It might not be so bad - and we would get to start over (with hopefully a better system).
I love the idea of resetting the whole thing to default again every 50 years - though I realise in the modern age this might not be so easy.

Why on earth would you want to reward spendthrifts who bought things they couldn't afford? Make 'em pay until the pips squeak I say!
If you cancelled these people's debts they would take it as a licence to act in an even dafter fashion.
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How could we "start over" if you leave a huge percentage of the world's capital in the hands of the same people who caused the crisis?


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When will the NAMA tribunal begin?

Smash the QUANGOes!

Think of it this way:

The current plan is to transfer the liability to the State, and force the taxpayer to pay off the debt over a number of years.

Why is this preferable to wiping out the debt - as if it never existed - ans starting a new system from scratch on Monday?

It will save the taxpayer squillions, and will get the economy back on track faster, and cheaper.

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"Always do right. This will gratify some people and astonish the rest." Mark Twain

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” Napoléon Bonaparte

This idea makes the illuminiti threads look sane.

Which means that somewhere it's on the alphabet as an option. After plan X and y, that is....

Which means we'll hear McCain propose it next week...

Make that Green policy... and I'm in.. so fast you won't see me go through the door

doesnt this not benefit those that have the most debt.

So the guy who borrowed a small amount of cash to buy a small tv, not only suffers the indiginity of watching sports on a small tv but now has to face the guy down the road that borrowed alot more to buy the supersize plasma tv, the suv and the foreign holidays getting his debt written off.

I must go out and borrow over my head.

This would be the driving license amnesty on acid.

The problem with that is that the banks who have your money and mine on deposit would go bust, meaning they could not garauntee all of the money deposited with them, this in itself is massivkley inflationary, and damages the prosspects for the economy for generations.
If the state have to pay the the deposits as they do now, then I dont see any benefit of your plan, as the country just has even less monmey ion the coffers.
People will not be able to buy new cars etc. to restart the economy because the delares who sold cars on HP and dont egt the debt backl wont be able to buy any new cars, and that applies across a variety iof industries.

The State doesn't pay the deposits, the deposits are refunded by the current Banks to their customers (or transferred at par to new accounts in new Mutual Banks) leaving the current Banks holding the debt obligations. Vest all mortgages in the NTMA.

That leaves the old Banks with nothing but the debt that was created by the Banking system from thin air. From thin air they came, and back to thin air they can go.

Meanwhile a new Banks have the deposits and the customer base, and from there they can rebuild the economy in the normal fashion.

The potential downsides you propose are less likely with this scenario than they are with the current scenario - and the current scenario involves the taxpayer handing over real money to the Banking system to pay off imaginary debts.

Call it the Ctrl-Alt-Del approach to rebooting the economy.

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"Always do right. This will gratify some people and astonish the rest." Mark Twain

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” Napoléon Bonaparte

Yes, it rewards the most profligate, while punishing the prudent. Good call.

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Never let the best be the enemy of the good.