Brendan two years ago I was diagnosed with a heart condition. At the same time, as luck would have it, an 'Early Leaving' leaving offer arose in my company. I availed of the offer and I deposited the lump sum in a number of different institutions on fixed terms that matured at various times. It's our only family income - I am not entitled to social welfare of any kind, and I'm not due a pension until next year. I am already sick with worry wondering if the deposits are secure and how we will exist if the system collapses. I'm not in a position to assist with a bank bailout.
Make the depositors who were bailed out contribute to the retrospective guarantee?
- Thread starter Brendan Burgess
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You would be entitled to social welfare if you have no money.
While I don't agree with BB's idea of taxing depositors retrospectively, on your point about not being able to afford to pay out such a tax, you have to consider that you would have lost everything if the government didn't do the guarantee. Put it this way if you were given the choice of losing 20% of your deposits or losing them all what would you choose?
In case you don't think you are able to assist in the bank bailout. Who other than taxpayers, depositors et al are going to end up paying for this mess? That said they're not going to bring in a retrospective tax on deposits. I'm sure DIRT tax will go up when they may the announcements today and pensions will come down or be taxed more highly.
Unbelieveable.......
we really have gone through the looking glass
I am undecided whether this discussion is a prop to flag falling discussion participation in AAM or else bitter grapes at bank share losses by some?
I rarely contribute and sometimes these "long grass" views are prescient.
I removed myself from a mad property market when it was clear that all rational argument was being suffocated and disparaged all around me
I am content in my assets being offshore as the "final grab" takes place
signing off
we really have gone through the looking glass
I am undecided whether this discussion is a prop to flag falling discussion participation in AAM or else bitter grapes at bank share losses by some?
I rarely contribute and sometimes these "long grass" views are prescient.
I removed myself from a mad property market when it was clear that all rational argument was being suffocated and disparaged all around me
I am content in my assets being offshore as the "final grab" takes place
signing off
Brendan Burgess
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mic and derryman
Thanks for adding two more non arguments to the thread.
Z
z107
Guest
The snag I see with this proposal is that the 'guarantee' does not really exist (or didn't exist) as such.
Could the government have afforded to pay out the vast sums required?
The 'guarantee' was simply a perception, used to increase confidence.
If I had to pay for it, I would have just taken my money out of Irish banks sooner.
Could the government have afforded to pay out the vast sums required?
The 'guarantee' was simply a perception, used to increase confidence.
If I had to pay for it, I would have just taken my money out of Irish banks sooner.
S
scabbers
Guest
There's very few ways out of this mess we have been dropped into due to the government and banks.
This idea, while crazy, is of course an idea, and I suppose the OP deserves some sort of credit for 'out there' thinking.
An improvement may be that any money taken from depositors is paid back with 100% interest after 5-10 years (when apparently the crisis will be a distant memory and the 4 year plan will have succeeded). People won't be so worried about having their hard earned money stolen.
or
Once the gaurantee lapses, ANY money left in Irish banks may be taken and used to service the debt.
Two equally logical ideas, but equally as crazy as the first.
This idea, while crazy, is of course an idea, and I suppose the OP deserves some sort of credit for 'out there' thinking.
An improvement may be that any money taken from depositors is paid back with 100% interest after 5-10 years (when apparently the crisis will be a distant memory and the 4 year plan will have succeeded). People won't be so worried about having their hard earned money stolen.
or
Once the gaurantee lapses, ANY money left in Irish banks may be taken and used to service the debt.
Two equally logical ideas, but equally as crazy as the first.
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Brendan Burgess
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Hi Scabbers
That is an interesting concept. The 4 year time-frame is too short. But the principle is worth exploring.
The retrospective guarantee saved the depositors from losing a lot of money and everything in the case of Anglo and Irish Nationwide.
charge them 10% and 50% of their deposits as of Sept 08.
But issue them with some new form of bond in their place.
The problem is that the bond would still form part of the national debt.
So it would have to be a non interest-bearing bond.
And there could not be a fixed redemption date.
So it would be an open-ended, non-interest bearing bond. Effectively the government would be saying: "You have to contribute towards the cost of the guarantee and if we are in a position to refund this contribution at some time in the future, we will do so."
That is an interesting concept. The 4 year time-frame is too short. But the principle is worth exploring.
The retrospective guarantee saved the depositors from losing a lot of money and everything in the case of Anglo and Irish Nationwide.
charge them 10% and 50% of their deposits as of Sept 08.
But issue them with some new form of bond in their place.
The problem is that the bond would still form part of the national debt.
So it would have to be a non interest-bearing bond.
And there could not be a fixed redemption date.
So it would be an open-ended, non-interest bearing bond. Effectively the government would be saying: "You have to contribute towards the cost of the guarantee and if we are in a position to refund this contribution at some time in the future, we will do so."
Brendan Burgess
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But if the guarantee had not been introduced retrospectively, the banks would have collapsed so you would not have got your money out.
of course, if you had taken your money out before the guarantee was increased, then this would not apply to you.
Brendan
Retrospective taxes doesnt sound constitutional. Is it ? Can you give an example of such a tax which has been applied anywhere else or in this country ? How can you tax someone on money they were free to spend before the tax came about ? E.g If they withdraw it before such a retrospective tax came into force then its as good as spent and untaxable isnt it ? You would expect them to then pay a tax on money they then dont have and for which it was impossible to make a provision for ?
Why dont we retrospectively take away/ punitively tax to 90% the pensions and golden parachutes of the financial regulator/bank and building society bosses etc and retrospectively give the government a big fat pay cut going back ten years making them to pay the money back ? We sure could do a lot of things ''retrospectively''' if the idea of taxing people ''retrospectively'' was valid. Or does your idea Brendan only apply to those with the misfortune of having left their money ''patriotically'' in the irish banks ?
Why dont we retrospectively take away/ punitively tax to 90% the pensions and golden parachutes of the financial regulator/bank and building society bosses etc and retrospectively give the government a big fat pay cut going back ten years making them to pay the money back ? We sure could do a lot of things ''retrospectively''' if the idea of taxing people ''retrospectively'' was valid. Or does your idea Brendan only apply to those with the misfortune of having left their money ''patriotically'' in the irish banks ?
Retrospective taxation is a very slippery slope. It would finally erode what little trust remains in the institution of Irish government of any political hue.
Many say that introducing a property tax pre-2000 would have prevented the bubble. Should we retrospectively apply a site tax to owners for that period?
Once the notion of retrospective taxation is on the table, the fear is that anything like this is open for discussion. This idea would be the thin end of the wedge.
Many say that introducing a property tax pre-2000 would have prevented the bubble. Should we retrospectively apply a site tax to owners for that period?
Once the notion of retrospective taxation is on the table, the fear is that anything like this is open for discussion. This idea would be the thin end of the wedge.
S
scabbers
Guest
I'm afraid you took my comment the wrong way, which is not surprising.
Before the gaurantee was put in place, numerous government and banking officials, as well as many so-called economics 'experts', were vocal in their support and faith of Irish banks, the banking system and ireland's ecomony in general (some even suggesting that it was a great time to buy bank shares/houses etc ....I'll mention no names).
Retrospectively charging depositors is a sure fire way to cause civil unrest on a large scale. It's reckless in the extreme and it's not exactly encouraing to see someone in your position put the idea in the public domain.
If we're looking at retrospective charging, lets get CAB involved and see if they can
- restrospectively take back any bonuses given to any high ranking bank official during the last 10 years
- take back any profits made on Irish banking shares (as the share prices were not a true reflection of the stability of the banks)
- Take back any salary paid to an employee in the Financial Regulator and the Central bank over the past 10 years, as it has become obvious they were not doing their job.
Brendan Burgess
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Hi Kaplan
No, I haven't.
In my opinion, the primary focus now should be to get down the national debt to stop the country going bankrupt and to allow the state to honour the guarantees to people who lent us money in the light of those guarantees.
The issue is "Who pays?". I am suggesting that those who benefitted from a retrospective guarantee should contribut to the cost of that guarantee. Those who invested in the light of existing guarantees should not run the risk of the state defaulting on those guarantees. Additionally, the people who did not directly benefit from those guarantees, should not have to bear the full cost of them which is crippling us.
Brendan
No, I haven't.
In my opinion, the primary focus now should be to get down the national debt to stop the country going bankrupt and to allow the state to honour the guarantees to people who lent us money in the light of those guarantees.
The issue is "Who pays?". I am suggesting that those who benefitted from a retrospective guarantee should contribut to the cost of that guarantee. Those who invested in the light of existing guarantees should not run the risk of the state defaulting on those guarantees. Additionally, the people who did not directly benefit from those guarantees, should not have to bear the full cost of them which is crippling us.
Brendan
Brendan,
Well you probably need to consider money supply. What you suggest is a massive contraction in money supply using a process which apart from being inequitable and probably unconstitutional would destroy what's left of the banking system and economy.
As this is hardly in the common good, you might like to consider suggesting (a) the suspension of habeus corpus and the constitution (b) repudiation of EU treaties (c) exit from the Euro and (d) establishment of our own currency.
Well you probably need to consider money supply. What you suggest is a massive contraction in money supply using a process which apart from being inequitable and probably unconstitutional would destroy what's left of the banking system and economy.
As this is hardly in the common good, you might like to consider suggesting (a) the suspension of habeus corpus and the constitution (b) repudiation of EU treaties (c) exit from the Euro and (d) establishment of our own currency.
Brendan Burgess
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έτσι είναι όλο το ελάττωμά σας, τότε
Brendan Burgess
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It is, yes.
I presumed it was Greek, is there a Cypriot language?
This old thread is quite amazing. The Cypriots would do well to read it. It was quite a hot thread, a lot of people very angry at that time in 2010 which appears to be the election time too, so the pinacle of anger at FF then and how amazing that only 3 years later 2013 that support for FF is back up again.
It would be very interesting to see if people have changed their opinions on what they posted then.
We now have a concrete example of an actual tax on deposits in Cyprus. Looking back would that have been a good idea in Ireland? I've no idea. But I'd like to know.
But this I know,
1. If I were a depositer in Cyprus and the choice was lose 10% or lose it all I'd happily lose 10%.
2. If I were a depoister in one single failed bank in Cyprus I'd prefer that everybody in all banks paid 10% so that I would not lose everything. And I'd be happy in Ireland for a government to do this if there was a failed bank. (the case we actually had)
3. Banks are not, and have never been a 100% safe place to deposit money. Thanks to Jim in Switzerland yesterday who pointed out that in Switzerland since he has been there, a country renowed for it's banking safety, that 3 banks have failed since his time there and the depositors lost everything.
4. I now also know that no government deposit guarantee scheme anywhere means anything. I suspected as much as I'm too long around.
5. Even though banks are private enterprises they do not follow the rules of a capitalist society. Meaning that governments will try and not let them fail, and that their failure costs all of taxpayers and that banks should be tightly regulated. And that basically if you let bankers act freely they are no better than those who daily go into Paddy Power.
6. If taxing depositors had been a better solution than what the government actually did, then I would be happy for the governents to take 10% rather than the mess we are in (and yes I have deposits in Irish banks).