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The economists opposing NAMA are correct in their assertion that the government cannot afford to pay more than the market value for loans/assets. This is essentially €50 billion. Yes, we cannot afford a cent more or we will be paying back for years and taxes will rise to pay it as it did in the 1970s and 1980s, when the National Debt at that time rose to 150% of GDP.
Nonetheless, solving unemployment and getting the economy growing is conditional on resolving the toxic debt situation held by the banks. Nationalising the banks would still leave this unresolved. NAMA is still the best way to do this.
However, the economists opposing NAMA are offering a blanket and total opposition to it. If the valuation of the loans is all that is an issue for them, then why couldn\'t they say they will support NAMA as long as paying only market value is inserted in the legislation? It is unhelpful and disengenous to throw the NAMA baby out with the bathwater by rubbishing the whole concept of NAMA because of the valuation issue, even though this is critical.
In any reasoned intellectual debate or industrial dispute, an attempt is made to clarify the points of agreement and resolve those at issue. Academics are famous for offering nuanced positions or conditional support for certain theories, policies and interventions. Yet outright oppositon to NAMA is now being offered by 46 economists on NAMA without any attempt for them to state on what grounds they would support it.
My belief is that the legislation needs to be changed. The complicated valuation section needs to be scrapped and a simple market value clause inserted. I\'m puzzled as to why the opposing economists did not say they would support NAMA as long as the government legislated for market value for the bank loans. They didn\'t do this which is hugely unhelpful.
The opposing economists must put weight on resolving unemployment and regenerating the economy. In order to row together on this front with the government, it can resolve its issues with about NAMA. If the government was to ammend the legislation stating that the market values is all the NAMA would pay for the toxic loans and assets, than that would be that.
The media have a huge role to play here as a broker in trying to forge a consensus. Can Prof.Lucey be asked one straight question: If only market value was paid for NAMA loans would you support it? If the answer is \'yes\'.Then, can the Minister or Alan Ahearne by asked: Given that opposing economists would agree with NAMA with a market value valuation, will you change the legislation accordingly?
We desperately need conensus. We desperatatley need to clear up the toxic debt situation of the banks at fair market value costs to the state. 400,000 people unemployed need us to do it. Our economy will stay depressed otherwise. Can we not all agree NAMA at market value. Once this is done, with agreement between economists and the government, banks should be offered this position without compromise and told they will be Nationalised if they don\'t accept. It is reasonable to conclude that they would go for NAMA which is the better option. This is the most honest and quickest way to a resolution.
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