Debt forgiveness is not a moral hazard

Regulator Mathew Elderfield, NAMA chairman Frank Daly and Justice Minister Dermot Ahern have ruled out debt forgiveness for ordinary people. All three raised the spectre of moral hazard without providing any substance to back it up.

About 80,000 households are struggling with mortgage debt. Most also have personal loans they cannot afford to repay. . If consigned to debt servitude a generation of enterprising business people – job makers – may never create another job.

What’s needed is a just, equitable and humane system whereby some, but not all, of the billions recklessly lent to ordinary people would be written off. The bit that should be written off represents that portion people have no hope of repaying, including unsecured personal loans, credit card debt, personally guaranteed business loans and unaffordable negative equity.