Madam, – Since the beginning of the economic crisis in 2008, many proposals have been put forward as the best way of stimulating the economy in a way that does not involve reneging on debt.
It appears to me that a simple solution might rest on legislation that ensures that those with existing loans taken out to purchase property prior to 2008 should be allowed, if they so choose, to repay interest only on those loans for a period of, say, five years. In this way, the number of repossessions and bankruptcies will be dramatically reduced. Further, the spending power of many individuals will be enhanced, thus revitalising the economy.
Of course, the banks and their bondholders will need to reach agreement on any such arrangement, but a delay in ultimate repayment is surely preferable to default on such loans. Most importantly, this approach is, I believe, fair, and would therefore receive the broad base of support that is essential (but lacking) in tackling the crisis. – Yours, etc,