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Thread: P. Bacon: sell off semi-states to help couples in negative equity

  1. #1
    Politics.ie Member Vega1447's Avatar
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    Default P. Bacon: sell off semi-states to help couples in negative equity

    Sounds to me like the collective property of the Irish people (sem-states) being sold off to help out people who made bad decisions when buying their house.
    If semi-states are sold then the proceeds should be used for productive investment - not handouts to (some) home-owners.

    Bacon isn't finished there. "The other area we will have to look at is young people, who were encouraged into the property market by erroneous policy incentives that emphasised the likelihood of a soft landing, they have now been destroyed, financially,'' he says passionately.
    "But one way to deal with that would be for the state to realise the value of its own assets and use the proceeds from these sales to tackle the whole problem of mortgage debt,'' he suggests.
    The idea of selling off the semi-states and using the money to free up young debt-laden mortgage borrowers, is often what other people describe as a "people's NAMA''.
    For others it is moral hazard and Bacon agrees that any such scheme would have to be carefully designed to prevent money being given to those who simply can't be bothered paying the mortgage.
    "It would be a way to relieve the negative equity portion of the mortgage present in younger households,'' he explains.
    "The current circumstances are so difficult, you do have to be radical,'' he adds.
    The Interview: Economist and Government adviser Peter Bacon - Irish, Business - Independent.ie
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    Politics.ie Member HarshBuzz's Avatar
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    eh, let me see.....

    No
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    Politics.ie Member controller's Avatar
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    I do not agree with the selling off of essential services like
    • ESB
    • Board Gais
    • CIE (Rural areas would never get any service because of isolation)
    • Water

    We only have to look to the UK to see that such privatisation does not work
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    Politics.ie Member controller's Avatar
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    There was a report on RTE Radio 1 yesterday morning, saying that we have 1 Quango for every 5000 people in the state and the total wage bill is €13billion...........FFS. That is where you could get money
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    Politics.ie Member Sync's Avatar
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    First of all, I disagree with the concept on principle. I owe my debt. I chose to get a mortgage. No one else. Not my neighbour who didn't invest, not my gran who's lived in her own house for 50 years. Their taxes shouldn't pay for my debt. The assets purchased and developed with their taxes should be used to pay my debt.

    Second: If "young people" are to somehow be judged to be less competent than a 40 year old investor, then they shouldn't be allowed take mortgages out. I don't see why a 25 year old who made a bad investment should get a break when a 45 year old doesn't.

    Third:
    For others it is moral hazard and Bacon agrees that any such scheme would have to be carefully designed to prevent money being given to those who simply can't be bothered paying the mortgage.
    People aren't stupid. I remember when SSIAs came out, everyone with an ounce of sense opened one for every relative they had. Bankers opened them for friends, then paid into them themselves. However they design it, people will ensure their finances match the requirements. Hell they'd be stupid not to.
    Last edited by Sync; 14th October 2010 at 11:52 AM.
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    Quote Originally Posted by HarshBuzz View Post
    eh, let me see.....

    No
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  7. #7
    Dylan2010
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    thats what bankrupts should do, liquidate their assets. They should even be condsidering selling the motorways. However knowing the way politics work here the proceeds would just end up in keeping insane promises and propping up the dead hand of the state.

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    Quote Originally Posted by Vega1447 View Post
    Sounds to me like the collective property of the Irish people (sem-states) being sold off to help out people who made bad decisions when buying their house.
    If semi-states are sold then the proceeds should be used for productive investment - not handouts to (some) home-owners.
    I don't agree with selling state assets, as it's short termism however it's done and the consumer/ citizen never ends up with a good deal. However, at least with proposals like FG's there's some hope of return for the state.

    This proposal just seems bizarre - sell them off (at the bottom of the market) to give to people in negative equity in the hope they start spending? There's no guarantee that it would kick start spending at all - I know if I got a windfall (as Bacon didn't seem opposed to on Pat Kenny) it would pay down debt but I doubt it would change my spending habits that much. Pretty much like the banks have done on the back with his last bright idea NAMA.

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    Politics.ie Member bormotello's Avatar
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    In this corrupted country it will become developers bailout and selling state assets will be used only as justification to sell, while after selling will be completed, money will be wasted

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    After inventing NAMA as a builder/banker bail-out paid for by the taxpayer.

    The same bright spark wants us to sell off our assets too bail out more bank debt, and it is bank debt, cleverly marketed as ordinary peoples mortage.

    A scam artist of the highest order.

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