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Thread: Would a SSIA scheme for debt repayment work?

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    Politics.ie Member the_Observer's Avatar
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    Default Would a SSIA scheme for debt repayment work?

    In 2001 the then minister of finance introduced a scheme to encourage regular savings by individuals :
    For every amount saved in the scheme, the Exchequer will contribute to the individual saver’s account an additional 25% of that amount. This is equivalent to giving tax relief on savings at the standard rate of income tax.
    SSIA, SSIA's, Irish Government Savings Scheme , State, SSIA Products Finfacts Ireland

    Would a similar scheme aimed at individual debt repayment work?

    For every eur spent on servicing personal debt accrued before 2011 (we don't want people taking on additional debt to take advantage of the scheme) the government contributes an additional 25% through giving tax relief on income used to service existing debt. The scheme would run for 12-24 months.

    A lot of people are drowning in short term debt on credit cards, medium term loans etc and banks are refusing to issue long term loans to aggregate debts into a single long term repayment. Such a scheme would offer an opportunity to dramatically reduce and shorten the amount of debt owned to banks. Obviously it's expensive to the Irish state both in the lost tax revenue and in disposable incoming being redirected from the wider economy to the banks. But we can take the hit in the short term to reduce individual debt. It offers individuals the option of imposing personal short term austerity to remove the long term weight of debt that is dragging them and us down.

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    Politics.ie Member ruserious's Avatar
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    Until it effects the State coffers, personal debt will not be looked at by government, unfortunatly.
    Boycott the "Irish" Sun rag.

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    What would happen consumer spending?

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    Politics.ie Member the_Observer's Avatar
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    Quote Originally Posted by Con Gallagher View Post
    What would happen consumer spending?
    I would expect it to take a nose dive over the short term but increase over the long term as debts are repaid and the income once devoured by repayments becomes available.

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    Politics.ie Member Sync's Avatar
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    ..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
    I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now f***ing pay me.

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    Politics.ie Member the_Observer's Avatar
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    Quote Originally Posted by Sync View Post
    ..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
    It's done through tax relief on income used to service debt.

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    Quote Originally Posted by the_Observer View Post
    In 2001 the then minister of finance introduced a scheme to encourage regular savings by individuals :

    SSIA, SSIA's, Irish Government Savings Scheme , State, SSIA Products Finfacts Ireland

    Would a similar scheme aimed at individual debt repayment work?

    For every eur spent on servicing personal debt accrued before 2011 (we don't want people taking on additional debt to take advantage of the scheme) the government contributes an additional 25% through giving tax relief on income used to service existing debt. The scheme would run for 12-24 months.

    A lot of people are drowning in short term debt on credit cards, medium term loans etc and banks are refusing to issue long term loans to aggregate debts into a single long term repayment. Such a scheme would offer an opportunity to dramatically reduce and shorten the amount of debt owned to banks. Obviously it's expensive to the Irish state both in the lost tax revenue and in disposable incoming being redirected from the wider economy to the banks. But we can take the hit in the short term to reduce individual debt. It offers individuals the option of imposing personal short term austerity to remove the long term weight of debt that is dragging them and us down.
    I see lots and lots of problems with this.

    1) The Government currently spends 50% more than it receives in taxes. It has no capacity to give tax relief to anyone.

    2) Why should people who were prudent pick up the tab for those who were imprudent

    3) Those who are drowning in debt need some help, but the help they need is in money management skills, not in handouts.

    4) We need the banks to become profitable so that we can get the maximum return on our investment. The sooner they get their affairs in order, the sooner we can start selling our shares.



    You are correct to identify that we have a major debt problem in this country, and it is a problem that effects society beyond the individual people concerned in lots of different ways.

    But the solutions will have to be based on individual circumstances, and they will have to be based on people realising that they have to hand back the stuff they cannot afford.
    "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

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    Politics.ie Member Sync's Avatar
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    Quote Originally Posted by the_Observer View Post
    It's done through tax relief on income used to service debt.
    Ah ok so you want to take money out of the health service/social welfare/justice systems. To pay for this person's debt because they can't manage their affairs.
    I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now f***ing pay me.

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    Quote Originally Posted by Sync View Post
    ..........So someone owes €100 on their credit card because they can't manage their affairs, and you'd like me to pay €20 towards that debt? Um. No thanks.
    You are missing the point, either wilfully or through stupidity. There is a huge cohort of people who are technically insolvent, or who will be soon.

    Those debts will not be repaid. What is being discussed is not WHETHER you will be paying for this (ie that the burden is shared through the tax system), but HOW. The key is to ensure all this is done in an orderly way, including the State defaulting (as it must) in a way that is controlled rather than chaotic.

    As I have already indicated, I am at the end of my journey with the banks, and will shortly be losing my home. The key to this is doing so in a way that preserves my sanity.

    In my case, that will mean handing back the keys, and leaving a well paying job to go on the dole. Once that is done, the banks really can't get any more out of me. My wife and I have discussed this, and if I am to see my kids growing up, that is the only sensible course of action.


    You SYNC, no doubt want me behedded, or believe I have assets hidden under the mattress or somesuch nonsense, but the reality is that I ploughed what little savings I had into trying to keep a roof over my head (and in that regard I caution others against doing this), when frankly, I should have defaulted with the bank earlier.

    The reason I have lost 10 years of my life (and I am now too old to ever get a mortgage again)? I bought a house a couple of weeks before the property peak, because the commute to work was simply too long from where I was living.

    In essence, I have been paying a mortgage for many years, but now won't have the luxury of saying I own my own home.


    D
    Last edited by DuineEile; 24th November 2012 at 04:35 PM.

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    Quote Originally Posted by SPN View Post
    I see lots and lots of problems with this.

    1) The Government currently spends 50% more than it receives in taxes. It has no capacity to give tax relief to anyone.

    2) Why should people who were prudent pick up the tab for those who were imprudent

    3) Those who are drowning in debt need some help, but the help they need is in money management skills, not in handouts.

    4) We need the banks to become profitable so that we can get the maximum return on our investment. The sooner they get their affairs in order, the sooner we can start selling our shares.



    You are correct to identify that we have a major debt problem in this country, and it is a problem that effects society beyond the individual people concerned in lots of different ways.

    But the solutions will have to be based on individual circumstances, and they will have to be based on people realising that they have to hand back the stuff they cannot afford.


    Prudence is frankly a matter of timing. Lots of people on here think they are financial wizards, because they didn't get married or need an extra bedroom for a growing family in the years 2003 - 2008 or thereabouts.


    D

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