How We Blew the Boom

thebman

Sand wrote: »

Then they would be stuck paying extortionate rent. Oh right, they should just live with their mothers taking a brave stand against the market price.

Buyers didnt set the price on any individual level. They simply went to the banks looking for the loans needed to buy at the market price. They got them from the banks that assesed the risk and thought "no worries!"

And there lies the source of all our problems. The banks didn't assess properly and now we are fooked and the taxpayer has to pay because they were so sh** at what they do.

They did this because of cosy regulation. Cosy regulation has to stop!!!!

NewDubliner

Waterford Wedgwood to hasten overseas production

KPS is not buying any assets in Ireland except the stock of products. Mr Psaros said 173 of the 480 staff in Ireland would continue to work, but they would be employed by the receivers, not the new company. A consortium of local Waterford-based businessmen are in talks with the Irish government to fund construction of a new crystal factory in the area. Mr Psaros described the existing factory as “a dinosaur manufacturing plant”.

Another prestige brand falls....if you're buying 'Waterford' branded product, make sure to check where it's been manufactured.

ynotdu

gurramok wrote: »

Some people are still in denial and may dismiss the truth as scaremongering/doom mongering. People with heads in the sand are still out there!

Plenty of people still have their heads in the sand that it was Their choice to accept loans that were unrepayable should the inevitable happen,a downturn!
Those who refuse to learn the lessons of history are doomed to repeat it:mad:

djpbarry

Sand wrote: »

Then they would be stuck paying extortionate rent.

Sure, if they want to pay extortionate rent.

How all of us property-less folk have managed to survive into 2009 I will simply never know...

Sand

Sure, if they want to pay extortionate rent.

How all of us property-less folk have managed to survive into 2009 I will simply never know...

Living at home I guess, or living on the streets.

jank

Sand wrote: »

Living at home I guess, or living on the streets.

Or paying rent

Hangsangwich

well said

Sand

Or paying rent

Ah, renters - feeding the speculatory bubble with their reckless paying of the market rent. Why didnt they stop paying the rent? Renters need to take a long hard look at themselves and stop blaming the government for the bubble they caused with their creation and propping up of a property bubble

:rolleyes:

Hangsangwich

i think the Government blew the boom.
Granted, we have been paying low tax rates for many years now.
But the Government was raking in the cash with stamp duty and VAT.
In order to stay in power, succesive FF Govt's threw the money at anything that looked for it. Each year, various Ministers used to boast at how much more their departments have spent in proportion to previous years. But they were unable to pinpoint tangible improvements in the service they ewre providing. This was homean example of home economics from hell. Imagine if your wife or husband boasted to you that she/he spent 20% more money on groceries than the previous week. And then you look into the presses, and you see it is more or less the same old stuff(just with fancier labels and receipts from consultants who advised on the shopping list).
The Govt were extremely wasteful, and all departments eagerly spent up their budgeted allocations for fear of not gettting a budgetary rise the following year. Thrift and fruagality, even efficiency was ridiculed. Wastefulness was commended. Our public sector has grown and their dissipation has spread throughout society. ANd now they want to strike!

P. Breathnach

Hangsangwich wrote: »

... Granted, we have been paying low tax rates for many years now.
But the Government was raking in the cash with stamp duty and VAT...

Make your mind up. Stamp Duty and VAT are taxes.

jank

Sand wrote: »

Ah, renters - feeding the speculatory bubble with their reckless paying of the market rent. Why didnt they stop paying the rent? Renters need to take a long hard look at themselves and stop blaming the government for the bubble they caused with their creation and propping up of a property bubble

:rolleyes:

I'm not sure wether to laugh or cry at this.:pac:

eigrod

P. Breathnach wrote: »

Make your mind up. Stamp Duty and VAT are taxes.

Exactly !

FF had so many people believing over the last decade that we were paying really low taxes, which paid dividends for them at the ballot box. If only people had scratched a little below the surface.

djpbarry

eigrod wrote: »

FF had so many people believing over the last decade that we were paying really low taxes...

But a hefty chunk of the population were paying really low taxes?

djpbarry

Sand wrote: »

Living at home I guess, or living on the streets.

Wow. The situation in Kildare has obviously deteriorated quite drastically since I was last out that way 5 days ago.

thebman

eigrod wrote: »

Exactly !

FF had so many people believing over the last decade that we were paying really low taxes, which paid dividends for them at the ballot box. If only people had scratched a little below the surface.

Well you kind of hit the nail on the head there.

When most people say this what they really mean (probably without knowing it) is that we have low direct taxation and high stealth taxes.

This is what needs to change. When times are good, stealth taxes are fine. Pay a little on each purchase or a lot on big purchases I guess with houses. You can do this in good times because there is so much economic activity.

But times are bad, spending has dropped and consumer confidence is low so this can't be done anymore. We need to shift the balance to income tax and other taxes which can be depended on.

We should reduce VAT too in the budget but I don't know if they will. Better to tax people directly and have low VAT IMO. Stop people going over the border and try to reverse the trend so they come here to shop.

Hangsangwich

P. Breathnach wrote: »

Make your mind up. Stamp Duty and VAT are taxes.

the two are not mutually exclusive, you know.
we were paying comparatively low income tax and corporation tax, but there was so much economic activity that the Govt were still creaming it.
And my point was that they were just looking for ways of spending this money. Having budget surpluses was seen as a mark of over-taxation, so in order to stay in power they just wasted the money and gave exorbitant sums of money for many inefficient capital investment projects. Again, bad housekeeping.
But I agree that what seemed like low tax rates were not really as low as could have been achieved. I would not be complaining if we now could boast of having the best telecommunications and transport infrastructure and the most efficient health service etc. in Europe. But of course, we know that we fare very poorly in all these areas

Sand

I'm not sure wether to laugh or cry at this

I didnt think it was much of an argument when I heard it either.

Wow. The situation in Kildare has obviously deteriorated quite drastically since I was last out that way 5 days ago.

Id enjoy hearing your "third way" plan that doesnt involve living with your mother or on the streets and yet not feeding into the property bubble - i.e. not paying the purchase price on the property or paying the rent that attracted speculators to invest in multiple properties.

jank

So what is your point?

djpbarry

Sand wrote: »

Id enjoy hearing your "third way" plan that doesnt involve living with your mother or on the streets and yet not feeding into the property bubble...

I don't have to. I was merely countering your statement that the only two options available to anyone were to either obtain a huge mortgage or pay extortionate rent. A third option would be to pay a reasonable amount of rent and save the difference.

Of course, this all depends on what one considers to be "extortionate" rent.

Sand

So what is your point?

I was disputing the assertion made that people who took out mortgages were responsible for the fiscal crisis in the country, or were responsible for the banking corruption crisis in the country, or were responsible the incompetence of the financial regulator and the public services. All of these are public issues, of major economic concern to the public at large. Mortgages are personal issues, and not responsible for the incompetence of the major economic actors. Fianna Fail, the Financial Regulator, the banks and the public service cant weasel off the hook that easily I am afraid.

I also disputed the assertion that it is reckless to borrow anything more than you can afford to repay on the dole. Id also dispute the implication that people who are let go in this rather unprecedented global economic downturn are to blame for being let go.

I don't have to. I was merely countering your statement that the only two options available to anyone were to either obtain a huge mortgage or pay extortionate rent. A third option would be to pay a reasonable amount of rent and save the difference.

Of course, this all depends on what one considers to be "extortionate" rent.

Given the shortage of supply, and the complaints by renters in the late 90s and early 00s, and the government reports commissioned on the matter, it can be assumed that rent was considered to be extortionate. The massive investment in property speculation resulted from the high prices caused by shortage of supply.

So you can either live at home, on the street or feed into the property bubble by buying property at the market rate or renting property at the market rate, encouraging speculators buying to rent.

So Id dispute your assertion that buyers [ i notice you left out renters...] were to blame for the prices set by the market.

djpbarry

Sand wrote: »

I also disputed the assertion that it is reckless to borrow anything more than you can afford to repay on the dole.

I don’t recall any such assertion being made. What was said was that being utterly dependent on the next pay-cheque to keep your debts under control is reckless and will likely result in hardship, economic crisis or no economic crisis.

Sand wrote: »

Given the shortage of supply, and the complaints by renters in the late 90s and early 00s, and the government reports commissioned on the matter, it can be assumed that rent was considered to be extortionate.

In some cases it was, in others it was not. The price of rent varied widely depending on location (among other things). If you wanted to live in South Dublin, for example, you may well have ended up paying extortionate rent. But there were plenty of properties in other parts of Dublin going at reasonable rates.

Sand wrote: »

So you can either live at home, on the street or feed into the property bubble by buying property at the market rate or renting property at the market rate...

Sure; whichever makes the most economic sense (although as I said above, there hasn’t exactly been a ‘market rate’ for rent).

Sand wrote: »

... encouraging speculators buying to rent.

In which case supply of rental properties grows and rents fall.

Sand wrote: »

So Id dispute your assertion that buyers [ i notice you left out renters...] were to blame for the prices set by the market.

But buyers are the market? I’m not excluding renters from anything. Some people paid ridiculous amounts in rent – I’m not denying that. The point is it was not necessary for them to do so.