What sacrifices would you and would you not be prepared to make to aid Recovery?

SkepticOne

P. Breathnach wrote: »

I thought that I was simply drawing attention to a self-evident truth!

If we don't get the public finances in order, then we are goners. No Irish person, individual or corporate, will be able to borrow; that would include a great deal of roll-over. Given the amount of debt we are carrying, there would be a cascade, more like a Niagara, of bankruptcies.

If we attempt to sort the public finances by cuts alone, the amount of cutting would be unimaginably severe. You might manage it by closing every educational institution in the country and all our hospitals. That's the scale of the problem.

This is where I think the two main viewpoints expressed on this forum differ. We do have to balance the books but doing so is only part of the solution. We need to do so in a way that does not exacerbate the underlying problem which is the decline in the larger economy. Most people, such as I think yourself, see the problem as being one of balancing the books. The only question from this point of view is whether the books should be balanced by making cutbacks on the one hand or raising taxes on the other.

The media also sees things in these terms. The recent talks between the public sector unions and the government were referred to stupidly as the "national recovery talks" by RTE.

The problem with this is that it does not address the underlying cause of the public sector problem which is a collapse in the wider economy and underlying problem here is competitiveness.

Not only that but this narrow viewpoint fails to see the problems in the private sector as the problem in itself. Regardless of whether the those in the public sector have to take a hit, the private sector laying off workers is a tragedy in itself and these layoffs have been going on for over a year.in itself. This larger, more fundamental problem won't be solved by raising taxes, but rather will be made worse by raising taxes.

Permabear

This post has been deleted.

P. Breathnach

SkepticOne wrote: »

This is where I think the two main viewpoints expressed on this forum differ. We do have to balance the books but doing so is only part of the solution. We need to do so in a way that does not exacerbate the underlying problem which is the decline in the larger economy. Most people, such as I think yourself, see the problem as being one of balancing the books. The only question from this point of view is whether the books should be balanced by making cutbacks on the one hand or raising taxes on the other.

I don't see the problem as being just one of balancing the books, just that lessening the deficit is one of the measures that has to be taken, and it needs to be addressed very soon. Further, I don't think it is an either/or on strategy: we need both to reduce expenditure and to raise revenue.

The media also sees things in these terms. The recent talks between the public sector unions and the government were referred to stupidly as the "national recovery talks" by RTE.

The problem with this is that it does not address the underlying cause of the public sector problem which is a collapse in the wider economy and underlying problem here is competitiveness.

I agree that loss of competitiveness is a major problem, but I think it is a mistake to regard it as the only problem. It's possibly not even the main one. The bursting of our property bubble, the dangerous exposure of the banking sector, the international economic situation all come to mind as important factors. It's quite difficult to say which is most important.

Not only that but this narrow viewpoint fails to see the problems in the private sector as the problem in itself. Regardless of whether the those in the public sector have to take a hit, the private sector laying off workers is a tragedy in itself and these layoffs have been going on for over a year.in itself. This larger, more fundamental problem won't be solved by raising taxes, but rather will be made worse by raising taxes.

It is indeed a mistake to concentrate too much on the public sector. It would be equally a mistake to ignore the need to get the exchequer under better control. We have to fight on several fronts.

I think that we have no option but to raise taxes. The best thing would be to find those options that have the least damaging impact. For that reason, I favour those options that bear more heavily on high-income people (they spend a smaller proportion of their income, and proportionately more of their spending ends up outside Ireland).

silverharp

P. Breathnach wrote: »

That's like saying that death is a great cure for illness.

not really, it would be a wake up call , the needed reforms would be made and the funding would resume on a sustainable basis. you said youself how bad it is , you cant stop there and say the reforms are unpalitable. the risk is that in a couple of years the state has to fund a 3 digit debt% at pick a rate 10%? 12%?
The only problem we have is that the country is run by people who get to spend other peoples money , life gets very simple when you can decide how to spend your own.

Permabear

This post has been deleted.

Dannyboy83

jmayo wrote: »

To a degree I agree with Donegalfella.
I resent having to pay, because some people did very well during our great property boom, others p*ssed away any money they had, included in that group would be the governments I never voted for, and now I and my family are being told we have to make sacrifices i.e. carry the can for others cockups.

Before we pay hugh tax hikes, probably initially in indirect taxes, levies for working and PRSI etc, I would like to ask the following:
how much is being paid out in rent allowances, that is affectively paying for investors' assets ?
what about the chronic long term unemployed who have sat on their ar**s even though we had "full" employment ?

If workers are being asked to take pain, then so must some welfare recipients.
Now I await the whole argument about looking after all the less fortunate.

I agree with this.
But we should be passing the passing the pain up the chain, not down the chain.

If you take money from the rich, politicians etc., you turn them into financially responsible people.
If you take money from the poor, your turn them into ruthless gangsters.

How can a minister on 200k+ per annum can relate to me when my measely salary pays for myself and my unemployed girlfriend?
You wouldn't ask Prince William to advise the immigrants in Leeds on financial matters, would you?

I dunno, maybe I'm wrong, but i think if the people making these decisions were closer (financially, mentally) to us regular people, they would be a lot more careful and make better decisions.

BroomBurner

donegalfella wrote: »

This post has been deleted.

That put a smile on my face anyway

irish_bob

Dannyboy83 wrote: »

I agree with this.
But we should be passing the passing the pain up the chain, not down the chain.

If you take money from the rich, politicians etc., you turn them into financially responsible people.
If you take money from the poor, your turn them into ruthless gangsters.

How can a minister on 200k+ per annum can relate to me when my measely salary pays for myself and my unemployed girlfriend?
You wouldn't ask Prince William to advise the immigrants in Leeds on financial matters, would you?

I dunno, maybe I'm wrong, but i think if the people making these decisions were closer (financially, mentally) to us regular people, they would be a lot more careful and make better decisions.

people do not become gangsters because they have thier dole payments reduced, crime is much higher now than it was 40 years ago yet the wellfare state is far more generous in 2009 than it was in 1959 , oh and giving people money as opposed to allowing them earn it makes people irresponsible

Capt'n Midnight

Buddy12 wrote:

Or look at our infamous West Link. I do remember that being 50p at one stage and now we're asked to pay €3 unless you buy the tag which they charge you €1 a month for the pleasure of owning it.

it took me €4 of "low call" calls to get my video tag registered because it wouldn't work on line.
but what gets me is that the bridge is costing us €50m a year till 2020
http://www.finfacts.ie/irishfinancenews/article_1010268.shtml

Capt'n Midnight

on the radio yesterday FM106 garret was going about how our economy is too open and increased gov't spending would just go on imports

is there any way around this apart from changing the VAt rate ?

silverharp

donegalfella wrote: »

This post has been deleted.

Is that your April the 1st post?

Permabear

This post has been deleted.

faceman

Darragh29 wrote: »

The pretending and bullsh*t is over now. These guys haven't a clue how to run a country, and until a new government is in place and a credible plan emerges, I'll support nothing that they do, apart from supporting them when the biggest ape of them all, Cowen, asks his driver to bring him down to the Phoenix Park to ask Mary to disolve the Dail. Even the ratings agency now know how useless they are and have basically told us today that they will keep downgrading us until they see a new government.

No one is denying that we are alll pi$$ed off with the government and the fat cats. But sitting there with arms folded is only making the situation worse.

Also your comment abotu Standard and Poors is nonsense. They said they couldnt see an improvement until there was a change in goverment (clearly they dont know anything about the opposition!) but they cant downgrade the rating based on that.

P. Breathnach

donegalfella wrote: »

This post has been deleted.

I read this, and my jaw dropped: I found myself agreeing with donegalfella except for some minor reservations and needing clarification on who he regards as being members of "the fundamental class".

Then I remembered what the date was.

The dream was burst.

Dannyboy83

irish_bob wrote: »

people do not become gangsters because they have thier dole payments reduced, crime is much higher now than it was 40 years ago yet the wellfare state is far more generous in 2009 than it was in 1959 , oh and giving people money as opposed to allowing them earn it makes people irresponsible

Well, I can only speak for my personal experiences, but a few people I know have started stealing from Shopping Centres recently.
Some stuff is small, like a girl I'm friendly with has been stealing bottles of shampoo because she can't pay for it anymore since she lost her part time job. I told her to get a grip.

But another guy has a whole system devised for stealing from Tescos with the self checkout method. Bags of meat.
He has 2 children, his mom and his wife to support.
His wife has been made redundant, and he is now only working 2 days per week himself, whereas he used to do 5 + overtime (is a chef).
I was stunned when he was telling me about the stealing because I never would have taken him as the type to be honest.
I tried to talk him out of it, but he seems to think he is justified. I imagine if his social welfare was cut, he would only be encouraged to steal more.

I'm not condoning it at all, but its too easy for people who are making 80K+ to say that welfare payments should be cut, when a lot of people in the private sector were on 20K+ during the boom times (and even less now)
Its easy to wax lyrical about political concepts, but there are real people with real families and a real desire to survive.

If its already started happening now, what will be it be llike post April 7th?
http://www.independent.ie/national-news/struggling-traders-struck-by-massive-surge-in-shoplifting-1693292.html

molloyjh

silverharp wrote: »

Is that your April the 1st post?

Say it ain't so donegalfella! I was in utter agreement with the entire first paragraph!

To be honest redblue represents my position quite well. I don't think I could phrase it any better. The "effort" that is going into fixing our economy is short-sighted fire fighting that doesn't address the real issues.

As a public sector worker there are a number of things I would be willing to "sacrifice". The pension scheme for starters is just too bloody expensive and that whole area needs to be reviewed. It's not so much a sacrifice for me though as I likely will not be in the public sector for very long (well, I suppose that depends on how the next couple of years go! ).

There are also areas of tremendous waste in the public sector and this needs to be tackled. Badly. There has been no recognition of this fact thus far nevermind movement towards change. Things like overstaffing and top-heavy resourcing cannot be allowed to continue. Pay freezes are also a must across the board.

The job security issue is a tougher one due to the union situation. However one point that is rarely brought up is that this is not limited to the public sector. It is widespread in any industry that is heavily unionised (banking is equally as bad, believe me!). There needs to be fundamental changes in the way unions are viewed and run. Over the last 10 years+ employers have been providing excellent working conditions for employees due to the competition for resources, regulations introduced in no small part due to unions etc. This has left the unions with little else to do on a day to day basis other than looking after the wasters. Which ultimately has a negative impact on the other employees, so is counter-productive. Once this area has been tackled the job security issue will be a very different one, i.e. it will just involve imlementation at that stage.

Higher taxes are a must also, which is going to hit us all. As long as they are measured and fair (the rich need to start paying their share and I agree with the general idea of closing loopholes and removing exemptions etc) then I have no problem with it.

Reduction of the VAT rate needs to be done. They now have a couple of months worth of data relating to the effect that a change in VAT has on VAT income and consumer spend. This data should allow the Government to identify (with the use of a model factoring in exchange rates etc) the optimum VAT rate that will allow for the maximum return in VAT revenue while minimising the flow of cash out of the country. Similarly VRT needs to be looked at, but this would be a much lower priority I would say.

Serious changes in property taxation has got to happen now too. Tax on additional properties, removal of Stamp Duty in favour of Capital Gains Tax (or major modification to Stamp Duty rates/bounds) to try and get the property market moving as much as possible and the removal of tax exemptions.

The tax on SMS use, while not a big win, should also be implemented. As others have said, every little...

Permabear

This post has been deleted.

Black Swan

Aid the recovery? Go out and party more!:cool:

molloyjh

Blue_Lagoon wrote: »

Aid the recovery? Go out and party more!:cool:

Absolutely, put the session back in recession! :pac:

Dr Galen

donegalfella wrote: »

This post has been deleted.

was reading this and nodding along, then kinda thought, jesus this is a bit lefty, your going a bit far.......then I re-copped on who wrote it, very good DF. :pac:

NewDubliner

Capt'n Midnight wrote: »

on the radio yesterday FM106 garret was going about how our economy is too open and increased gov't spending would just go on imports ....is there any way around this apart from changing the VAt rate ?

The government has to respect open tendering laws and must hire foreign contractors where appropriate.

But, consumers can choose to buy Irish. We have to stop sending our money out of the country. So, no new cars, no new roads, no luxury electronic goods, no imported food, no foreign holidays. Let's get on our bikes and support local businesses.

No pain, no gain.

djpbarry

NewDubliner wrote: »

But, consumers can choose to buy Irish. We have to stop sending our money out of the country.

You’re advocating voluntary protectionism?

NewDubliner

djpbarry wrote: »

You’re advocating voluntary protectionism?

Not exactly: protectionism usually involves tariffs or exclusion from government contracts.

I'm advocating popular economic patriotism.

Put simply, we grow the economy by pulling in as much foreign income as we can and hanging on to as much of it and of our own money as we can.

We need to make it deeply uncool to support IN&M, subscribe to UPC or SKY, have a luxury '09' registered car or to holiday abroad. An awareness needs to be created that every euro sent abroad is an act of economic sabotage.

The government is not allowed promote such things because it would offend our EU neighbours. But, rather than fomenting anarchy, bank runs, civil unrest etc as some have tried here, let's promote a bit of economic patriotism?

djpbarry

NewDubliner wrote: »

An awareness needs to be created that every euro sent abroad is an act of economic sabotage.

If I see two similar products on a shelf, one produced in Ireland, one not, you know which one I'm going to buy? Whichever provides the best value for money. So rather than encouraging people to "buy Irish", people should be finding ways to make Ireland more competitive, as has already been said on this thread. Buying Irish just for the sake of it doesn't address the underlying reasons of why so little money is coming into this country.

P. Breathnach

djpbarry wrote: »

If I see two similar products on a shelf, one produced in Ireland, one not, you know which one I'm going to buy? Whichever provides the best value for money...

I think it is rare enough for personal spending choices to come down to such simple terms.

I am one of the lucky ones in that my spending capacity is fairly unimpaired, at least so far. I have chosen to go ahead with a project that I had been undecided about. One consideration (not the only one, I hasten to make clear) is that it will benefit a local firm and local workers.

I don't want to see myself as patriotic. I would like to see myself as a good neighbour.

djpbarry

P. Breathnach wrote: »

I am one of the lucky ones in that my spending capacity is fairly unimpaired, at least so far.

So essentially what you're saying is that saving money is not a major concern? Well for me, it is. It's pretty much up at the top of my list of concerns to be perfectly honest (recession or no recession) and I imagine a great many others in this country share this concern, hence the growth in popularity of the likes of Lidl and Aldi.

Permabear

This post has been deleted.

P. Breathnach

djpbarry wrote: »

So essentially what you're saying is that saving money is not a major concern? Well for me, it is. It's pretty much up at the top of my list of concerns to be perfectly honest (recession or no recession) and I imagine a great many others in this country share this concern, hence the growth in popularity of the likes of Lidl and Aldi.

I am sorry when people find themselves under financial pressure (but a bit less so when they get themselves into such a position when having a good income).

It is true that saving money is not a major concern for me. That is partly because I have never been unemployed, and always had a reasonable income. But it is also because I never got into the habit of spending extravagantly: if I can't comfortably afford something, then I do without it, or wait until I can afford it. My car is ten years old, but in good nick, so I have no thoughts of changing it. And I am quite happy to shop in Lidl (Aldi is in the next town, and I don't take on a 25-mile round trip just to go shopping).

silverharp

I couldn't find this Saturday Night Live clip on youtube but here it is at another website. Don't buy stuff you can't afford!


http://consumerist.com/consumer/clips/snl-skit-dont-buy-stuff-you-cant-afford-252491.php




I'm sure the Irish situation is in the same ballpark as the US, looking at the graph , I'd argue that for this to end total Debt to GDP needs to get down to 150%. Thats why Obama's plan will fail , the stimulus will run out and the debt will still be there. Same situation for Ireland until debt and house prices get down to managable levels the economy will not turn.

conlonbmw

I agree with Darragh on this.

There is no point in making cutbacks when you are not in control of your expenses. There is no need for any borrowing.

We need a Gov that is prepared to cut the public service by 100,000 or more, duplication in our government is ridiculous, and to reduce TD numbers, quango's, councillors and all other schemes where 20 billion has gone missing since 1996 etc.

Make dole recepients work 15-20 hours a week in civic duty, simplify tax, abolish car tax, VRT, car insurance and stick it on fuel, no need then for VRT, or motor tax offices around the country, no need for the gardai to be checking discs.