Moral Hazard

Chipboard

We have serious issues in this country. I'm not talking about the obvious ones.

I have genuine sympathy for people who can't service their debts but I believe that that there is a significant amount of defaulters out there who are defaulting because they can or because others are and they don't want to pay if others aren't paying.

I was going to the post office today and as I crossed the street a Range Rover powered past me with a lady driving. I walked down to the post office and when I got there Range Rover Lady was using a letter from someone to explain how she couldn't afford to pay something or other.

I realise that having a Range Rover doesn't mean she's rich (although its difficult to see how she could afford to put diesel in that thing if she hasn't some means) but its difficult to reconcile her having one and pleading poverty.

I'm not suggesting that the little guy in the post office get dealt with more severely than say the NAMA clients either, but if everyone decides to default the entire system will break down.

I'm not sure what the solution is. Start at the top perhaps. Restore peoples faith that the people who borrowed the millions will be made to pay or that if they can't pay what they owe that they will pay what they have, and then work down.

Time Magazine

I see your point but the bankruptcy laws in Ireland are so archaic the general consensus is that they are too harsh and are in need of reform. Allowing people to declare bankruptcy easier and to "move on" from e.g. a big mortgage is probably a better policy option than tying people down and having them claim social welfare for the rest of their lives.

Chipboard

I agree but I wasn't talking about people who can't pay ; I was talking about people who can, but choose not to.

I think that bankruptcy has to have serious ramifications for the person involved otherwise some people will continue to behave recklessly (like the directors of limited companies who trade recklessly and despite the laws which say they can be made personally liable, they never are).

jimmycrackcorm

You couldn't give away a Range Rover these days because no one can afford to run them.

Chipboard

All the more reason for Range Rover Lady to park it and pay her bills instead.