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IMF - One simple fact

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  • 07-11-2010 6:26pm
    #1
    ninty9er
    Registered Users Posts: 9,366 ✭✭✭


    This is a short one for the benefit of those starting threads here there and everywhere:

    The IMF does not make cuts; it tells a government to go find x amount of cuts/revenue or it will not turn the credit tap back on.

    Therefore the IMF makes no policy decisions, it forces governments to.

    That will be all.


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    #2
    ntlbell
    Registered Users Posts: 16,288 ✭✭✭✭ntlbell


    There was a spokesperson on newstalk. he said IIRC they can suggest where the cuts have to be made from as a condition of been given the money no?

    e.g. cut SW by 40% brings down cost of PS by 40% etc and if the cuts are not made by a certain time no more money comes.

    Is this not the way of it?


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    #3
    RichardAnd
    Registered Users Posts: 3,630 ✭✭✭RichardAnd


    I'd just add that the IMF have no power to make a government do anything. They can be told to F**k off which is what Argentina did in the early 2000s.

    Other than that, this should be a sticky as the IMF as grossly misunderstood on these baords.


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    #4
    cson
    Registered Users Posts: 14,417 ✭✭✭✭cson


    RichardAnd wrote: »
    I'd just add that the IMF have no power to make a government do anything. They can be told to F**k off which is what Argentina did in the early 2000s.

    Other than that, this should be a sticky as the IMF as grossly misunderstood on these baords.

    And they defaulted.

    Not saying it's not an option for Ireland [certainly would appear to be one of the more palatable options imo] but if Ireland were allowed to default a lá Argentina you'd be talking a possible collapse of the Single Currency notwithstanding our relative insignificance in the EU.


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    #5
    Sandvich
    Closed Accounts Posts: 1,251 ✭✭✭Sandvich


    ninty9er wrote: »
    This is a short one for the benefit of those starting threads here there and everywhere:

    The IMF does not make cuts; it tells a government to go find x amount of cuts/revenue or it will not turn the credit tap back on.

    Therefore the IMF makes no policy decisions, it forces governments to.

    That will be all.

    ... and destroys economies doing so.


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    #6
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Sandvich wrote: »
    ... and destroys economies doing so.

    Our economy is already destroyed ...


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    #7
    cson
    Registered Users Posts: 14,417 ✭✭✭✭cson


    Sandvich wrote: »
    ... and destroys economies doing so.

    I think you'll tend to find that Economy's who require IMF assistance were well destroyed before they sent the SOS.


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    #8
    istabraq
    Closed Accounts Posts: 82 ✭✭istabraq


    I would have a feeling that the IMF are already involved but its not being announced this explains why budget cuts/savings have jumped so dramatically


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    #9
    LevelSpirit
    Closed Accounts Posts: 228 ✭✭LevelSpirit


    Id like to add one more thing.
    When did everybody in Ireland become a fuking economist. Was that when i was sleeping one night?


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    #10
    cson
    Registered Users Posts: 14,417 ✭✭✭✭cson


    LevelSpirit wrote: »
    Id like to add one more thing.
    When did everybody in Ireland become a fuking economist. Was that when i was sleeping one night?

    Topic du jour; people have an interest in it.

    Get over it. ;)


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    #11
    Carra23
    Registered Users Posts: 476 ✭✭Carra23


    istabraq wrote: »
    I would have a feeling that the IMF are already involved but its not being announced this explains why budget cuts/savings have jumped so dramatically


    That's a good point there. Government were quoting cuts of 6/7 billion and you could excuse them for being off a little but for it to double is a bit odd


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    #12
    Superlativeman
    Closed Accounts Posts: 61 ✭✭Superlativeman


    ninty9er wrote: »
    This is a short one for the benefit of those starting threads here there and everywhere:

    The IMF does not make cuts; it tells a government to go find x amount of cuts/revenue or it will not turn the credit tap back on.

    Therefore the IMF makes no policy decisions, it forces governments to.

    That will be all.

    Tell that to Nigeria.

    Also, everything you said is correct, but why did the Copenhagen treaty fall apart? Because the IMF were telling third world countries to make these cuts, but they didn't tell them that these taxes would be paid to them directly.


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    #13
    ntlbell
    Registered Users Posts: 16,288 ✭✭✭✭ntlbell


    Carra23 wrote: »
    That's a good point there. Government were quoting cuts of 6/7 billion and you could excuse them for being off a little but for it to double is a bit odd

    the reason it went from 3/4 to 6/7 this year is because the interest rates on the bonds went so high.

    They obviously thought if they showed the markets they meant buisness the market would respond but the day after it the rate was still over 7%. they simply don't want to know about ireland anymore.


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    #14
    ninty9er
    Registered Users Posts: 9,366 ✭✭✭ninty9er


    ntlbell wrote: »
    the reason it went from 3/4 to 6/7 this year is because the interest rates on the bonds went so high.

    I think that deserves a similar thread.


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    #15
    dan_d
    Closed Accounts Posts: 2,819 ✭✭✭dan_d


    I suggested to Scofflaw by PM...but what do people think of a sticky/mega thread, answering all IMF related queries? Would that be possible? The number of threads that are started with the question "what do the IMF do" or "what will happen if they come into Ireland" or similar must be averaging one a week, minimum. The same answers are being given over and over again.Might be good to have one source of info that we could refer them to....

    Could possibly consider this for the NAMA related queries too...though they are being asked less and less...

    Agreements anyone?? Thoughts??


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    #16
    liammur
    Closed Accounts Posts: 3,461 ✭✭✭liammur


    ninty9er wrote: »
    This is a short one for the benefit of those starting threads here there and everywhere:

    The IMF does not make cuts; it tells a government to go find x amount of cuts/revenue or it will not turn the credit tap back on.

    Therefore the IMF makes no policy decisions, it forces governments to.

    That will be all.

    They take a more proactive role that you suggest. They will to put it politely 'recommend' the cuts to the government.


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    #17
    ninty9er
    Registered Users Posts: 9,366 ✭✭✭ninty9er


    liammur wrote: »
    They take a more proactive role that you suggest. They will to put it politely 'recommend' the cuts to the government.

    I can politely "recommend" cuts for a large organisation too, but that doesn't stop the people who vote in it (me being only one) telling me politely to **** off.

    So regardless, the Dáil can refuse.


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    #18
    liammur
    Closed Accounts Posts: 3,461 ✭✭✭liammur


    ninty9er wrote: »
    I can politely "recommend" cuts for a large organisation too, but that doesn't stop the people who vote in it (me being only one) telling me politely to **** off.

    So regardless, the Dáil can refuse.

    Yes, they can tell you and I where to go, but they won't be able to tell their lender of last resort where to go, or there will be no fat pensions every 2 weeks.


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    #19
    Scofflaw
    Registered Users Posts: 23,283 ✭✭✭✭Scofflaw


    dan_d wrote: »
    I suggested to Scofflaw by PM...but what do people think of a sticky/mega thread, answering all IMF related queries? Would that be possible? The number of threads that are started with the question "what do the IMF do" or "what will happen if they come into Ireland" or similar must be averaging one a week, minimum. The same answers are being given over and over again.Might be good to have one source of info that we could refer them to....

    Could possibly consider this for the NAMA related queries too...though they are being asked less and less...

    Agreements anyone?? Thoughts??

    And my apologies for not replying - I have a half-written answer sitting in my outbox. I'll take this opportunity to create a sticky using this thread, I think.

    moderately,
    Scofflaw


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    #20
    LevelSpirit
    Closed Accounts Posts: 228 ✭✭LevelSpirit


    dan_d wrote: »
    I suggested to Scofflaw by PM...but what do people think of a sticky/mega thread, answering all IMF related queries? Would that be possible? The number of threads that are started with the question "what do the IMF do" or "what will happen if they come into Ireland" or similar must be averaging one a week, minimum. The same answers are being given over and over again.Might be good to have one source of info that we could refer them to....

    Could possibly consider this for the NAMA related queries too...though they are being asked less and less...

    Agreements anyone?? Thoughts??

    Good idea. And only allow people to answer if they can prove they have some experience of economics.


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    #21
    Red Actor
    Registered Users Posts: 72 ✭✭Red Actor


    ntlbell wrote: »
    There was a spokesperson on newstalk. he said IIRC they can suggest where the cuts have to be made from as a condition of been given the money no?

    e.g. cut SW by 40% brings down cost of PS by 40% etc and if the cuts are not made by a certain time no more money comes.

    Is this not the way of it?
    Do the IMF get involved in this level of detail? Do they care how much is spent on health/social welfare/education? If the IMF said cut health by 20% and the Government said 10% on health and 5% on social welfare (or whatever maths) to end up with the desired debt level would the IMF give two hoots? What I'm really asking is - is the IMF the Stability and Growth Pact with teeth?


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    #22
    Brussels Sprout
    Registered Users Posts: 6,667 ✭✭✭Brussels Sprout


    I used to read this forum a lot during the summer but I stopped for several reasons. Anyway, now that the media seem to have finally copped on to what people were saying here months ago I decided to come back here to ask the best and brightest: What happens when the money runs out? I figure the immediate future will be some variation of the following:

    Opposition win DSW bi-election-majority cut yet again.
    Budget is passed after Healy-Rae and Lowry get their 12 pieces of silver.
    Other bi-elections are run in early 2011-govt loses and falls
    General Election
    Money runs out

    Ok the above is just one scenario-I'm not too interested in the order of events. All roads lead to Rome after all which in this case is the money running out and us as a country facing a bond market that is effectively closed to us.

    So at that point would we effectively be given the same deal as Greece?

    Is that an easier path then the one that someone like Latvia went down who were dealing only with the IMF (as far as I know)?

    For Greece to tap into the EU/IMF fund did they have to take direction from the EU/IMF, i.e. cut public sector and welfare budgets or do they have direct control over how the money is spent?

    I was going to start a new thread but then I noticed the new sticky :)


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    #23
    galway2007
    Registered Users Posts: 301 ✭✭galway2007


    LevelSpirit wrote: »
    Good idea. And only allow people to answer if they can prove they have some experience of economics.
    I think people with experience of economics ( if they exist) have not a clue
    I am still waiting for the soft landing ??????????


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    #24
    cson
    Registered Users Posts: 14,417 ✭✭✭✭cson


    galway2007 wrote: »
    I think people with experience of economics ( if they exist) have not a clue
    I am still waiting for the soft landing ??????????

    For all intents and purposes it's still soft.

    We've retained more or less the same levels of;

    Pay
    Welfare
    Tax
    Capital Expenditure

    Whilst the cost of living has decreased significantly in the meantime.

    There aren't too many stories of people being ****ed out of their homes by banks - it seems to be moratorium central as the banks don't want to write down the value of their loan book.

    The one area we have suffered is the Unemployment rate which has spiralled since 2008. Without wanting to turn this into a public v private sector horse flogging ans it has well and truly been done to death it is the private sector that has shouldered most of the loss - mainly through construction.

    We've had a pretty soft landing insofar as the actual impact the property crash and bank bailouts are having; the real suffering has yet to come imo.


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    #25
    maninasia
    Registered Users Posts: 4,616 ✭✭✭maninasia


    cson wrote: »
    I think you'll tend to find that Economy's who require IMF assistance were well destroyed before they sent the SOS.

    When you need to borrow money and nobody else will lend that means you are in big trouble already. The EBC/IMF offered rates of 5% to Greece, it's better than the private markets. They also push the government to take more radical but logical decisions, ones that political parties often refuse to do because voters don't like taking the pain and therefore won't vote for them if they do this.


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    #26
    newman10
    Registered Users Posts: 975 ✭✭✭newman10


    cson wrote: »
    We've had a pretty soft landing insofar as the actual impact the property crash and bank bailouts are having; the real suffering has yet to come imo.

    Where is the suffering to come


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    #27
    krd
    Banned (with Prison Access) Posts: 3,455 ✭✭✭krd


    ninty9er wrote: »
    This is a short one for the benefit of those starting threads here there and everywhere:

    The IMF does not make cuts; it tells a government to go find x amount of cuts/revenue or it will not turn the credit tap back on.

    Therefore the IMF makes no policy decisions, it forces governments to.

    That will be all.

    It's actually more or a case of having a gun to your head and doing what you're told.

    They can actually take a very proactive role. Even going as far as to take over a government. Ostensibly the government will be democratically elected, but in reality the IMF will have complete control over expenditure.

    The IMF are very ideological. Socialism for the rich - brutal free enterprise for the poor. Their policy documents are available on their website. Go have a look. The IMF is run by bankers for bankers. Most people who work for the IMF, end up working for one of the big New York banks after their 4 year stint. Joesph Stiglitz has two very good books on the IMF/WB.

    At the minute, I don't believe we're getting the full picture - I would say the European Stability fund and the IMF are already calling some of the shots. Though something a little bit more disorderly could be going on.

    I think it's more along the lines of Morgan Kelly's piece in the Irish Times.

    http://www.irishtimes.com/newspaper/opinion/2010/1108/1224282865400.html

    We're headed for a major mortgage default - effectively we're there already - Even the anonymous girl, Claire, who writes her dole diary for the Irish Times is using her overdraft to pay the mortgage.

    Even during the boom time, I knew people who were paying their mortgages with "home improvement" loans. The banks were fully aware of what was going on.


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    #28
    cson
    Registered Users Posts: 14,417 ✭✭✭✭cson


    newman10 wrote: »
    Where is the suffering to come

    A lot more than we're feeling now; you're talking major salary cuts and redundancy in the public sector; our Corporation Tax cherry of 12.5% being hiked up leading to a good few MNCs leaving; Unemployment rate of >20%; huge cutbacks in services across the board; Capital Spending being cut out altogether and much much more.

    There's a huge deterioration in the quality of life on the way for your average Irish citizen and more importantly their children for the forseeable future.


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    #29
    dan_d
    Closed Accounts Posts: 2,819 ✭✭✭dan_d


    Scofflaw wrote: »
    And my apologies for not replying - I have a half-written answer sitting in my outbox. I'll take this opportunity to create a sticky using this thread, I think.

    moderately,
    Scofflaw

    No problem.
    Thanks for taking me up on it, it's going to save a lot of people a lot of time (and arguments!)


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    #30
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Red Actor wrote: »
    What I'm really asking is - is the IMF the Stability and Growth Pact with teeth?
    The "teeth" of the IMF are that they can tell the markets when its okay to lend to Ireland again. We're already at the point where nobody will lend to us, so we're clearly being set up for IMF intervention.


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    #31
    silkworm53
    Closed Accounts Posts: 170 ✭✭silkworm53


    The poster who is saying we should tell the IMF to fuk off is off his rocker.

    Does he/she have a clue? We are borrowing and spending more than we are earning and we have to slash our spending and increase our earning in order to improve our conditions to keep borrowing.

    If we don't cut spending - we are spending their money - the bond holders will turn off the tap - they are the people giving us the money to keep the lights on.

    We haven't any choice unless you want to stuff newspaper down your vest to keep out the cold and eat dog food to stay alive?


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