Debt forgiveness - an economic happy story

thebigbiffo

OK, maybe some wont find it a happy story - but if you're in negative equity and up to your eyeballs in a mortgage you are finding increasingly diffult to service these guys are making alot of sense.

http://www.irishtimes.com/newspaper/opinion/2010/1111/1224283092835.html

Economists Constantin Gurdgiev, Brian Lucey, Stephen Kinsella, Ronan Lyons, Karl Deeter, Shane Whelan, David Madden, Brendan McElroy, Valerio Poti and John D Masson suggest a way to help mortgage defaulters


THE BURSTING of the boom has left tens of thousands with debts they will never be in a position to repay. These debts are poisoning the balance sheets of Ireland’s banks, preventing the emergence of an economic recovery, as well as causing untold social misery. As a society, we must face up to this.
Two main problems exist: first, hundreds of thousands of people now find themselves in negative equity, where the value of their primary residence is less than the loan secured on it; and second, more than 100,000 also find themselves in difficulty paying the interest costs on their personal home loans.
With house prices continuing to fall, interest rates set to rise, after-tax disposable income falling and unemployment remaining high, there is a massive socioeconomic problem to be addressed.
Current asking prices suggest that 200,000 households are in negative equity, the majority of 270,000 people who bought between 2005 and 2008. Figures from June show 36,000 mortgages were in arrears of three months or more, with collective arrears of just over half a billion euro. These figures do not account for tens of thousands who have renegotiated, switched to interest-only repayments or obtained a reduced repayment schedule for a period of time.
If house prices fall by 55 per cent from the peak, half of buyers in 2004 and a quarter of those in 2003 would enter negative equity and 200,000 households would face negative equity of more than €50,000 and there would more than likely be 60,000 households in arrears.
Their arrears of €10 billion would compare to total mortgage debt outstanding in the Republic of €115 billion. In the context of an overall bank bailout scheme of €50 billion and rising, it is relatively small but at the individual level and, equally importantly, at the level of the real economy, it is a very large problem indeed. We suggest that this makes full or partial debt forgiveness a viable consideration. From an economic perspective the key question is: how would partial debt forgiveness affect the Irish economy?
Individual households in debt do not spend, they do not invest: they attempt to pay down debt when and where they can and they hoard cash. Arrears and negative equity lead to reduced entrepreneurship in the long run, as distressed households face both less wealth against which to borrow and more uncertainty about their income and safety-net savings.
In Ireland this is compounded by the draconian, outdated and entirely inappropriate laws on personal bankruptcy, the lack of non- recourse mortgages and the effect bankruptcy judgments have on an individual’s ability to engage in business.
These cumulative economic effects can be tackled through a debt forgiveness mechanism. Banks must allow private home borrowers to revert to pre-crisis debt burdens. Ireland’s banks must acknowledge that current debt levels are unrealistic and that timely write-offs are necessary.
Unable to control the external value of our currency, we need to replicate the effects of a devaluation internally to regain international competitiveness. The problem with deflation (and we are experiencing a brand of it) is that as price levels fall, the pain of the debt increases. Generally a policy choice is to inflate the debt away, but in Ireland, we typically do not issue loans on long fixed rates so, even if we could devalue our currency, borrowers would still be crippled as rates shot up. In the long run, socially and economically, debt forgiveness is the best option.
Internationally, more advanced menus for systemic mortgage default crises cover a wide range of options. Successful debt resolution regimes set the cost of restructuring at levels where households’ ability to pay preserves the value to lenders, in excess of what can be achieved in an immediate foreclosure.
In the case of Ireland, such a formula would most likely lead to an implicit writedown of at least 30 per cent of the more recent mortgage amounts on average, yielding an expected total cost to the entire system of circa €37 billion to €49 billion.
In Ireland, there were two initial responses to the crisis. The Government forced banks into signing, then extending to February 2011, a moratorium on repossessions, meaning lenders must wait at least a year from the time arrears first arise before applying to the courts for a repossession order.
Privately, people have been exhausting their savings, and that of family and close friends, to stave off slipping into arrears. Both of these are stop-gap measures and new approaches are emerging.
Publicly, the Expert Group on Mortgage Arrears has proposed reforming bankruptcy and introducing non-judicial debt settlement. Privately, Ireland is seeing more and more “accidental landlords” as people rent out their home and either move back in with parents or become tenants elsewhere. These are, in the end, only temporary and partial measures.
We suggest that as there are three parties to the problem – the banks, the regulator (ie the State) and the individual – these three must also be part of the solution.
For persons in negative equity, or where the loan is so large that it is becoming distressed, we suggest some degree of individual debt forgiveness and restructuring.
There is an argument of moral hazard that must be addressed – if individuals do not suffer the consequences of their actions, then there is a reduced incentive for them and for others to behave in a sensible fashion. We argue that the existing levels of distress, plus the partial nature of the debt forgiveness help to mitigate this. People have already been burned and this lesson will not, it is to be hoped, be lost.
In addition, the banking and regulatory systems have collapsed and are in the process of being rebuilt. Central to the new systems must be a set of regulations, rigorously implemented, which prevent this problem from recurring and which will realign incentives properly to price risk in lending by shifting some of the burden off the shoulders of the borrowers and onto the lenders.
In order to implement this burden-sharing, a binding arbitration process needs to be put in place, to allocate the excess burden. In addition, we need urgent changes to the bankruptcy laws and to introduce the non-recourse mortgage option.
The request for entry into arbitration can be initiated by the borrower or lender. The arbitrators, which could be Mabs or some other independent organisation, would be empowered to determine either the allocation of any negative equity burden or to alter and adjust the mortgage terms.
For lenders who refuse to enter into arbitration, alterations to the mortgage code or ultimately the withdrawal of licence are appropriate responses. The public good is best served here by forcing the banks to take the great part of the losses for which they were responsible, not forcing the hard-pressed homeowners to take an unbearable burden into the future where they will inevitably buckle under the strain of repayment with disastrous social and economic consequences.
The losses that will be crystallised in the banks can be filled with additional Nama bonds – now that we have Nama, we may as well make some use of it. This will increase the interest burden on the taxpayer, or in the end perhaps on the ECB but we argue that, in the overall socioeconomic context, debt forgiveness to the maximum feasible extent is a first step to restoring the economy and society.

I've posted similar suggestions on here before and the obvious response for some will be this: 'i didn't get a mortgage i couldn't afford - so i''ll be damned to see people bailed out when i was sensible'.

imo, that's an ok attitude and ya cant be blamed for it, but i believe the greater good of the country would be serviced by allowing people spend their money in the economy instead of throwing it into a mortgage from the (nationalised) banks in the hope of being in equity within the next decade.

edit: how the hell do you quote properly!!!

mp3kid

edit: how the hell do you quote properly!!!

Like this

r3nu4l

Do it this way:

[noparse]

text goes here

[/noparse]

Right now your tags say:

[noparse][/QUOTE]text goes here[/QUOTE][/noparse]

You have a / character in your first quote tag

thebigbiffo

mp3kid wrote: »

Like this

grrrr ya smart b'astard!

r3nu4l wrote: »

Do it this way:



Right now your tags say:

[noparse]

text goes here[/QUOTE][/noparse]

You have a / character in your first quote tag [/QUOTE]

thank you very much!:D

jester77

So people who had a bit of sense and were able to sit down with a pen and paper and do up their budgets, and take into account interest rate rises, possibility of employment, etc and realising that houses were too overvalued, thus not purchasing are now the foolish ones :rolleyes:

TheZohanS

Negative equity only effects you if you're going to SELL your home. Most people have no intentions of selling their home.

Other than that it doesn't mean a damn thing, you still have a roof over your head.

thebigbiffo

jester77 wrote: »

So people who had a bit of sense and were able to sit down with a pen and paper and do up their budgets, and take into account interest rate rises, possibility of employment, etc and realising that houses were too overvalued, thus not purchasing are now the foolish ones :rolleyes:

no. the point here (if you read the article) is that the banks were the ones at fault...they made mad decisions that aggravated the extent of the boom and the crisis that followed. the facts are normal joe cant be blamed because he bought a house between 2003 and 2008, that he didnt expect his job to be lost or his wages slashed, or he wanted to live close to his family or work...

i see your point - and if you took out a mortgage 10 times your imcome you were finding it hard to afford anyway then you should probably be chased for the money anyway...but the average person who bought a house relative to their income and didnt really put a foot wrong is still being nailed to the wall - and that does not help the economy or the country.

mikemac

thebigbiffo wrote: »

: 'i didn't get a mortgage i couldn't afford - so i''ll be damned to see people bailed out when i was sensible'.

Damn right!

I remember the smug comments about paying landlords mortgage and throwing away "dead money" in rent.
And the smug comments on how much paper value they had

I'm not like that, I won't be smug back.

But there has to be consequences. If that debt forgiveness does not have tight procedures then any chancer will jump in and try and something written off for themselves.
It better be tightly controlled

I remember a teacher on 50k or so crying on the radio as she lost a lot on some house in Croatia. Anyone remember this? Does she get debt forgiveness?
What about the people who loaned their deposits from the credit union and never declared this to the bank? Inflated their overtime earnings?

There are genuine cases and there are many that aren't

cursai

thebigbiffo wrote: »

but i believe the greater good of the country would be serviced by allowing people spend their money in the economy instead of throwing it into a mortgage from the (nationalised) banks in the hope of being in equity within the next decade.

Have to argue with that, the greater good would not be served. First of all the majority of people in this country dont have overblown mortgages.

secondly why should we have a second Nama type bailout? People complained about the first one but now that peoples own pockets will be taken care of...its suddenly fine!

I don't want to pay twice for stupid money handling by bankers and homeowners..period..

JimsAlterEgo

Will the people availing of this sell their flat screen TVS, sell their 2nd car and stop going on holidays for the next 5 years. Wil they fVck, another Irish solution to an Irish problem.

thebigbiffo

TheZohan wrote: »

Negative equity only effects you if you're going to SELL your home. Most people have no intentions of selling their home.

Other than that it doesn't mean a damn thing, you still have a roof over your head.

absolutely, but as an example as to why this this would help the country:

lets say you've taken a 25% paycut. you've 25% less to spend in the economy. your house is worth 200k but you're paying a mortgage worth 300k. so you're spending more on your mortage relative to what you earn and spend within the economy. that's what this is about - not whether you want to sell or not.

cursai

thebigbiffo wrote: »

absolutely, but as an example as to why this this would help the country:

lets say you've taken a 25% paycut. you've 25% less to spend in the economy. your house is worth 200k but you're paying a mortgage worth 300k. so you're spending more on your mortage relative to what you earn and spend within the economy. that's what this is about - not whether you want to sell or not.

Can i get this same bailout for my Car loan for my second hand car which is six thousand euro?

Cookie_Monster

cursai wrote: »

Can i get this same bailout for my Car loan for my second hand car which is six thousand euro?

+1 sure if you can get it for your house why not car too.
I didn't buy a house at the stupid prices they were going for, can I have some free money for being sensible about property?

Blazer

Seeing that I just helped to bail out the banks I'll be damned if I've to help bail out idiots who overspent on their houses.
And besides who gives a toss about negative equity..I doubt many of them are planning to selling their house anytime soon.
In fact doing this will lead to more problems down the road in a few decades as precedence will have been set and Irish spongers..sry people will expect the same again.
The only people who I would see it for would be for those who plan to emigrate and who needed the extra cash to make a better life for themselves abroad.

TOOYOUNGTODIE

The only correct way to deal with a suggestion like this is to have a referendum, if it is voted in by the majority of the country then so be it, the people who have not been stung will have to put up with it.

I personally have not been stung by buying a house i cant afford, i have been stung by having a qualification that wont allow me work in my own country anymore due to the current economic climate, but hey i'm not bitter!:mad:

cursai

Cookie_Monster wrote: »

+1 sure if you can get it for your house why not car too.
I didn't buy a house at the stupid prices they were going for, can I have some free money for being sensible about property?

I dont think anyone should be responsible for their mistakes in life.......discussion over i think.

bladespin

cursai wrote: »

Can i get this same bailout for my Car loan for my second hand car which is six thousand euro?

Applying that logic we're all entitled to it, my credit card's maxed and has been for a while, that surely would qualify for forgiveness.
A better solution would be for the departmant of finance to give every tax payer in the country a cheque for, say, €50,000, to clear part their negative equity and for those who aren't affected to spend as they wish, talk about kick starting the economy.

mikemac

OP, if you write off debt then who can say if the money is even going to stay in the economy?

What benefit is there to write off money and so people head off to Spain on holidays.
Yeah we pay VAT and other taxes but there are no Irish companies making cars or plasma TV's

You cannot control where people spend their money. And you're writing off debt and hoping it will be used with Irish businesses.
No guarantee of this at all

Diapason

Under normal circumstances I'd completely agree with the fairness argument, but post-NAMA it's now clear that such considerations don't apply.

As time goes on I can see something like this happening, and a year ago I would have said never ever.

thebigbiffo

Cookie_Monster wrote: »

+1 sure if you can get it for your house why not car too.
I didn't buy a house at the stupid prices they were going for, can I have some free money for being sensible about property?

car loans and a home for you, your family and children are 2 completely different things and it's not comparing like with like. apart from that, it's obvious that a five year loan for 6k is not the same noose around your (or the wider economies) neck as a 30 year loan for 300k.

all that aside - a car is a luxury purchase at that price, even during the boom. you could just have easily got a fiesta for a grand but chances are you wouldnt be caught dead in it.

if you were married with 2 children and wanted to live an average lifestyle in your community or close to work you had no choice but to buy at boom prices. people either ignore this, convieniently forget it are not aware of it because the circumstances never applied to them.

Blazer

TOOYOUNGTODIE wrote: »

The only correct way to deal with a suggestion like this is to have a referendum, if it is voted in by the majority of the country then so be it, the people who have not been stung will have to put up with it.

I personally have not been stung by buying a house i cant afford, i have been stung by having a qualification that wont allow me work in my own country anymore due to the current economic climate, but hey i'm not bitter!:mad:

you mean as leave it up to the same idiots who voted FF back into power? :mad:

I might as well start writing the cheque now

cursai

bladespin wrote: »

Applying that logic we're all entitled to it, my credit card's maxed and has been for a while, that surely would qualify for forgiveness.
A better solution would be for the departmant of finance to give every tax payer in the country a cheque for, say, €50,000, to clear part their negative equity and for those who aren't affected to spend as they wish, talk about kick starting the economy.

Exactly!! i vote for financial anarchy and extra pocket money for the grownup kids of Ireland!
Wheres Alison O Riordan when you need her...pure wisdom.

subway

thebigbiffo wrote: »

no choice but to buy at boom prices. .

LOL

Cheapo

thebigbiffo wrote: »

OK, maybe some wont find it a happy story - but if you're in negative equity and up to your eyeballs in a mortgage you are finding increasingly diffult to service these guys are making alot of sense.

http://www.irishtimes.com/newspaper/opinion/2010/1111/1224283092835.html



I've posted similar suggestions on here before and the obvious response for some will be this: 'i didn't get a mortgage i couldn't afford - so i''ll be damned to see people bailed out when i was sensible'.

imo, that's an ok attitude and ya cant be blamed for it, but i believe the greater good of the country would be serviced by allowing people spend their money in the economy instead of throwing it into a mortgage from the (nationalised) banks in the hope of being in equity within the next decade.

edit: how the hell do you quote properly!!!

I dont fall for this Greater good of the economy....I worked in a large Multinational for 12 years paying huge amounts of Tax each year. I then decided that it was time to leave and try and set up my own business....Unfortunately after 3 years the Business failed and I was left with tens of thousands of Debt( not blaming anyone as I made the decision to leave steady employment and risk my own venture)...coming towards the end of the Business my Doctor put me illness benefit and told me to Close the business as it was putting me into the grave...I then went to the Social Welfare to process my Illness benefit and after many weeks they came back saying that i was entitled to no benefit as I had not paid enough tax in the previous two years - but they didn't mention the tens of thousands in tax that i paid with my previous employer...So i was left on my own with not a single cent and had the banks / credit card companies contacting me non stop demanding payment...not one bit of support from the government was offered and I was on my own to fight those clowns in the banks..I was in a state of dis pair and ignored the doctors advice about resting etc started looking for a Job. I eventually got a new Job and have the Job ever since and after all the Debt and hassle i received it will now be paid of by the middle of next year...the Last four years have been extremely hard while paying of the debt...but I have learned a lot in those few years...mainly - always look after number one and your family cause no none else will including the government...shop where you get the best price - that includes going north - Patriotism - where was the governments patriotism when they told me to F off etc.....So now that I should be Debt free next year, i don't wont my taxes to go towards bailing out other people who made silly desions...I did make a decision and it has cost me 4 years of my life and a further 5 years of bad credit..As other posters have said People where gloathing around years ago saying that the value of their hoses were worth X amount and have increased in X over a period of a few months...Now it has swung the other way and they now expect to be bailed out...I'm sorry but things don't work like that..if I was to walk into a betting shop and place a bet but then i lose can I then ask for my money back?? Id be told to go and Jump...and so should all of those people who expect to get bailed out!!

thebigbiffo

subway wrote: »

LOL

you're a lecturer in english literature i take it?

what a fine example of how to outline your complex and intricate argument...

cursai

thebigbiffo wrote: »

car loans and a home for you, your family and children are 2 completely different things and it's not comparing like with like. apart from that, it's obvious that a five year loan for 6k is not the same noose around your (or the wider economies) neck as a 30 year loan for 300k.

all that aside - a car is a luxury purchase at that price, even during the boom. you could just have easily got a fiesta for a grand but chances are you wouldnt be caught dead in it.

if you were married with 2 children and wanted to live an average lifestyle in your community or close to work you had no choice but to buy at boom prices. people either ignore this, convieniently forget it are not aware of it because the circumstances never applied to them.

You cant get a fiesta for a 80 km commute to work everyday!
Im not complaining about my car loan, i can afford it. But if your mortgage is going to be paid off, im sure as well gonna be looking for my loans to be paid off. Sure ITS ONLY SIX GRAND!! WHY SHOULD I BE HELD ACCOUNTABLE FOR IT. I HAD TO BUY IT AND NOW I DONT WANT TO PAY FOR IT!

cursai

Cheapo wrote: »

I dont fall for this Greater good of the economy....I worked in a large Multinational for 12 years paying huge amounts of Tax each year. I then decided that it was time to leave and try and set up my own business....Unfortunately after 3 years the Business failed and I was left with tens of thousands of Debt( not blaming anyone as I made the decision to leave steady employment and risk my own venture)...coming towards the end of the Business my Doctor put me illness benefit and told me to Close the business as it was putting me into the grave...I then went to the Social Welfare to process my Illness benefit and after many weeks they came back saying that i was entitled to no benefit as I had not paid enough tax in the previous two years - but they didn't mention the tens of thousands in tax that i paid with my previous employer...So i was left on my own with not a single cent and had the banks / credit card companies contacting me non stop demanding payment...not one bit of support from the government was offered and I was on my own to fight those clowns in the banks..I was in a state of dis pair and ignored the doctors advice about resting etc started looking for a Job. I eventually got a new Job and have the Job ever since and after all the Debt and hassle i received it will now be paid of by the middle of next year...the Last four years have been extremely hard while paying of the debt...but I have learned a lot in those few years...mainly - always look after number one and your family cause no none else will including the government...shop where you get the best price - that includes going north - Patriotism - where was the governments patriotism when they told me to F off etc.....So now that I should be Debt free next year, i don't wont my taxes to go towards bailing out other people who made silly desions...I did make a decision and it has cost me 4 years of my life and a further 5 years of bad credit..As other posters have said People where gloathing around years ago saying that the value of their hoses were worth X amount and have increased in X over a period of a few months...Now it has swung the other way and they now expect to be bailed out...I'm sorry but things don't work like that..if I was to walk into a betting shop and place a bet but then i lose can I then ask for my money back?? Id be told to go and Jump...and so should all of those people who expect to get bailed out!!

^^^^^THE RIGHT ATTITUDE!

thebigbiffo

cursai wrote: »

You cant get a fiesta for a 80 km commute to work everyday!
Im not complaining about my car loan, i can afford it. But if your mortgage is going to be paid off, im sure as well gonna be looking for my loans to be paid off. Sure ITS ONLY SIX GRAND!! WHY SHOULD I BE HELD ACCOUNTABLE FOR IT. I HAD TO BUY IT AND NOW I DONT WANT TO PAY FOR IT!

sure why didn't you just rent (i assume you were renting) closer to your job? the arguments are all the same - some s'hit you gotta buy! but your perectly serviceable car loan - even if you ended up on the dole probably - is not the same as a 300k mortgage which you will probably default on after time (along with '000's of others). it's pretty musch established that widespead defaults would be worse for the country in the long run.

you're are not comparing like with like at all or using any perspective in your argument - like most irish people it's all about whats in it for me in the short term...nobody wants to hear about the benefits in the long run if they have to look at johnny down the road paying less on his mortgage.

you didnt buy a house (for whatever reason) good for you! but thousands did and they're dragging the economy down, now you can either look at solutions to that or take the 'let them hang' attitude - what you dont realise is you'll be hanging with them.

iMax

Cheapo wrote: »

I dont fall for this Greater good of the economy....I worked in a large Multinational for 12 years paying huge amounts of Tax each year. I then decided that it was time to leave and try and set up my own business....

Unfortunately after 3 years the Business failed and I was left with tens of thousands of Debt( not blaming anyone as I made the decision to leave steady employment and risk my own venture)...coming towards the end of the Business my Doctor put me illness benefit and told me to Close the business as it was putting me into the grave...

I then went to the Social Welfare to process my Illness benefit and after many weeks they came back saying that i was entitled to no benefit as I had not paid enough tax in the previous two years - but they didn't mention the tens of thousands in tax that i paid with my previous employer...So i was left on my own with not a single cent and had the banks / credit card companies contacting me non stop demanding payment...not one bit of support from the government was offered and I was on my own to fight those clowns in the banks..

I was in a state of dis pair and ignored the doctors advice about resting etc started looking for a Job. I eventually got a new Job and have the Job ever since and after all the Debt and hassle i received it will now be paid of by the middle of next year...the Last four years have been extremely hard while paying of the debt...but I have learned a lot in those few years...mainly - always look after number one and your family cause no none else will including the government...shop where you get the best price - that includes going north - Patriotism - where was the governments patriotism when they told me to F off etc.....

So now that I should be Debt free next year, i don't wont my taxes to go towards bailing out other people who made silly desions...I did make a decision and it has cost me 4 years of my life and a further 5 years of bad credit..As other posters have said People where gloathing around years ago saying that the value of their hoses were worth X amount and have increased in X over a period of a few months...Now it has swung the other way and they now expect to be bailed out...I'm sorry but things don't work like that..if I was to walk into a betting shop and place a bet but then i lose can I then ask for my money back?? Id be told to go and Jump...and so should all of those people who expect to get bailed out!!

(hope you don't mind I put paragraphs in)

With you right up to the end but it should say "banks & developers" rather than "people", because if they'd been let go to the wall, we wouldn't be in this mess.

I heard a quote from David McWilliams the other day regarding the whole thing - "The people that matter don't mind & the people that mind don't matter"

TheZohanS

thebigbiffo wrote: »

absolutely, but as an example as to why this this would help the country:

lets say you've taken a 25% paycut. you've 25% less to spend in the economy. your house is worth 200k but you're paying a mortgage worth 300k. so you're spending more on your mortage relative to what you earn and spend within the economy. that's what this is about - not whether you want to sell or not.

Let's say you bought a house in the 90's for 150k, sold it for 300k during the boom and bought a new house for 350k and now that new house is worth 300k today.....do you want to bail out the people that made a profit by selling but are (on paper) in negative equity?

Or do you just want to help out brain dead people like Alison, first time buyers, who went ahead and bought at crazy prices when they were told it was a bad idea?

cursai

thebigbiffo wrote: »

sure why didn't you just rent (i assume you were renting) closer to your job? the arguments are all the same - some s'hit you gotta buy! but your perectly serviceable car loan - even if you ended up on the dole probably - is not the same as a 300k mortgage which you will probably default on after time (along with '000's of others). it's pretty musch established that widespead defaults would be worse for the country in the long run.

you're are not comparing like with like at all or using any perspective in your argument - like most irish people it's all about whats in it for me in the short term...nobody wants to hear about the benefits in the long run if they have to look at johnny down the road paying less on his mortgage.

you didnt buy a house (for whatever reason) good for you! but thousands did and they're dragging the economy down, now you can either look at solutions to that or take the 'let them hang' attitude - what you dont realise is you'll be hanging with them.

I have to work away from my family! Why rent when i can buy and pay the same amount. Never mind that anyway. The point is people have to be responsible for their own mistakes. Hang with them, i will be anyway. But ill be damned if irresponsible people get a nice house for cheap out of it whilst people like me have nothing to show for it. IM NOT PAYING YOUR MORTGAGE!! What are the financial institutions gonna do with all this debt that they've suddenly found isn't gonna be repayed. These things cant be just wiped off the face off the earth.

subway

thebigbiffo wrote: »

you're a lecturer in english literature i take it?

what a fine example of how to outline your complex and intricate argument...

wasnt mad on wasting time with you.
no one forced you, I'm not interested in givng you any of my money, you're not a charity case you're a scrounger.

that's what your asking here.

thebigbiffo

TheZohan wrote: »

Let's say you bought a house in the 90's for 150k, sold it for 300k during the boom and bought a new house for 350k and now that new house is worth 300k today.....do you want to bail out the people that made a profit by selling but are (on paper) in negative equity?

Or do you just want to help out brain dead people like Alison, first time buyers, who went ahead and bought at crazy prices when they were told it was a bad idea?

i dont think the suggestion is for an all encompassing forgiveness of everybody in negative equity and i certainly wouldn't stand by this proposal should it aid people who made vast profits and can afford their mortages (like myself).

unfortunately, yes. as much as i dislike that crazy bint she would be the type of person who would benefit from this in the short term...but seriously, you have to get by personal feelings on the matter and look at the bigger picture. more money in the economy instead of straight to bank vaults and international investors = steady growth + more jobs + less taxes + less savage budgets etc etc etc...

these economists that put their name to this article are smart guys and were by no means cheerleaders for the boom - they know what they're talking about and i for one (when i put aside petty begrudgery at how people will have their debt lowered) think the proposal makes sense...

GreeBo

thebigbiffo wrote: »

if you were married with 2 children and wanted to live an average lifestyle in your community or close to work you had no choice but to buy at boom prices. people either ignore this, convieniently forget it are not aware of it because the circumstances never applied to them.

Did these people just wake up one day with a partner, 2 kids and no home?
No they didnt. The decided that they wanted to live in a certain area in a certain style of house and live a certain lifestyle. They also chose to ignore what might happen if they had to take a pay cut or lost a job.
Do we give all ostriches this payout too?

cursai

thebigbiffo wrote: »

i dont think the suggestion is for an all encompassing forgiveness of everybody in negative equity and i certainly wouldn't stand by this proposal should it aid people who made vast profits and can afford their mortages (like myself).

unfortunately, yes. as much as i dislike that crazy bint she would be the type of person who would benefit from this in the short term...but seriously, you have to get by personal feelings on the matter and look at the bigger picture. more money in the economy instead of straight to bank vaults and international investors = steady growth + more jobs + less taxes + less savage budgets etc etc etc...

these economists that put their name to this article are smart guys and were by no means cheerleaders for the boom - they know what they're talking about and i for one (when i put aside petty begrudgery at how people will have their debt lowered) think the proposal makes sense...

THESE ECONMISTS made a 'PROPOSAL', not a concrete answer to the crisis for people. Also half of these ECONOMISTS are pandering for publicity and to sell newspaper articles. DAVID MCWILLIAMS(for instance) does not care about peoples financial troubles..only his own, which the papers are paying for!

thebigbiffo

cursai wrote: »

I whilst people like me have nothing to show for it.

this is what its really about

subway wrote: »

wasnt mad on wasting time with you.
no one forced you, I'm not interested in givng you any of my money, you're not a charity case you're a scrounger.

that's what your asking here.

looks like you cant read properly either. i'm not asking for anything, i was very clear in my posts that i would not or could not be expected to benefit from this - i have eyes and ears and a sense of perspective whilst you dont have the capacity for sound argument, just the capacity for cheap insults.

keep them to yourself if you dont mind.

Cookie_Monster

Cookie_Monster wrote: »

+1 sure if you can get it for your house why not car too.
I didn't buy a house at the stupid prices they were going for, can I have some free money for being sensible about property?

To put towards the losses on the BMW ? :pac:

Wicklowrider

cursai wrote: »

You cant get a fiesta for a 80 km commute to work everyday!

And IMO that says it all.

Of course you could. People in this country used to do more than that on honda 50's before we got soft. One good thing about this recession is there is an outside chance we will be become Irish again.

thebigbiffo

GreeBo wrote: »

Did these people just wake up one day with a partner, 2 kids and no home?
No they didnt. The decided that they wanted to live in a certain area in a certain style of house and live a certain lifestyle. They also chose to ignore what might happen if they had to take a pay cut or lost a job.
Do we give all ostriches this payout too?

did i say they didnt choose anything. whats your point.

if you lived your life expecting your job to be gone in the morning the country, continent and world wouldn't have much of an economy to save now would it.

our capitalist society (you know, one of the only systems that's proven to work for the most people) insists you buy stuff from the money you earn or the whole thing breaks down - it's happening now, but we're so caught up in the individual that seeing whats good for the herd is impossible.

cursai wrote: »

THESE ECONMISTS made a 'PROPOSAL', not a concrete answer to the crisis for people. Also half of these ECONOMISTS are pandering for publicity and to sell newspaper articles. DAVID MCWILLIAMS(for instance) does not care about peoples financial troubles..only his own, which the papers are paying for!

cant stand mcwilliams myself to be honest but opinion and a free media is what makes democracy work regardless of who benefits.

Wicklowrider

Wicklowrider wrote: »

And IMO that says it all.

Of course you could. People in this country used to do more than that on honda 50's before we got soft. One good thing about this recession is there is an outside chance we will be become Irish again.

Indeed, a Fiesta and every other car on the road today in serviceable condition is more than capable of a 50 miles spin twice a day.

drdeadlift

**** like this will split the country down the middle.

I am one of the few people who chose not to buy a house,they seemed over priced.But for some odd reason young Irish people had a fire up their asses to get on the property ladder,i couldn't understand that urge,i think a medal of success came with it.

And i am not going to pay for some clowns mistake.

cursai

thebigbiffo wrote: »

this is what its really about




looks like you cant read properly either. i'm not asking for anything, i was very clear in my posts that i would not or could not be expected to benefit from this - i have eyes and ears and a sense of perspective whilst you dont have the capacity for sound argument, just the capacity for cheap insults.

keep them to yourself if you dont mind.

Your taking my answers out of context! No direct personal attacks here. When i say 'you', i mean your argument and what it represents.
Anyway. Its about equality and fairness. The car loan argument still stands. Thats €6000 euro i could be spending in the economy. Why should i not get the same treatment...because my loans are TOO small!

subway

thebigbiffo wrote: »

looks like you cant read properly either. i'm not asking for anything, i was very clear in my posts that i would not or could not be expected to benefit from this - i have eyes and ears and a sense of perspective whilst you dont have the capacity for sound argument, just the capacity for cheap insults.

keep them to yourself if you dont mind.

its a public forum, so ill post comments as a i like, use the report button if you feel upset.
i laughed at your "no choice but to buy" comment as its one of the most stupid things i've read in a while.

so tell me, (since you pretend to want to give your money to other people), how does it benefit the economy for me to handover my savings and future earnings to someone else to pay their mortgage.
how is it better for the economy for them to have more spare cash and me to have less?

and to be upfront with you, my opinion of you (and all the others that are calling for this) is that you do want to get money off the mortgage yourself. whether you use mental gymastics to fool yourself or not with doublethink.

to give you my opinion on what should be done, its quite simple, reform bankruptcy.
cant pay? give it all up and start again. same as everywhere else. not this stupid, let the idiots keep the crap they can't afford / paid too much for and socialise the cost

cursai

RoverJames wrote: »

To put towards the losses on the BMW ? :pac:

Wrong Mazda 6 02!

Tipp Man

The economists are making far too little of the moral hazard element of this. If this was implemented it would create one of the biggest ever divides in our society, because morally it is completly wrong

They are also way overblowing how much positive effect this will have on the economy, this will cost billions but I think we would never see that money back in the economy

cursai

RoverJames wrote: »

Indeed, a Fiesta and every other car on the road today in serviceable condition is more than capable of a 50 miles spin twice a day.

Okay fine. But i got this car because i wanted a decent car. I can afford it, its the ONLY loan i have. Its a SMALL manageable loan. Should I get my loan dropped?

cursai

cursai wrote: »

Wrong Mazda 6 02!

Have a look at my post again, then have a look at who I quoted, then have a look at their signature for the Bimmer for sale
Then withdraw your wrong comment

thebigbiffo

cursai wrote: »

Your taking my answers out of context! No direct personal attacks here. When i say 'you', i mean your argument and what it represents.
Anyway. Its about equality and fairness. The car loan argument still stands. Thats €6000 euro i could be spending in the economy. Why should i not get the same treatment...because my loans are TOO small!

no i was quoting subway with that answer - he/she got personal.

but yeah your right really: the amount is too small...

subway wrote: »

its a public forum, so ill post comments as a i like, use the report button if you feel upset.
i laughed at your "no choice but to buy" comment as its one of the most stupid things i've read in a while.

so tell me, (since you pretend to want to give your money to other people), how does it benefit the economy for me to handover my savings and future earnings to someone else to pay their mortgage.
how is it better for the economy for them to have more spare cash and me to have less?

and to be upfront with you, my opinion of you (and all the others that are calling for this) is that you do want to get money off the mortgage yourself. whether you use mental gymastics to fool yourself or not with doublethink.

to give you my opinion on what should be done, its quite simple, reform bankruptcy.
cant pay? give it all up and start again. same as everywhere else. not this stupid, let the idiots keep the crap they can't afford / paid too much for and socialise the cost

yep, using insults to get your point across is perfectly acceptable as long as i dont report you - you're so childish i wouldnt allow you on the internet without supervision tbh...and btw: you still haven't outlined what you found so hearthily amusing about the 'didnt have a choice to buy' comment? i'm assuming you wouldnt have the capacity to argue the point so i'll leave it with you.

first, how in hell would your life savings be affected? your future earning would go up as the economy improved...i'm sure you havent a clue what you're talking about now...it's better for the economy for anyone to have spare cash, this isn't about 'you' or 'them'...

dont psycoanalyse me based on my agreement with newspaper article - another example of gross immaturity and stupidity on your behalf.

on bankruptcy you are correct - for once

turbot

Instead of debt forgiveness... I think a smarter approach could be "debt compassion".

This means the country doesn't take responsibility for their individual debts, (i.e. being paid off via long term taxes) but seeks to structure their finances to allow them to survive and progress.

For example, just like foreign workers have to pay emergency tax until they are officially registered, I think the tax bands should be restructured for people who are bankrupt, to give these individuals the ability to live well, albeit less luxuriously, and pay their dues over a sustained period of time. For example, if 20% was added to their upper rate of tax, and earnings above €100k a year were taxed at 75%, most people would still be able to maintain a reasonable standard of living. I think this debt compassion tax structure should allow them to earn their way out of whatever they owe, if possible.

This way, a sustained tax take over time will be possible to help offset the costs of government borrowing to deal with such bad debts. This also gives people a simple and clear structure, and an no income penalty until their income exceeds the bottom tax band.

I think this is the compassionate approach, allowing people to live well, albeit less luxuriously, while they are as responsible for their actions as is feasible.

thebigbiffo

turbot wrote: »

Instead of debt forgiveness... I think a smarter approach could be "debt compassion".

This means the country doesn't take responsibility for their individual debts, (i.e. being paid off via long term taxes) but seeks to structure their finances to allow them to survive and progress.

For example, just like foreign workers have to pay emergency tax until they are officially registered, I think the tax bands should be restructured for people who are bankrupt, to give these individuals the ability to live well, albeit less luxuriously, and pay their dues over a sustained period of time. For example, if 20% was added to their upper rate of tax, and earnings above €100k a year were taxed at 75%, most people would still be able to maintain a reasonable standard of living. I think this debt compassion tax structure should allow them to earn their way out of whatever they owe, if possible.

This way, a sustained tax take over time will be possible to help offset the costs of government borrowing to deal with such bad debts. This also gives people a simple and clear structure, and an no income penalty until their income exceeds the bottom tax band.

I think this is the compassionate approach, allowing people to live well, albeit less luxuriously, while they are as responsible for their actions as is feasible.

i agree with this...

although i very much agree in general with the article and its sentiments i'm not so sure that 'total' forgiveness is the way to go. a ten year moratorium would be just as effective.

either way - i think the issue of possible mass defaulting needs to be addressed in some way asap because its going to be a huge issue in the next few years

cursai

RoverJames wrote: »

Have a look at my post again, then have a look at who I quoted, then have a look at their signature for the Bimmer for sale
Then withdraw your wrong comment

I don't understand?...................oh right Bimmer. Beamer NO?