Good bank. Bad bank. Nationalised bank. NAMA-bank. Take your pick – it all ends up as a great big, monstrous pile of debt that has to be paid off or written off.

The ideal way for this (circa) €90 billion worth of toxic property debt to be cleared would be if someone simply bought all the useless tracts of land, unfinished office blocks, shopping malls, ghost estates, etc.

From everything I read and hear about NAMA, I believe that this is what the Minister for Finance is counting on, not to mention the rest of the Government.

Unfortunately, none of us should expect Irish property markets to return to 2007 prices until all the ingredients of another property bubble have been created.

How? Via cheap, plentiful mortgage credit; high, rising incomes, low taxes and a great swell of madness personified by vast numbers of people thinking that borrowing huge sums of money to buy property is a sure fire way to generate wealth.

Do you see any of those ingredients? No, me neither.

Instead, we see (and not just here), falling incomes, rising unemployment, higher taxes and a soaring national debt.

That debt is being fuelled by borrowings of €400 million a week just to meet day-to-day Government spending and the dole payments for 440,000 unemployed workers.

As I write, our national debt is now nearly €68.3 billion – up from a mere €24 billion at the end of 2007 and €43 billion at the end of 2008 according to the National Treasury Management Agency.

There is no ‘genuine’ recovery yet. The rise of stock-markets since March has been inspired by government debt stimulus packages around the world and by massive cost cutting by corporations.

Some commentators are particularly worried about the Chinese bubble economy as they are about the collapsing American one.

Nor is there sustainable, consumer demand. There are far more people around the world still losing their jobs than finding new ones. Profits have collapsed. Inventories are still huge.

Recently I read an article, written in 1955 by the respected free market Austrian School economist and author Percy Greaves titled ‘Does Government Spending Bring Prosperity?’ – read it online at

In clear and precise prose, he shows how our Government’s NAMA intervention and all the other borrowing and taxing they’ve done is unlikely to ‘solve’ our terrible economic crisis, or facilitate an economic recovery:

He writes: “When the Government raises the money it spends by borrowing savings or taxing its citizens, it merely transfers spending power from private owners and earners of the money to the political spenders in power.

“This creates no new wealth. It reduces the amount private citizens can spend while increasing the amount government can spend.

“With less money in their pockets and bank accounts, private individuals and corporations must reduce the amounts they spend or invest…

“Money spent by governments cannot create any more jobs or produce any more wealth than it can when spent by private persons. In fact, it creates less, because both the tax collectors and tax spenders must be paid a commission.

“Their labours add nothing to the wealth of society. The shift of the money from private citizens to political spenders must result in fewer productive jobs.”

He might have had the Irish bail-out of the banks and builders in mind when he wrote the following:

“Political spending also changes the whole pattern of the nation’s productive forces. If the government spends its money by giving out subsidies to one privileged group, the productive facilities of the country are then partially directed toward satisfying the desires of that group instead of the desires of those who originally earned the money.”

If anyone asks you what NAMA means, you should quote Percy Greaves.

NAMA, you can tell them, is just another manifestation of how we have allowed the Government to misspend our earnings, our savings and the future earnings and savings of our children and grandchildren, “to add nothing to the wealth of society.”

We should have had the courage to demand that the insolvent banks be allowed to go bust a year ago.

Then they, and we the people, as well as the government would have had to face, head on, the consequences of the foolish mistakes and the mal-investments and excesses of the Celtic Tiger bubble era.

Instead, the Government, in collusion with the ECB has decided to use NAMA to postpone the day of reckoning. A day that I reckon could last at least a generation.

That’s what NAMA really means.


Jill Kerby welcomes reader’s letters. Please write to The Munster Express,

37, The Quay, Waterford or email

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