economy as well as into bank manager's pockets. sounds like a decent plan to me

Agreed! anybody know how much a plan like this would cost?

justcallmetex

Sleipnir wrote: »

ANyway, if the government started paying everyone's mortgage for a year people would blow the money they're saving on holidays etc and we'd probably wind up back in the same place next year.

well thats kinda the idea get peeps spending

Sam Vimes

Sleipnir wrote: »

ANyway, if the government started paying everyone's mortgage for a year people would blow the money they're saving on holidays etc and we'd probably wind up back in the same place next year.

you're right that a lot of it would go abroad but a lot would also go into the irish economy. and if this plan was implemented in other countries too, we'd get the benefit from them coming here on holiday.

<----spread the word---->

Adamcp898

so they want the government to buy everyone their house??

Well it hasn't been mentioned has a solution before, I'll give whoever came up that one that

Sam Vimes

the more i think about this the more sense it makes.


1. the government wouldn't have to pay the whole mortgage. they could pay a percentage so that it works out that they'd end up paying the same amount with either plan. so it makes no difference to them

2. the economy will be stimulated by all the extra money in people's pockets

3. the banks are in crisis at the moment because of all the bad debts. if all the debts were being paid there wouldn't be a problem. of course all their debts aren't mortgages but getting them paid would (hopefully) keep them above water. probably all this bail out is doing is giving them the same amount of money that they would have if all their debts were being paid

i'm sure someone will pop in in the next few minutes and tell us why it's such a bad idea though

I don't have a mortgage. Do I just get cash in hand then yeah?

Steve

They could extend the current co-ownership scheme
The one where local government shares the cost of the mortgage and takes proportional ownership of the property which they then rent back to you at a minimal cost.

This way neither the non-deserving banks nor the stupid people who took out silly mortgages they couldn't afford are actually getting free taxpayers money.

Sam Vimes

SteveC wrote: »

They could extend the current co-ownership scheme
The one where local government shares the cost of the mortgage and takes proportional ownership of the property which they then rent back to you at a minimal cost.

This way neither the non-deserving banks nor the stupid people who took out silly mortgages they couldn't afford are actually getting free taxpayers money.

in theory you're right but this crisis was caused by a lot of stupid people getting mortgages they couldn't afford and a lot of stupid banks giving them the mortgages. in an ideal world all those stupid people would be taught a lesson but if thousands of people end up homeless and the banks lose out on thousands of mortgages, they go down and take the whole economy with them. they made mistakes so now they have to be bailed out

if you're bailing out the people who bought responsibly and can afford their houses, you're bailing out the wrong people. the banks won't get any extra money because those people would be paying their mortgages anyway and they'd go under because of all the people who can't pay them. your plan would stimulate the economy because the responsible people would have a bit more money but would still result in the banks going under

justcallmetex

Rojomcdojo wrote: »

I don't have a mortgage. Do I just get cash in hand then yeah?

Nope! Are you getting any payments from the bailouts currently proposed?

Smart Bug

Y'know what'll fix the economy? If the government raises the VAT rate and increase income tax - that'll really promote consumer confidence and increase spending, as well as benefit people on low incomes.

ScumLord

The only way FF can bail out this economy with that bank is to screw each and every other country in the world out of their hard earned money. Their made for it too.

Hellm0

I have a better solution; Let the banks fall and don't give them a penny of public money. Form a new government owned and run bank whose profits go not to share holders but to the maintenance of the country(with specific legislation to prevent those who run said bank from receiving undue compensation).

Adamcp898

Toxic bank ftw. Now if only someone could put a value on all that debt

petrochemical

Nothing can fix this economy. Get ready for 3rd world conditions.

Deadzone

Rojomcdojo wrote: »

I don't have a mortgage. Do I just get cash in hand then yeah?

I dont have one either

How about a new car?

Smart Bug

Hellm0 wrote: »

I have a better solution; Let the banks fall and don't give them a penny of public money. Form a new government owned and run bank whose profits go not to share holders but to the maintenance of the country(with specific legislation to prevent those who run said bank from receiving undue compensation).

Better idea: armed revolution of the people, by the people, for the people.

Viva la revolutione!!

In other words; nothing wll change, banks will be bailed out, and the rich will get marginally poorer and the poor will starve.

mad_PADDY!

To fix the economy mad paddy points towards legalised prostitution.

He could keep many a hooker in business with his reckless spending and lust for sex.

Sleipnir

Smart Bug wrote: »

In other words; nothing wll change, banks will be bailed out, and the rich will get marginally poorer and the poor will starve.

Everyone's a winner! (Except those who aren't)

Sam Vimes

i always wondered this:

1. the banks aren't lending because they're afraid they won't get the money back
2. the businesses can't buy stock and pay staff etc because they can't get credit from the bank so they're letting people go
3. the reason they need credit from the bank is that no one's buying from them
4. the reason no one's buying from them is that people are afraid of being let go (or have been let go) because their employers are going under because no one's buying from them and they can't get credit
5. the banks reassure themselves that they were right not to lend money to X company because they've just gone under but if they had lent them money, they may not have gone under

it's all a cycle perpetuated by fear, one is causing the other. no one can take the initiative and start spending again because if no one else does it they'll be screwed. so could we, as a world, pick a date when we will all start spending again and have fines for people and businesses who are still hoarding their money out of fear?

would that work?

thelordofcheese

Hellm0 wrote: »

I have a better solution; Let the banks fall and don't give them a penny of public money. Form a new government owned and run bank whose profits go not to share holders but to the maintenance of the country(with specific legislation to prevent those who run said bank from receiving undue compensation).

Worst plan ever.

Hellm0

Smart Bug wrote: »

Better idea: armed revolution of the people, by the people, for the people.

Viva la revolutione!!

In other words; nothing wll change, banks will be bailed out, and the rich will get marginally poorer and the poor will starve.

Well I wasn't going to be the one who suggested it but I fully agree.

ScumLord

Smart Bug wrote: »

Better idea: armed revolution of the people, by the people, for the people.

Viva la revolutione!!

In other words; nothing wll change, banks will be bailed out, and the rich will get marginally poorer and the poor will starve.

I've got two arms and I know loads of people that have arms too. Lets clean this mother..

Hellm0

thelordofcheese wrote: »

Worst plan ever.

Really? Why?

Smart Bug

Sam Vimes wrote: »

i always wondered this:

1. the banks aren't lending because they're afraid they won't get the money back
2. the businesses can't buy stock and pay staff etc because they can't get credit from the bank so they're letting people go
3. the reason they need credit from the bank is that no one's buying from them
4. the reason no one's buying from them is that people are afraid of being let go (or have been let go) because their employers are going under because no one's buying from them and they can't get credit

it's all a cycle perpetuated by fear, one is causing the other. no one can take the initiative and start spending again because if no one else does it they'll be screwed. so could we, as a world, pick a date when we will all start spending again and have fines for people who are still hoarding their money out of fear?

would that work?

In order to promote spending you have to ensure that there's more money entering the market by doing something like what the UK did, lower VAT rates. Our government did the exact opposite; they raised VAT and income tax.

In order to cover a budget deficit our government raised the cost of living, instead of cutting dubious programmes and reducing government expenditure in an efficient and logical manner. They then take this new tax revenue and pump it back into the banks, who are among the culprits behind this entire mess. Sound like a good idea to you? Anyone?

justcallmetex

Deadzone wrote: »

I dont have one either

How about a new car?

Nope! Are you getting any payments/cars from the bailouts currently proposed?

thelordofcheese

Hellm0 wrote: »

Really? Why?

I got as far as "Let the banks fall" and stopped reading. You do realise that letting them fall is a very bad thing.

Sam Vimes

Smart Bug wrote: »

In order to promote spending you have to ensure that there's more money entering the market by doing something like what the UK did, lower VAT rates. Our government did the exact opposite; they raised VAT and income tax.

In order to cover a budget deficit our government raised the cost of living, instead of cutting dubious programmes and reducing government expenditure in an efficient and logical manner. They then take this new tax revenue and pump it back into the banks, who are among the culprits behind this entire mess. Sound like a good idea to you? Anyone?

you say they should have lowered tax to stimulate the economy but in this current climate, who says it would? the government are basically doing what everyone else is doing, hoarding their money out of fear.

and with human nature the way it is, maybe the best course of action when you're a small country that can't have much effect on the world economy is to try to keep your head above water and weather the storm.

this problem is not going to go away because the irish government drops tax a few percent, it'll go away when businesses and people worldwide regain confidence. which brings me to my suggestion of "enforced confidence", where you get penalised for hoarding your money.

but just like lowering tax in ireland wouldn't solve the problem, my suggestion wouldn't work unless the whole world did it

justcallmetex

Sam Vimes wrote: »

you say they should have lowered tax to stimulate the economy but in this current climate, who says it would? the government are basically doing what everyone else is doing, hoarding their money out of fear.

and with human nature the way it is, maybe the best course of action when you're a small country that can't have much effect on the world economy is to try to keep your head above water and weather the storm.

this problem is not going to go away because the irish government drops tax a few percent, it'll go away when businesses and people worldwide regain confidence. which brings me to my suggestion of "enforced confidence", where you get penalised for hoarding your money.

but just like lowering tax in ireland wouldn't solve the problem, my suggestion wouldn't work unless the whole world did it

Hence why the OP didn't involve lowering tax but wants to see the money the banks will get anyway properly used

Hellm0

thelordofcheese wrote: »

I got as far as "Let the banks fall" and stopped reading. You do realise that letting them fall is a very bad thing.

Oh I'm sorry I thought being a free market capitalist country we were usually against government intervention and let the market decide what business models work and which do not. I mean I dislike very bad thing's just as much as the next guy but if a business is incapable of being competitive then to hell with it.

Sam Vimes

justcallmetex wrote: »

Hence why the OP didn't involve lowering tax but wants to see the money the banks will get anyway properly used

i agree with you completely. i'm just kind of thread stealing with my own solution that i know will never happen

Hellm0 wrote: »

Oh I'm sorry I thought being a free market capitalist country we were usually against government intervention and let the market decide what business models work and which do not. I mean I dislike very bad thing's just as much as the next guy but if a business is incapable of being competitive then to hell with it.

thousands of people work for banks. our entire economy is based around banks. it would cost far much more money to set up a new public bank and would end up using pretty much the same business model as the current ones

the business model does work, it was just messed up by greed and incompetence. they weren't following the banking business model because they were giving loans to people who couldn't afford them and treating money as if it was free

thelordofcheese

Hellm0 wrote: »

Oh I'm sorry I thought being a free market capitalist country we were usually against government intervention and let the market decide what business models work and which do not. I mean I dislike very bad thing's just as much as the next guy but if a business is incapable of being competitive then to hell with it.

*facepalm*

You're not sorry, you just don't have a clue as to what you're prattling on about.

Because something in the region of 90% of the money in the world only exists in theory (as in, there isn't the currency to back it up) if a bank falls what essentially happens is large chunks of money will simply cease to exist. This is why governments around the world are helping banks out, the alternative is far worse than bailing them out.
Even America, the king of free market capitalism, has bailed banks out (the TARP Capital Purchase Program), which pretty much shows you how important they are.

justcallmetex

justcallmetex wrote: »

Nope! Are you getting any payments/cars from the bailouts currently proposed?

Nope! But I have a credit card that needs paying.

30txsbzmcu2k9w

The government should seriously consider 24 hour drinking laws to get the country back on its feet.
More taxpayer money, more work in the bar trade aswell. Draconian licensing laws are hardly what we need in a time like this.

justcallmetex

Rojomcdojo wrote: »

Nope! But I have a credit card that needs paying.

Silly to borrow at those rates. Try and get another one from a different bank and transfer the balance till you get it paid off.

LouOB

Raise VAT = They already have
Raise Income tax = er they already have
Promote ireland for companies= er they are kinda doing that too but have to allow Alot of tax waivering to do so, hence more money

Hence alot of people are not get increase in wages but instead of staying the same the gov are taking more money on them. Therefore, less to spend ffs really

People to start spending again = er the normal folk are still spending. Its the people who cannot continue to live beyond (sorry WAY beyond) their means have stopped spending, due to lack of money going around (bonuses, increase income, tax incentives). So you dont see 2009 reg's or people buying obscene mortages.

The credit isnt there because...
The banks invested HEAVILY in toxic debt ie instruments that will hold no value.
EG you invested in a say company - but didnt get your money back. Hence you cannot give out cash to others.
Then there is the herd mentality
*this is going to be LONG post
Ideas -
4day week
job sharing
increase in single parents or stay at home parent allowance
lunch (grocery allowance like china) allowance
lower vat on luxury goods
tax haven in one of our little islands (just idea)
Parking meter in dail offices
Cap all political wages (and insist they have community job for 10hrs per week ie with homeless, care centres - real stuff )
Promote tourism better (all these highs and lows - tune. err better one kinda needed at the mo)
Other than that wether out storm of rest of the world and keep your hands in your pockets * see stingiest thing thread

I may have borrowed some of above from Assent of Money program - really good for historical info also

TestTransmission

justcallmetex wrote: »

I think I heard a great idea on the radio this morning.

It went a bit like this don't give the banks public money to do with what they will. Instead use the public monies to pay the nations mortgages for a year freeing up money to stimulate the economy?

Now I'm sure there's reasons against this type of action anybody care to point out what the might be?

so,people who werent silly enough to buy into having to buy your own house at a ridiculously overinflated price get shafted?

let me guess,you have a mortgage that u can no longer afford.

what a ridiculous idea,

Gatsby

Hellm0 wrote: »

Form a new government owned and run bank whose profits go not to share holders but to the maintenance of the country(with specific legislation to prevent those who run said bank from receiving undue compensation).

Your dead right. Giving control of everyones personal and business finances to Fianna Fail is exactly what this country needs right now. With their outstanding track record of fiscal management, what could possibly go wrong.

Sam Vimes

jackncoke wrote: »

so,people who werent silly enough to buy into having to buy your own house at a ridiculously overinflated price get shafted?

let me guess,you have a mortgage that u can no longer afford.

what a ridiculous idea,

well the ones who weren't silly enough to buy into having their own house at a ridiculously over inflated price are going to be in pretty much the same situation whether the money is just handed over to the banks or used to pay mortgages. it won't make much of a difference to them

justcallmetex

justcallmetex wrote: »

Silly to borrow at those rates. Try and get another one from a different bank and transfer the balance till you get it paid off.

I'm guessing......A half million 3-bedroom house in the arse of Lucan?

ejmaztec

Jayce Swift Rhinoceros wrote: »

The government should seriously consider 24 hour drinking laws to get the country back on its feet.
More taxpayer money, more work in the bar trade aswell. Draconian licensing laws are hardly what we need in a time like this.

Why kind of alcoholic drink gets people back on their feet?

justcallmetex

jackncoke wrote: »

so,people who werent silly enough to buy into having to buy your own house at a ridiculously overinflated price get shafted?

let me guess,you have a mortgage that u can no longer afford.

what a ridiculous idea,

More ridiculous than just bailing the banks read the thread.

My house was a little over 100K bought 8 yrs ago in a small development in roscommon with tax relief my payments are sound as is my job.

The OP is supposed to offer an alternitve radical solution to a radical problem.

Now qualify why you believe it to be a ridiculous idea

30txsbzmcu2k9w

ejmaztec wrote: »

Why kind of alcoholic drink gets people back on their feet?

I'd laugh but i'd actually prefer to live in a country that's not repressed.

ejmaztec

Jayce Swift Rhinoceros wrote: »

I'd laugh but i'd actually prefer to live in a country that's not repressed.

I think it's more repossessed than repressed.

gurramok

Surprised no-one banded any figures out despite it been AH!. http://www.finfacts.com/irelandbusinessnews/publish/article_1010472.shtml

"Total outstanding residential mortgage borrowing stood at €130.2 billion in May 2007."

So yeah, lets afford all this for a year while the country is projected to be in deficit in 2009 of €20bn.
Where would the govt get the moeny from considering we are near bankruptcy?

Plant a few trees?

Oops, that national debt just went to Zimbabwe levels