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Nama: It Gets Worse

Smart Taxes  has not yet fully recovered from the spectacle of the rank and file of the Green Party swallowing the Nama deal in return for the Revised Programme for Government -a deal  that can never be delivered if Nama is enacted in its present form.  So although there are many things we like  in the Programme – especially site value tax  – we deeply suspect that it was conceded by Fianna Fail in the pretty certain knowledge it will never be called.

All the arguments explaining the faulty thinking and dire consequences behind the Nama deal only added to the atmosphere of fear of September last year when Lehman’s Brothers downfall seized the bond market.  It was fear and panic that hatched the current plan.  The Fianna Fail inheritors of power had never been tested by a serious crisis and in bewilderment turned for advice to the very perpetrators of the crisis – the bankers, regulators, property valuers of the financial sector.  The chorus of criticism reinforced their bunker mentality.

What of the Greens then?  Why didn’t they see through the scam and stop the robbery ?  Stockholm syndrome has to be the answer.  The Green Party parliamentarians began to identify with their Fianna Fail captors against the threatening world outside.  How else would otherwise intelligent and principled men support Nama while declaiming  “The Greens will always do the right thing”.

Yesterday, the Nama Business Plan was revealed in the Dail.  We have to say that we underestimated the sheer bravado of the Nama heist.  In the words of Karl Whelan …

It is with great reluctance, then, that I have to say that it’s now pretty hard to see this plan as anything other than a deliberate decision to show extreme forbearance to the property developers who got us into this mess in the first place.

Also, the following is now a fact. This government has told developers that as long as its in office (the latest date for an election is 2012) they will barely have to pay back any money. Interpret this fact how you wish.” (link to article)

Dr Constantin Gurdgiev had to recrunch all his figures because it just did not strike him that the developers would be funded to build out their fantasies….

Conclusion: DofF estimates and my own estimates in my previous post (see here) do not include additional roll up charge of at least Euro6.2bn!

Thus even under the DofF original projections, Nama will yield a real loss to the taxpayers.

Now, why we made this error? Because none of us on Nama-critics side could have imagined that the Government will give defaulting developers 3 years interest-free loan to sort themselves out! And yet, this is exactly what Nama appears to be doing… what else, but a ‘gift’ or a ‘rescue’ can one call an act that deed Euro6bn worth of rolled up interest to a defaulting developer?. (link to article)

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