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Posts tagged ‘Debt consolidation’

Arrears and the Paradox of Aggregation

By David Mc Williams

So we have arrived at the day when the State has to deal with the consequences of the housing binge on the balance sheet of the ordinary person. A few years ago, people who warned this day would come were dismissed as doom-mongers. Now we see what was clear all along: the real merchants of doom were those who harassed a generation of people into debt, condemning them to negative equity and unpayable mortgages. This problem has to be fixed because the economy, burdened with such huge levels of debt, cannot grow.

It’s a simple equation. If people are paying back debt, they are not spending on other things. The economy runs on the basis that, in the aggregate, my spending is your income and your spending is my income.

Therefore, if people are not spending because they are paying back debt, everyone’s income eventually falls…………………………………………

full article at source: http://www.davidmcwilliams.ie/2013/03/14/arrears-and-the-paradox-of-aggregation

Why Government could learn a lot from the world of business

By David Mc Williams

One of the many great things about teaching an economics course is that you get as many ideas from your students as you give them. The other night, one of my students, who is returning to economics out of general interest but who has a wealth of experience in turning companies around, explained what he thought the budget strategy must be in the context of turning a company around from bankruptcy.

He said that the strategy must be one where the Government is getting its house of cards sorted in order to be able to default, not in order to be able to pay its huge debts. …..

full article at source: http://www.davidmcwilliams.ie/2012/12/06/why-government-could-learn-a-lot-from-the-world-of-business?utm_source=Website+Subscribers&utm_campaign=d2fdc5d91e-22112012&utm_medium=email

One interesting point on Fiscal Compact, folks

by

One interesting point on Fiscal Compact, folks. The 1/20th adjustment rule has been interpreted widely as the rule requiring states with debt/GDp ratio in excess of 60% to reduce their debt levels by 1/20th of the gap between their existent debt level and the 60% bound. However, the Treaty itself states: “the obligation for those Contracting Parties whose general government debt exceeds the 60 % reference value to reduce it at an average rate of one twentieth per year as a benchmark” (page T/SCG/en5). In other words, there is a big gap between interpretation and reality.
Hat-tip for this discovery goes to Peter Mathews, TD

full article at source: http://trueeconomics.blogspot.de/

Diarmaid O Seigefriede explaines the scam !

This is an excellent comment on the article I wrote “Michael Noonan Spin and more spin!”this comment was sent in to us this by Diarmaid O Seigefriede who is currently in Spain I understand.Diarmaid’s comment I thought merits a page posting of its own so
thank you Diarmaid for your excellent explanation of how the scam is been
implemented and its consequences for every Irish family.

again thank you Diarmaid.

 

Author : Diarmaid O Seigefriede

I think we have to find simple ways to explain how this scam works and supply the solutions that actually do exist in the legal commercial framework.
One way is to explain that if you sell a debt with lets say ~5 interest rates then add on commissions and sell it again and again always adding on commissions than eventually the debt that started with maybe a ~5% interest rate can go to more than ~100% interest rates .
If your government agrees to all this fraud selling of the debt then you are tied to extortion rates of interests that can never be paid back and the lenders will steal all the assets of the country like Electricity power generation or Oil deposits etc. by insisting on state selling of assets at cents on the dollar
That’s how Greece is being skinned alive .

For Ireland we taking on the debts of  €90,000 Euros per person or €360,000  Euros for a family of four on top of their own debts for mortgage or cars that they will have to pay back over ~30 to ~50  years or more .
That’s results in about an extra ~€6,000 extra tax per year per worker on top of the tax they already pay .
So logically even minimum wage workers on ~€17,000 per annum  (P.A.)should theoretical start to pay their share and accept tax demands from their pay cheque of ~€6,000 and take a pay cut of or haircut of ~30%in their wages .
Needless to say lots would rather go on the dole and get the ~€12,000 on the dole instead .
That’s why the last regime made under 25 only get €6,000 P.A. So as to prepare the way to cut the dole down to €6,000 PA for all
However its safe to assume it will be fudged  and then the other higher earners will be charged closer to ~€10,000 extra tax per year to make up for the low earners not paying their part to this new debt .

The Government knows it cannot pay these debts without taxing the people to death
That’s where scam no 2 kicks in the present government will agree to sell the debt multiple times for its cut of the action and the debt will rise like a mountain not getting paid back while FG and Labour hacks coins it  on commissions and bungs .
The next government or towards the end of the term of this regime will see the demands for the sale of all state assets to pay these even more higher debts that will mean every person in Ireland will have to pay back closer to €1,000,000 per head in debt that are to be  paid back in huge tax rises  and  taxes over ~50 to ~100 years .
That’s the future scenario the FF , FG ,Labour ,SF ,Socialist Workers party and Greens would all try to do to  paint us into that corner as they gorge on the feeding frenzy of commissions and bungs reselling  Irish sovereign debt
However there is a huge flaw in their program .
We the people could simply say “we the people did not vote for this tax or debt so send the bill to the people who signed actually  the contracts “
That would send the bills to  last government and this new lot and let them pay it all.
Needless to say if that happened the last governments and this regimes  ability to pay these billions is Nada ZIP squat
They would all go bankrupt in the bankrupt court and the debt would default as a normal unpaid debt and not be a sovereign debt .
Later we could write books and songs and poems  on how we had to help the ex governments ministers with our charity to pay their household bills for doing us the great honour of falling on their swords and saving the Irish  peoples from hell on earth .
Now lets say we all gave €10 Euros to the big hat per year for this new charity called Ex Ministers  starvation fund  that €40,000,000 Euro’s per year .
That’s surely enough to keep two Dail load of ministers in food and lodging and would save each one of us finding more than ~€6,000 Euro extra tax a year for each of us  .
Who knows even Cowen might lose weight on that tight household budget .

The Debt Generation,



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