Slí Eile: The controversey generated over NAMA cannot go without some comment on this site. Some 45 economists (some of them accountants ...) endorsed an article published in the Irish Times today. It has generated some heat and controversy over on irisheconomy.ie.
Not surprisingly, Alan Ahearne, advisor to the Minister for Finance, has countered the position take by the economists.
In yesterday's Irish times, Fintan O'Toole wrote a masterly piece on NAMA getting to the core issues.
Much has been written and said about NAMA on the basis of what is known to date about Government intentions. The devil is going to be in the detail. However, it is abundantly clear, by now, that this is a massive undertaking with huge and uncertain implications for spending, taxation and borrowing.
Suppose your best friend was wiped out in a Casino session and you agreed to hand over the equivalent of six months of your annual income (90 bn divided by 180bn) as a downpayment with nothing to say how long it would be paid back and how much would be returned. Basically, you have bought your best friend's negative risk and adjusted your own savings and expenditure to make up for any shortfall in his debts. No greater love for your friends than to lay down your own future and that of future generations to redeem them from insolvency. The desperate attempts by the Political-Financial-Property Complex to see this one through Courts and Oireachtas is nothing short of amazing. And some wonder why the implementation of the 1974 Kenny Report never got through the Oireachtas.
Some things are sacred and one of them is wealth, property, land. That's why under a predominantly conservative Government which we have had straight through for decades we have not seen real and sustained progress on capital taxation, land price control and effective measures to control the financial speculation. One of the first gifts of the new Government in 1997 was to cut Capital Gains Tax in half. Any wonder we have such economic problems now.
The challenge for all NAMA critics - myself included - is to figure out a credible, workable and fair strategy to move forward in this current economic debacle. I would welcome debate through this forum on what such a strategy would entail - including those who have endorsed the letter in today's paper and some of whom have contributed to this blog site.
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