Is Ireland going to go bankrupt?

thebman

eamonnm79 wrote: »

This is one of practicle parts of nama that worry me.
http://www.youtube.com/watch?v=fCi11gUFGfU&feature=related

This video shows people squating in S California in Abbandoned housing estates.
If the government own the houses people will feel(rightly or wrongly) they have a moral right.

Well they do have a right to them if tax euros pay for them don't they? I mean who pays the taxes?

I think we may learn a hard lesson along the lines of the market always finds a way and that these properties will be squatted in or demolished destroying all value they have and leaving the tax payer with land and nothing else of any value. Even the land in some of these areas will decrease in value since there is no amenities in many of these areas, who would want to buy them to build on? Maybe we can sell them to people willing to offer real services and amenities to the public.

Anyway it is a very dangerous game the government is playing with money they don't own and we don't have. Hell it is the future generations that own these homes and properties not even the current tax payers.

the_dark_side

Flamed Diving wrote: »

Ahh, thanks for the tabloid letters there. I might have missed it otherwise.

sorry I was trollied when I wrote it

jimmycrackcorm

thebman wrote: »

Well they do have a right to them if tax euros pay for them don't they? I mean who pays the taxes?

I doubt that squatters pay any taxes.

thebman

jimmycrackcorm wrote: »

I doubt that squatters pay any taxes.

lol neither do the rich or powerful. Guess its just Joe Soap that pays them so.

I think you'll find a different kind of squatter is appearing now that thousands are bankrupt from their bank loans (or soon to be in Irelands case).

People will get angry and I wouldn't put it past ordinary people to begin to think they have the right to the property given they'll be paying for it for years.

Économiste Monétaire

If anyone is interested, the May Exchequer figures were released today, you can compare this graph with the last:



€13.529bn in tax revenue compared with €17.122bn last year. Interest on the national debt is up to €1.590bn compared to €1.301bn last year. Total expenditure was €25.679bn for the period, giving an Exchequer deficit of €10.588bn for the first five months of the year.

eamonnm79

I wonder if by next month we will have spent double what we are taking in.

Is this level of disparity between revenue and expendature comparable to any where else?

It seems counter intuitive to believe any other country is doing this badly.
Perhaps neil fergasons warnings about Ireland are on the cards very soon despite the best quantitive easing efforts of the ECB on Irelands behalf.

Only ones I can think of are UK or US but they ar both too big to fail.

CDfm

ZYX wrote: »

There are 2 problems facing this country
1 The world economic crisis, which we can do very little about
2 Massive public spending with very low income tax. This we can do lots about. I am not sure how you define working class, but, 43% of people in this country pay no income tax. I presume most of these would be defined as "working class". They will have to pay more. Our current deficit this year will be about €10,000 per worker in this country. We need much higher cuts (either pay or staff) in public service as well major tax increases for everyone.
The vast majority of people in this country benefited from the Celtic Tiger and therefore will have to pay.

Eh - we have high taxes so given we have no rich people (and by marxist definitions we have a primitive capital base) so the cuts have to come from public spending and the low waged will get taxed.



PRSI Has a Wage Tax Component of 10.75%

Employee Contribution 4.00%

Levies 2.00%

Tax Lower/Higher 20.00 or 41.00 %

Totals 36.75% or 57.75%

How low is that now out of whats left there is 21 % VAT on what you spend and that doesnt exclude excise duty and stealth taxes.

So low taxes are a myth.

Add to that Social Programmes like say Unmarried Mothers Allowance and you could nearly saying to someone working in a middle ranking job - you support an unmarried mother or you pay for half a nurse.

The tax burden when expressed that way is a lot more unpalatable.

Économiste Monétaire

eamonnm79 wrote: »

I wonder if by next month we will have spent double what we are taking in.

Is this level of disparity between revenue and expendature comparable to any where else?

It seems counter intuitive to believe any other country is doing this badly.
Perhaps neil fergasons warnings about Ireland are on the cards very soon despite the best quantitive easing efforts of the ECB on Irelands behalf.

Only ones I can think of are UK or US but they ar both too big to fail.

Well, you can look at net borrowing/lending of the general government for an indication of the tax shortfall. Numbers including projections for 2009 and 2010:

Ireland, nominal GDP 2009 €171.511bn;
France, nominal GDP 2009 €1,954.912bn; and
Germany, nominal GDP 2009 €2,486.1bn.

The GDP numbers are projections from the end of March '09 excessive deficit procedure reporting. The net lending/borrowing figures are slightly revised since then. Here's the UK, I'm not sure of the GDP though, they don't have to report that to ECOFIN.

Économiste Monétaire

Our sovereign credit rating was downgraded from AA+ to AA, by S&P, today. Link.

CDfm

Économiste Monétaire wrote: »

Our sovereign credit rating was downgraded from AA+ to AA, by S&P, today. Link.

Is there a correlation between our credit rating and ugliness of our Prime Minister.

We had Bertie and now we have Brian Cowan. Have the UK had similar problems with Gordon after Tony?

Brian and Gordon are equally photogenic.

Économiste Monétaire

That's a major factor in their analysis, of course .

I found the updated GDP numbers (including the UK), so, here's the projected deficits based on the latest GDP and general government deficit figures for 2009 and 2010:

eamonnm79

Économiste Monétaire wrote: »

Well, you can look at net borrowing/lending of the general government for an indication of the tax shortfall. Numbers including projections for 2009 and 2010:

Ireland, nominal GDP 2009 €171.511bn;
France, nominal GDP 2009 €1,954.912bn; and
Germany, nominal GDP 2009 €2,486.1bn.

The GDP numbers are projections from the end of March '09 excessive deficit procedure reporting. The net lending/borrowing figures are slightly revised since then. Here's the UK, I'm not sure of the GDP though, they don't have to report that to ECOFIN.

was more looking for income v expenditure. With Ireland currently spending twice as much as it is taking in. I didnt think too many others could be that bad.
As an individual if i was trying to live spending twice as much as I was taking in i wouldnt last a month
Some one need to take the credit card from the government.
The level of debt cannot be sustainable for much longer.

Flamed Diving

EM, what software do you use to make those graphs? I like the style.

Saabdub

Just out of interest, what is the Italian debt/GDP ratio?

Flamed Diving

Try eurostat.eu

Économiste Monétaire

Flamed Diving wrote: »

EM, what software do you use to make those graphs? I like the style.

Nothing beats MS Excel '07 for the prettiness factor :pac:. It's just heavily modified from the bland default.

Saabdub wrote: »

Just out of interest, what is the Italian debt/GDP ratio?

It's about 105.81% at the end of 2008. Recent estimates indicate that increasing to 113% at the end of '09 and 116% for 2010.

Time Magazine

Économiste Monétaire wrote: »

Nothing beats MS Excel '07 for the prettiness factor :pac:

Lies. R FTW.



It just takes a couples years per graph.

Nice graphs, though.

Économiste Monétaire

Nice. Swiff Chart is good too, Keith Hennessey is a Swiff Chart fanboi.

CDfm

There was a valuation a couple of years back - how much is Ireland worth?

Does anyone remember the amount and how much we are worth now?

Maybe we could sell one of the poorer counties like monaghan to the Arabs and get out of debt.

Économiste Monétaire

June:



Overall Exchequer deficit for the first 6 months of the year is €14.709bn.

Économiste Monétaire

Here's a look at the recent QNA numbers for Q1:2009, I haven't seen much on this topic beyond the headline fall of 8.5%.

Économiste Monétaire

Big graph incoming. Three year voted expenditure:



Link to graph for three year tax revenue.

neantog

I've been wondering why there is no sustained mass fightback from the population against this incompetent government.

Up until the USSR dissolved, the politically and socially activist middle classes in ireland and elsewhere looked to an inchoate philosophy based on stalinist reaction for progressive inspiration.

These progressive middle class layers controlled the trade unions and led and encouraged mass fightbacks during the seventies and eighties, albiet with diminishing vigour and effect as the years progressed.

Since the USSR collapsed these controlling layers have ditched their stalinist guiding principles, and all socialist pretences, and have largely made their peace with big business and the capitalist state.

This has occured, and is occuring, in tandem with relentless economic and social regression driven by rapacious free market capitalism.

Consequently the mass of the working class population, in Ireland and elsewhere, have no politically or socially progressive and inclusive organisations to look to for guidance and leadership in organising an effective fightback against the reality of the present disasterous economic collapse.

The atomisation of society in itself is regressive and disasterous for the mass of the population.

This state of affairs has allowed for the development of government which is arrogantly unaccountable to the population for it's actions, and which takes it's orders solely from unelected right wing free marketeers who make up the boards of the banks and big business.

Therefore the government in effect exists to serve the greedy interests of wealthy shareholders of the banks and big business, to the detriment of the country's population, and to the detriment of the environment.

This country is inevitably headed for the rocks economically and socially if the mass of the people cannot reinvigourate a sense of society which cares for people and the environment above all else.

CDfm

Its very easy state expenditure on civil service salaries and welfare thats way past the countries means.

You can blame the government but people get the government they deserve.

Its a politicians job to get elected and thats how they did it. Thats not incompetence it got them re-elected.

Builderfromhell

neantog wrote: »

I've been wondering why there is no sustained mass fightback from the population against this incompetent government.

Up until the USSR dissolved, the politically and socially activist middle classes in ireland and elsewhere looked to an inchoate philosophy based on stalinist reaction for progressive inspiration.

These progressive middle class layers controlled the trade unions and led and encouraged mass fightbacks during the seventies and eighties, albiet with diminishing vigour and effect as the years progressed.

Since the USSR collapsed these controlling layers have ditched their stalinist guiding principles, and all socialist pretences, and have largely made their peace with big business and the capitalist state.

This has occured, and is occuring, in tandem with relentless economic and social regression driven by rapacious free market capitalism.

Consequently the mass of the working class population, in Ireland and elsewhere, have no politically or socially progressive and inclusive organisations to look to for guidance and leadership in organising an effective fightback against the reality of the present disasterous economic collapse.

The atomisation of society in itself is regressive and disasterous for the mass of the population.

This state of affairs has allowed for the development of government which is arrogantly unaccountable to the population for it's actions, and which takes it's orders solely from unelected right wing free marketeers who make up the boards of the banks and big business.

Therefore the government in effect exists to serve the greedy interests of wealthy shareholders of the banks and big business, to the detriment of the country's population, and to the detriment of the environment.

This country is inevitably headed for the rocks economically and socially if the mass of the people cannot reinvigourate a sense of society which cares for people and the environment above all else.

Good post Neantog

Euroland

darkman2 wrote: »

Overall in this crisis do you believe this country will go bankrupt?

No, I don't. Enough negative anti-national propaganda. Despite the current problems, Ireland would survive.

Hasschu

Ireland has quite a good chance of going bankrupt. Countries that go bankrupt survive in a weakened state due to political and economic turmoil. The last case of gunboat diplomacy was when the British intimidated the Tunisian gov't in 1920s' by lining up destroyers in the harbour in front of their parliament building as the payment of the debt was being debated. The ECB and the IMF will dictate to the gov't what measures they have to take in order to restore solvency. After a NO vote it would be the IMF alone. Nobody wants to take over a failed state so you do not have to worry about foreign troops coming ashore.

CDfm

Hasschu wrote: »

Ireland has quite a good chance of going bankrupt. Countries that go bankrupt survive in a weakened state due to political and economic turmoil. The last case of gunboat diplomacy was when the British intimidated the Tunisian gov't in 1920s' by lining up destroyers in the harbour in front of their parliament building as the payment of the debt was being debated. The ECB and the IMF will dictate to the gov't what measures they have to take in order to restore solvency. After a NO vote it would be the IMF alone. Nobody wants to take over a failed state so you do not have to worry about foreign troops coming ashore.

So what does that mean to the Public Servants looking to avoid paycuts.

If we still had our own currency we would have been in economic freefall long ago and would probably have devalued.

Hasschu

The bottom line is already playing out in California where the state is issuing scrip (iou) in lieu of legal currency. Something similar happened in Argentina in the state (province) of Jujuy (pronounced hoo hooey) where the business community and the state government jointly issued scrip usable only within the state. In the Canadian province of Alberta in the 1930s they had a party in power called Social Credit who issued scrip usable within the province. In Ireland's case the Euro is sound and the ECB is acting responsibly, bending over backwards to keep the show on the road. In cases where scrip is issued neither the Central Bank or Central Governments are operating efficiently.
The point will come in Ireland where the gov't will simply not have the money and at that point the problems will be dealt with. The most likely outcome is the gov't will step down and the incoming gov't will have the unenviable task of getting the ship of state back on course. The Swedish prescription was to spread the pain evenly across the whole society. In Ireland so far we are doing the exact opposite. A new gov't not shackled to its supporters by golden chains might be capable of managing its way out of this debacle in an orderly manner. As for the Public Service there are numerous ways of dealing with the crisis, none of them palatable. One or more unpaid days off per month, a freeze on all pay including increment payments, a freeze on all hiring, a cut in benefits, a cut in pay, or a combination of the foregoing. The last option should be throwing people out on the street and that includes the long term "temporary employees" who are the sacrificial lambs of our aqe.

CDfm

So the civil service is overpaid by 25% - what saving would this 25% cut bring and what are the benefits.