STATES OF MUDDY WATERS: The Kite is Taller Than the Rainbow!

INTERNATIONAL: By 2015, two thirds of borrowers under the kitty schemes [government-sanctioned loans] were repaying their debts with the interest and even after repaying up to £19 billion, 4% of income, 1.9% of debts, and just 0.6% of GDP, the overall impact was there was still £8 billion on the books to be paid out. This is a net loss of £3.3 billion for taxpayers because the tax payer was funding the majority of the returns from interest alone!

At the same time, it appeared the lenders who are nominally in the position of funding these properties and land speculating seem to have become desensitised and complacent and didn’t mind doing business whilst servicing the debt like serfs!

As soon as the morgage debt is written off, the investor receives his fee, but nothing is ever said about why it even exists! So, how could anyone care when they know the option of writing off the debt is just a few months away?

Contrary to popular belief, it is not the poor, or any other end of the economic spectrum that are exposed to this short-term borrowing scheme, but the tax payer, and the taxpayer should be cutting their losses.

COMMUNITY: It is estimated that there are 1.7 million very large homes in Scotland alone, many lying empty, but why not exploit the asset in the medium to long term to generate income streams from rent payments, or electricity bills etc. to fund the running of these properties, with the hotel sector and restaurants a good option for future growth in an area with low unemployment or the recreational sector. The Carbon Hub for primary and secondary education, could take over some of the empty classrooms that feed into these state funded secondary schools, every few years, there would be a few hundred jobs generated in the transformation.

One open question is why the inequality in the scheme, whilst interest on mortgages is subsidised to be paid out to ‘hotel-like’ businesses – it could be as simple as creating competition between hotel tenants paying fair market rent who are paid above market rent to rent newly put-off mortgages on empty properties.

The Independent on Sunday’s excellent series on kitty-loans and mortgage payback systems was compelling and, as a reader commented: “It reminds me of 1930’s, European debt crises when the burden of debts to be written off was placed on hardworking farmers …Of course, we don’t seem to need this today!”

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