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I think it's time to consider debt forgiveness

  • 01-06-2010 05:17PM
    #1
    Closed Accounts Posts: 12,382 ✭✭✭✭


    I am cautious with my money, live within my means, save a significant amount of my salary each month, and have no debt. I avoided buying property during the "boom" because I thought houses were a rip off. In other words, I am the exact sort of person who will be unfairly screwed over by debt forgiveness.

    Let's examine for a second the current problem and the current solution:

    Current problem: there is too much debt.
    Current solution: create more debt.

    When you break it down this simply, it becomes obvious the current solution cannot work and is only going to create a larger, more painful recession at some stage in the future. Probably the not so distant future. And I worry this means my savings could be at risk.

    So I've now reached a stage when I'm willing to accept an unfair tax to get us out of our mess.

    Are any of you - in particular those of you who are not in negative equity - also coming around to this way of thinking?


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Comments

  • Registered Users, Registered Users 2 Posts: 20,860 ✭✭✭✭inforfun


    Abso-****ing-lutely not.

    As we say in Holland: If you burn your arse, you have to sit on the blisters.


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    inforfun wrote: »
    Abso-****ing-lutely not.

    As we say in Holland: If you burn your arse, you have to sit on the blisters.

    OK, I understand it's unfair, but that's not the point. The point is our current solution cannot work and is just going to create a bigger problem for everyone.


  • Registered Users, Registered Users 2 Posts: 16,287 ✭✭✭✭ntlbell


    AARRRGH wrote: »
    OK, I understand it's unfair, but that's not the point. The point is our current solution cannot work and is just going to create a bigger problem for everyone.

    Who do you plan on forgiving


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ntlbell wrote: »
    Who do you plan on forgiving

    Greece, Spain, Portugal, Ireland, etc.

    So I'm talking about national debt more than personal debt.

    It wouldn't have to be full forgiveness, it could be 25c in the € or something like that.

    Being straight up I don't know how exactly it should or could be implemented, I just know our current solution - create more debt - cannot work and not only is delaying the inevitable but is going to create bigger problems for everyone.


  • Closed Accounts Posts: 1,914 ✭✭✭danbohan


    AARRRGH wrote: »
    Greece, Spain, Portugal, Ireland, etc.

    So I'm talking about national debt more than personal debt.

    It wouldn't have to be full forgiveness, it could be 25c in the € or something like that.

    Being straight up I don't know how exactly it should or could be implemented, I just know our current solution - create more debt - cannot work and not only is delaying the inevitable but is going to create bigger problems for everyone.

    their is debt forgiveness , its call defaulting , coming soon to a country near you


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  • Registered Users, Registered Users 2 Posts: 20,860 ✭✭✭✭inforfun


    I am in the position to just pack my bags and leave tomorrow if needed.
    And that will be exactly what i am doing if the day comes that a "NAMA for the little guy" or whatever they are going to call it, comes in action.

    I have lived her for 8 years and I have been looking in amazement how people signed up for 30+ years of mortgages based on 2 salaries. I had numerous calls from my bank if it wasnt time i considered buying.
    I didnt have any problems to resist the urge to buy, no matter how much pain i had every month paying rent.
    But just a bit of common sense and a little bit of knowledge (most of these "superb quality apartments" will fall into pieces in 10/15 years time) and now i am not upto my eyeballs in debt.

    There were people in those 8 years that happily screwed me over with absurd rents and now i have to bail those people out?


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    danbohan wrote: »
    their is debt forgiveness , its call defaulting , coming soon to a country near you

    No, it's not the same.

    Defaulting will cause panic and serious problems.

    Debt forgiveness can be controlled and structured...


  • Registered Users, Registered Users 2 Posts: 16,287 ✭✭✭✭ntlbell


    Isn't this the equivalent of each country just raising each of their tax bands?

    Which we know from previous problems you can't tax your way out of it?

    Our current borrowings are so high because of a bloated overpaid PS and the current heavy load on SW because of increased unemployment who are also overpaid.

    Would it not make more sense to reduce our borrowings significantly, investing the money in job creation to reduce the load on the SW.

    If this would done it would also reduce the cost we currently pay for credit and be more beneficial than giving everyone a pat on the back from their mistakes and no lessons will be learned bar if I get myself up to my nipples in debt i'll be bailed out?

    I'm not sure I fancy this too much.


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    inforfun wrote: »
    I am in the position to just pack my bags and leave tomorrow if needed.

    Do you think Holland will be immune when Greece, Ireland, etc. default?

    If you remove any emotions and think about it logically you can see our current solution is going to end in a lot of pain for everyone.

    As stated already, I have done everything right when it comes to my finances, and am almost militant when it comes to personal responsibility :), but logically I can see we have little choice.


  • Registered Users, Registered Users 2 Posts: 18,853 ✭✭✭✭silverharp


    Countries default all the time, so I think the likes of Greece should default and negotiate new terms. It would be up to their government to demonstrate that they would restructure the economy so that the remainder could be paid back or that they could run the economy at breakeven.
    Wasnt it a Rogoff study that outlined that any economy with a debt to GDP above 90% will suffer slower growth by about 1% per year so its in no countries interests to maintain crippling debt. Here the moral hazard reverts to the banks and pension funds for bank rolling these drunks

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



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  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ntlbell wrote: »
    Isn't this the equivalent of each country just raising each of their tax bands?

    Which we know from previous problems you can't tax your way out of it?

    Our current borrowings are so high because of a bloated overpaid PS and the current heavy load on SW because of increased unemployment who are also overpaid.

    Would it not make more sense to reduce our borrowings significantly, investing the money in job creation to reduce the load on the SW.

    If this would done it would also reduce the cost we currently pay for credit and be more beneficial than giving everyone a pat on the back from their mistakes and no lessons will be learned bar if I get myself up to my nipples in debt i'll be bailed out?

    I'm not sure I fancy this too much.

    I think you and I both know there will be no "reduce our borrowings significantly, investing the money in job creation to reduce the load on the SW" solution. Nor will there be a fix the "bloated overpaid PS" solution.

    There is little political will for these things.

    Would you at least agree with me that our current solution - create more debt - is the wrong one?


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    silverharp wrote: »
    Countries default all the time, so I think the likes of Greece should default and negotiate new terms.

    Can the Euro recover from Greece defaulting?


  • Registered Users, Registered Users 2 Posts: 16,287 ✭✭✭✭ntlbell


    AARRRGH wrote: »
    I think you and I both know there will be no "reduce our borrowings significantly, investing the money in job creation to reduce the load on the SW" solution. Nor will there be a fix the "bloated overpaid PS" solution.

    There is little political will for these things.

    Would you at least agree with me that our current solution - create more debt - is the wrong one?

    But if you don't have faith in the government to reduce borrowing etc etc, why do you think they'll handle your "debt forgiveness" package correctly?

    Obviously mounting up the debt is not the answer.

    Reducing the waste in the PS.

    Reducing the PS wage bill.

    Reducing the amount of people on SW

    Reducing the overall bill of the SW

    bringing more people into the tax bands and increasing the overall tax intake by increasing job creation.

    these are the answers IMO, is this government capable of that?

    is any other party we currently have to choose from capable of doing it?


  • Closed Accounts Posts: 101 ✭✭Scan Man


    I think it's time people stopped trying to look for a way out of the crap they piled on top of themselves.

    People who took out insane mortgages, which they kept re-mortgaging, to buy the two new car, second house, and three holidays a year deserve to get what's coming to them.

    Everyone knew what was coming, yet they think they can now evade the consequences? This is no different than the pissheads on the town who kick the living **** out of people, and then end up in Court trying to evade the consequences.

    About time people sucked it up, and took the fall.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ntlbell wrote: »
    But if you don't have faith in the government to reduce borrowing etc etc, why do you think they'll handle your "debt forgiveness" package correctly?

    Obviously mounting up the debt is not the answer.

    Reducing the waste in the PS.

    Reducing the PS wage bill.

    Reducing the amount of people on SW

    Reducing the overall bill of the SW

    bringing more people into the tax bands and increasing the overall tax intake by increasing job creation.

    these are the answers IMO, is this government capable of that?

    is any other party we currently have to choose from capable of doing it?

    I don't believe any political party are willing to make the right decisions as it involves "scapegoating" one or more large groups of people. Obviously it isn't really scapegoating, but the PS won't understand that.

    So I do not believe the political will is there to make the right decisions.

    Hence why I think debt forgiveness needs to be considered. It will piss off a lot of people, but it will also make a lot of people happy. Politically it seems the lesser of two evils.


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    This post has been deleted.

    Because the consequences of Greece, Portugal, etc. defaulting are a lot worse for everyone than having to pay a bit more tax.

    Listen, I understand it is unfair. I just don't see any other *realistic* solution.


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Scan Man wrote: »
    I think it's time people stopped trying to look for a way out of the crap they piled on top of themselves.

    People who took out insane mortgages, which they kept re-mortgaging, to buy the two new car, second house, and three holidays a year deserve to get what's coming to them.

    Everyone knew what was coming, yet they think they can now evade the consequences? This is no different than the pissheads on the town who kick the living **** out of people, and then end up in Court trying to evade the consequences.

    About time people sucked it up, and took the fall.

    Sorry, you're kind of missing the point.

    The point is our current solution (what you described) cannot work.


  • Registered Users, Registered Users 2 Posts: 18,853 ✭✭✭✭silverharp


    AARRRGH wrote: »
    Can the Euro recover from Greece defaulting?


    Big question! Greece defaulting would stick it to the French and German banks, that would then put pressure on state finances if their was a new round of bank bailouts.
    The currency would devalue versus the other currencies, but "kicking the can down the road" wont change anything either. The bad debt will be squeezed out of the system one way or the other. Its like a ruddy game of pass the hand granade.
    History suggests that currency unions breakdown eventually and the Euro does have flaws so it cant be ruled out. The German taxpayer and Greek taxpayer are sitting on different sides of the fence.

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


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  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    This post has been deleted.

    I like this solution.

    But is it realistic?

    Would the EU be willing to do this?

    I dunno...


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    AARRRGH wrote: »
    I like this solution.

    But is it realistic?

    Would the EU be willing to do this?

    I dunno...

    For gods sake all the eurozone states
    ALREADY signed up to the Stability and Growth Pact before
    yes its realistic, and several of the states have kept their end of the deal
    its a matter of enforcing existing treaties
    of course the reckless states are not willing to do this, just like the reckless people here want others who were sensible to pay for their mistakes


    there are parallels between Greece and Germany
    and
    the sensible people in Ireland and the reckless muppets who endebted themselves into a corner

    its a pity you cant see the similarities


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ei.sdraob wrote: »
    For gods sake all the eurozone states
    ALREADY signed up to the Stability and Growth Pact before
    yes its realistic, and several of the states have kept their end of the deal
    its a matter of enforcing existing treaties
    of course the reckless states are not willing to do this, just like the reckless people here want others who were sensible to pay for their mistakes


    there are parallels between Greece and Germany
    and
    the sensible people in Ireland and the reckless muppets who endebted themselves into a corner

    its a pity you cant see the similarities

    I can see them. You are simply misunderstanding my point.

    Idealism and politics do not match.

    You want the *right* thing, but the right thing tends to be impractical in politics. We are already seeing this all around us. Come on, why else do you think so many bad decisions are being made? That is why I think debt forgiveness is probably our only solution now.

    You are being idealistic if you think the *right* solution will be implemented. We need to focus on *realistic* solutions.


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    AARRRGH wrote: »
    I can see them. You are simply misunderstanding my point.

    Idealism and politics do not match.

    wrong

    an irresponsible and cheating husband on one hand and a responsible and faithful wife on the other hand

    dont match


    nothing to do with idealism, everything to do with responsibility and (gasp) "fairness" and getting a divorce


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    AARRRGH wrote: »
    You want the *right* thing, but the right thing tends to be impractical in politics.

    Because turkeys dont vote for xmas :)

    Politicians will lie and appease the voters, kicking the problem down the road to next government

    in turn creating larger and large problems


    how did Greece and Ireland endup where they did? yep weak and populist politicians, giving people what they wanted but what they could not afford to pay for


  • Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ei.sdraob wrote: »
    wrong

    an irresponsible and cheating husband on one hand and a responsible and faithful wife on the other hand

    dont match


    nothing to do with idealism, everything to do with responsibility and (gasp) "fairness" and getting a divorce

    If you stop thinking about the issue emotionally and think about it logically you will see the concept of fairness is politically unimportant.

    They are not going to implement a fair solution.

    This is obvious as it is already happening.

    The current solution is to continue creating more debt.

    This is just going to create another crash.

    So when you stop being idealistic and stop hoping for a fair solution you see we don't have many options.

    One is debt forgiveness.
    Another is force Greece to default.

    We are currently doing the latter.

    I am saying the former is less damaging.


  • Closed Accounts Posts: 2,819 ✭✭✭dan_d


    Scan Man wrote: »
    I think it's time people stopped trying to look for a way out of the crap they piled on top of themselves.

    People who took out insane mortgages, which they kept re-mortgaging, to buy the two new car, second house, and three holidays a year deserve to get what's coming to them.

    Everyone knew what was coming, yet they think they can now evade the consequences? This is no different than the pissheads on the town who kick the living **** out of people, and then end up in Court trying to evade the consequences.

    About time people sucked it up, and took the fall.

    You see, there's people here that keep saying stuff like that. Now I do not believe that everyone who decided they wanted to be a "developer" and now has 3 or 4 mortgages should be bailed out, or that if you're struggling to pay your bills, they should fall on your neighbours. People were incredibly stupid and everyone played their part. But you're talking about almost a whole generation here. What do you think will happen when they "suck it up?" What does that mean? They sell the new cars, stop taking the holidays, put every penny they have to pay the mortgage, still can't pay it, end up in arrears, being repossessed and.................then what? The debt still exists. The bank have a house they can't get the original price for, or get rid of. And a couple/young family is essentially out on the streets relying on the welfare system. I would find it very hard to believe that you don't know one single person without a huge mortgage to pay for a bog-standard house that's now in negative equity. Would you like to see that person "sucking it up"?

    It solves absolutely no problems whatsoever, and in fact, creates more. I have not a notion about how to solve this. I've said before here, the biggest problem we have - bigger than Anglo, Bertie Ahern, Roddy Malloy, the DDDA - is the huge mortgages that a large percentage of people are now locked into. They can't be offloaded and in many cases can't be paid.

    But screaming for your pound of flesh isn't going to make the problem go away or solve it.


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    AARRRGH wrote: »
    One is debt forgiveness.
    Another is force Greece to default.

    We are currently doing the latter.

    I am saying the former is less damaging.

    "debt forgiveness" is default


  • Closed Accounts Posts: 3,619 ✭✭✭fontanalis


    I wouldn't get too carried away about considering debt forgiveness especially when you see people signing up for the same crap that helped get the country into the mess.
    http://www.tribune.ie/business/news/article/2010/may/30/jon-ihle-insanity-reigns-as-big-banks-woo-first-ti/


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  • Closed Accounts Posts: 595 ✭✭✭George Orwell 1982


    fontanalis wrote: »
    I wouldn't get too carried away about considering debt forgiveness especially when you see people signing up for the same crap that helped get the country into the mess.
    http://www.tribune.ie/business/news/article/2010/may/30/jon-ihle-insanity-reigns-as-big-banks-woo-first-ti/

    Yeah debt forgiveness would create moral hazard. And where would it end. Why not forgive credit card debt while we are at it? Plus its just not affordable. As it is there are many serious economic commentators who believe that Ireland has already too much debt and that we will end up like Greece. If the State was to take on a whole lot more mortgage debt where would we be?


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