IMF urges debt forgiveness for indebted mortgagees

Percy1983

I best run up the credit cards again, silly me paying them off!

Graham_Devon

wotsthat wrote: »

You might argue that it's a moral injustice that some people hoard wealth that they'll never need.

There are certain levels of moral injustice however, and what you have used doesn't even come close to the level the IMF suggest.

N1AK

Mr._Pricklepants wrote: »

It's a great idea.

Instead of throwing billions per year in the bottomless pit of welfare, give the engine of the UK economy (aka the homeowners) a break and it will flow back through higher spending.

Firstly, it isn't homeowners it is mortgage holders. Secondly, I have seen no evidence to suggest giving the money to a mortgage holder encourages more spending than giving it to an owner or renter. Surely the exact opposite is true?

pqrdef

You won't get anywhere talking about moral injustice, because for decades the politicians and the media have presented homebuyers as absolute heroes, doing the right thing and guaranteed their places in heaven.

Why would they feel guilty if other people pay off their mortgage? Isn't that right? Wasn't that the whole idea?

Imagine a bank offering ethical inflation-linked mortgages, for those who really want to buy their own house.

wotsthat

Percy1983 wrote: »

I best run up the credit cards again, silly me paying them off!

There would need to be severe penalties to disincentivise this sort of reaction to debt forgiveness.

Some sort of naughty and nice list.

Graham_Devon

wotsthat wrote: »

There would need to be severe penalties to disincentivise this sort of reaction to debt forgiveness.

Some sort of naughty and nice list.

Mortgage debt nice, any other debt naughty?

Imagine the warning on the mortgage docs. "Your home may be given to you if you do not keep up the repayments".

wotsthat

Graham_Devon wrote: »

Mortgage debt nice, any other debt naughty?

Imagine the warning on the mortgage docs. "Your home may be given to you if you do not keep up the repayments".

A lot of African debt was written off. You could argue that it was morally wrong as the money was borrowed by despots running corrupt and oppressive states and so they should pay it off. Yet Bob Geldof managed to argue that it was morally right for debt to be written off.

The naughty and nice bit was to make the point that by focusing on morals we miss the key question.

Would some sort of debt forgiveness really be beneficial to the UK economy and it's inhabitants? That's the question.

Graham_Devon

wotsthat wrote: »

A lot of African debt was written off. You could argue that it was morally wrong as the money was borrowed by despots running corrupt and oppressive states and so they should pay it off. Yet Bob Geldof managed to argue that it was morally right for debt to be written off.

The naughty and nice bit was to make the point that by focusing on morals we miss the key question.

Would some sort of debt forgiveness really be beneficial to the UK economy and it's inhabitants? That's the question.

You can't ignore the moral hazard of something such as this. It's probably the biggest part of such a stimulus. And trying to compare it to Africa is poor.

Percy1983

wotsthat wrote: »

There would need to be severe penalties to disincentivise this sort of reaction to debt forgiveness.

Some sort of naughty and nice list.

I would agree, the problem is where is the line.

Somebody who runs up more than there could ever hope to pay. Naughty...

Somebody who has been paying for years, falls on hard times, uses savings to keep living and runs out of money. Nice...

Somebody who has been paying for years, falls on hard times, has no savings and is instantly in trouble, Naughty or Nice?

The_White_Horse

this is what i said 4 years ago. good of the IMF to finally catch up. what should happen is that everyones mortgage should be written down by 20-25%. This way, the banks take the losses and people have more disposable income to kick start the economy. However, to be fair, it must be applied accross the board. Nothing to do with income or the like. simply one day, everyones mortgage debt is 25% less. The end. In return, perhaps all IO mortages to be converted to repayment ones.