The Frontline

[Declan]

The problem we have is that as a democracy

Was with you until this
Didn't realise that about their reluctance to commit their proposals to paper etc.
Anyway on your first point - my understanding is that it's not forgiven but rather "parked " for 10 years and then brought back in. So yes increasing negative equity in the short term alright but my understandig that it is framed within an overall economic package to try and get more spending power into the economy.
Mmm - not sure about your assumption that it would discourage people from declaring extra income - ( granted our national prediliction to tax evasion/avoidance may indicate your thesis is right but given the extraordinary circumstances we are in I'm inclined to think that most people would try and play by the rules - maybe I'm naive.
And also I don't think everyone would jump aboard the bandwagon - Why do people generally take out a mortgage? To hopefully end up one day owning their own place so is there not a way of ringfencing the availability? I don't know but worth examining maybe.
Your point re interest rates is well made alright but the banks as they are called aren't lending now anyway.

If a rigourous examination of it is given, and included in this I mean unintended consequences like you've described above are deemed to make it unworkable so be it but at least can it be incuded in any discussion we have particularly around personal bankruptcy laws etc that are needed   

[Lone Shark]

Even though it would cost money, as a taxpayer I'd be happy enough with measures which saw people delay paying for their property, provided that their debt is the type of debt that's realistic for their career prospects. (For example while I'd love to keep believing that I can achieve anything, if I had a million euro mortgage around my neck now, I simply don't have, nor will ever have, the capacity to service that debt.)

However I get the feeling that's not what these New Beginning lads are after. The gist seems to be that at no point will you ever pay more than 35% of your net income, and in most cases that won't even pay off the interest on a mortgage from now until forever, never mind make a dent in the capital. I'm guessing - obviously I can't be sure - that if you said to the Frontline audience last night that they could keep their properties, would be forced to live a frugal but not Spartan lifestyle, and any debt left over would be a charge on the house, I don't think they'd be interested. These people, in a lot of cases (Yer wan last night spending €50 per week on make up!) seem to want to keep the property, lose a big chunk of the debt, and keep living as if it's 2006.

It should be one of two things - if the person has a realistic chance of paying off the debt, I'm all for deferring - not writing off - some of their debt until later, at a fair interest rate. If they don't, then they should be able to go bankrupt, lose all assets including any private/occupational pensions, and then start fresh. I know that would cost the taxpayer money, but that I'd be willing to pay for. Not to keep Celtic Tiger cubs in the mansions that they think they're entitled to.

By the way

The problem we have is that as a democracy

Was with you until this
Didn't realise that about their reluctance to commit their proposals to paper etc.
Anyway on your first point - my understanding is that it's not forgiven but rather "parked " for 10 years and then brought back in. So yes increasing negative equity in the short term alright but my understandig that it is framed within an overall economic package to try and get more spending power into the economy.
Mmm - not sure about your assumption that it would discourage people from declaring extra income - ( granted our national prediliction to tax evasion/avoidance may indicate your thesis is right but given the extraordinary circumstances we are in I'm inclined to think that most people would try and play by the rules - maybe I'm naive.

Domestic demand is not worth schyte to us as an economy. It's very important to individual retailers and service providers, but looking at the economy as a whole, we are excessively indebted and need to consume less and pay down our debt more. If consumer A gets an extra €100 into his wallet because he's deferred some of his mortgage till later, he spends that €100 with retailer B, who gets to keep his margin of €10, and will in turn pay down his debt with that. If all of the €90 stays in the domestic economy on local wages, local inputs and taxes, then it's a zero sum game. But if some of that €90 goes on foreign inputs, then we'd have been better off if person just spent the €100 on his debt obligation.

We need more international demand, not domestic. That was the mistake we made before - thought we could get rich buying and selling houses to each other, and spending money on hairdressers, masseuses, golf club memberships and Spa treatments with the proceeds.


As for the tax thing, I'm completely of the opposite view. I'm self employed and I always try and put in a fair return. I'll claim for every mile I drive to every match I go to, I certainly don't want to pay a cent more than I have to, but all income gets included, despite much of it coming from abroad. The amount of people who look at me as if I'm some kind of idiot for doing so suggests to me that my view is not widely held. 

[Orangemac]

FG will kick the can down the road on this. Mish mash of half baked ideas, quango or two set up to look at debt resolution, protection for homeowners blardy blar.

Bring in a 21st bankruptcy system where people can hand back the keys, work out a payment plan for 3 years with the bank where they are on a blacklist and can't borrow and after that they start with a clean slate and can get on with their lives.

There is huge mental strain on a lot of people who would gladly go down this route. A certain amount of writeoffs on property has already been factored into banking calculations anyway. If you cannot realistically afford mortgage payments you should not keep your house, it is not the end of the world to rent, thousands of people do it and seem to manage.

[muppet]

FG will kick the can down the road on this. Mish mash of half baked ideas, quango or two set up to look at debt resolution, protection for homeowners blardy blar.

Bring in a 21st bankruptcy system where people can hand back the keys, work out a payment plan for 3 years with the bank where they are on a blacklist and can't borrow and after that they start with a clean slate and can get on with their lives.

There is huge mental strain on a lot of people who would gladly go down this route. A certain amount of writeoffs on property has already been factored into banking calculations anyway. If you cannot realistically afford mortgage payments you should not keep your house, it is not the end of the world to rent, thousands of people do it and seem to manage.

I honestly think that they are kicking this particular can down the road at the moment because it is the least of their worries.

Remember in the not so distant past when no one more would even admit there was a problem?

Look at the language being used recently:

12 October 2011 BERLIN - Soros warns euro crisis could destroy world financial system

Billionaire investor George Soros and some 100 former European dignitaries Wednesday published an open letter warning that the eurozone debt crisis could bring down the global financial system

12 October 2011 - WSJ: Getting Serious About Europe's Banks

Euro-zone heavies admit what markets have known all summer.

11 October 2011 - Trichet warns EU sovereign debt has become "systemic"

Europe's top financial watchdog warned Tuesday that the Euro zone's sovereign debt crisis has become systemic and threatens global economic stability unless decisive action is taken urgently.

11 October 2011 - Washington Times: European unity crumbling in debt crisis

[Massey-135]

Wasn't sure where to stick this so I'll throw it in here.

http://www.rte.ie/player/#!v=1116367

Good interview with Professor Joe Lee about how things have gone wrong here, lack of leadership etc. He's pretty glowing about the GAA 23minutes in