Do people really not understand how economies recover?

Sandvich

I'm reading some threads here and I'm absolsutely disgusted at some of the remarks. I've always held that Irish people have been worthlessly apathetic, but this is taking it to a new level. I take particular offense to the idea that they should have hit welfare and public servants harder.

Yes, the budget could have been harsher. But there are some insane decisions - for example a reduction to €150 a week dole for under 24s, and €100 under 21s. Now outside a recession, this might make some kind of sense outside of a recession(ironically), but in a recession an awful lot of college graduates and school leavers are going to be left without jobs.

What do you think realistically is going to happen to these people? They're going to have to go home with mammy and daddy making it no doubt a lot harder to find a job, especially if they live in the country. Many people have taken to night courses which they might no longer be able to afford. An under 21 now cannot afford to live apart from their parents without their support. If the parents are already in debt, how do you think this will work out?

Local pubs, restaurants whatever are going to shut down, because as soon as people are down so much a week, the first thing they're going to do is cut out "Unnecessary" spending like going out, local businesses will suffer, and it will take longer to recover the economy. Many of these businesses are "Just about" keeping afoot, so even if a few regulars stop going, it could be enough to send them over for good.

It is impossible for these cutbacks to help the economy in the long run.

Many members on the public sector on the lower end are having trouble with mortgages and debt. At the same time, many members of the public sector on the higher end are still being vastly overpaid.

There's a problem here. People are "accepting" these "tough decisions". You're not being mature, you're being gullible. The government paniced and made some lazy decisions. This is what I have a problem with the most. So much of politics is decided by a form of what's known as "Appeal to Emotion". One of the most common versions of this is to appeal to someone's sense of maturity, and make them feel more responsible for going along with your political angle. This is no different - all the government has to do is call these TOUGH decisions, and people wanting to feel some sense of responsibility will take to it without thinking of how others are affected.

The government have been consistantly incompetent in dealing with issues like this, so I have no idea why the average Irish person seems to be singing their praises now. I get the feeling it's the same way you eejits voted in Bertie again.

Personal debt is a much bigger problem in the country than national debt, which is still below "insane" levels, unlike personal debt. No, we can't keep borrowing forever but you also can't cut your way out of a recession.

Yes, the budget could have been harsher. But I don't think people realise that it not being as harsh as it could have been is the one thing that stopped it from really making things go tits up. Sometimes the "Fair" answer is the right one too.

I'm starting to think the Irish people do not deserve to be saved. But the ones who are pleasantly surprised with this budget are obviously not going to be the ones who were already bankrupted by the existing cutbacks.

The public support as it very often is isn't born out of people sitting down and honestly analysing the situation, it's based off bitterness towards welfare recieves and public servants and the general misconception that accepting "tough" decisions makes you more mature and responsible.

We are the only country making these cutbacks to begin with.

Just to point out that I got off relatively lightly in this budget, so I'm not complaining because of that. I'm worried about people who are already crippled by debt and that the general acceptance of this budget means it's more likely we'll see more cuts and stealth taxes.

imeddyhobbs

Sandvich wrote: »

Yes, the budget could have been harsher. But there are some insane decisions - for example a reduction to €150 a week dole for under 24s, and €100 under 21s.

Younger people wont be affected by these welfare cuts if they stay in education.Seems like a good idea to me.

Eliot Rosewater

Sandvich wrote: »

Yes, the budget could have been harsher.

More like: Yes, the budget could have been a hell of lot harsher.

Sandvich wrote: »

But there are some insane decisions - for example a reduction to €150 a week dole for under 24s, and €100 under 21s.

The cost of living has been falling. It has fallen something like 7% in the last year so all SW should have been reduced by this amount, to keep the "real" income consistent. The reason dole is lower for u24s is to incentivize them to get into education. This works. No one benefits if 20 year olds are sitting at home on the couch.

Either way, if your living at home €100 is absolutely loads. Assuming your even contributing towards your cost of living.

Sandvich wrote: »

Now outside a recession, this might make some kind of sense outside of a recession(ironically), but in a recession an awful lot of college graduates and school leavers are going to be left without jobs.

So because there are a greater number of unemployed, we should pay each individual jobseeker more. What sort of insane logic led you to that conclusion?

Sandvich wrote: »

If the parents are already in debt, how do you think this will work out?

Why has it become everyone else's problem if someone got themselves entangled in unsustainable debt? This is the classic argument of late "oh but they have a mortgage .. credit card ... loan." Well guess whos fault that is? Did the "fat cat" bankers hold them at gun point and force the loan money at them? Why should those who are responsible pay for those who arent?

Sandvich wrote: »

It is impossible for these cutbacks to help the economy in the long run.

The word "confidence" doesnt mean anything to you?

Sandvich wrote: »

Personal debt is a much bigger problem in the country than national debt, which is still below "insane" levels, unlike personal debt. No, we can't keep borrowing forever but you also can't cut your way out of a recession.

So your solution is not to borrow and not to cut. Oh right. So we will tax our way out of a recession. And give another reason for the college graduates mentioned above and the business people to leave. And watch tax revnue collapse. And then ... well we cant cut and we cant borrow. More tax, anyone? Thats the real road to recovery right there.

Sandvich wrote: »

We are the only country making these cutbacks to begin with.

What makes you think that?


EDIT: btw, to answer the question "Do people really not understand how economies recover?": judging from your post, no they don't.

zielarz

Sandvich, do you understand how economy works? If someone is taking a dole the money has to be taken first from somebody else. You're looking at the welfare cuts only from one perspective. Why you don't have any sympathy for those who pay taxes to cover its cost?

Sandvich

The cost of living has been falling. It has fallen something like 7% in the last year so all SW should have been reduced by this amount, to keep the "real" income consistent. The reason dole is lower for u24s is to incentivize them to get into education. This works. No one benefits if 20 year olds are sitting at home on the couch.

"This works" doesn't convince me. If anything what's going to happen is that more 20 year olds end up back home on the couch since they can't afford to actually do anything much.

So your solution is not to borrow and not to cut. Oh right. So we will tax our way out of a recession. And give another reason for the college graduates mentioned above and the business people to leave. And watch tax revnue collapse. And then ... well we cant cut and we cant borrow. More tax, anyone? Thats the real road to recovery right there.

You don't cut your way out of a recession. Serious reform is the best idea, but ultimately just because you can cut things doesn't mean you should - even if it helps in the long run, again, our national debt is nowhere near our personal debt. In general, it sucks, but there's not a lot you can do.

I still haven't seen anyone deal with the fact that local businesses are going to suffer because younger people especially will have less money to go out. I've already seen places locally close because of this.

Younger people wont be affected by these welfare cuts if they stay in education.Seems like a good idea to me.

And who pays for them to stay in education? College generally lasts 2-4 years and people go in when they're 18. So why up to 24s? Again, personal debt. People seem to be ignoring my main actual point here.

smelltheglove

One of the stand out after budget speeches to me was from the Sinn Fein representative and to be honest I think he made a hell of a lot of good points as with the op here. One that stands out is the fact that every cent in social welfare goes straight out into the Irish Economy through purchasing necessary food, paying bills clothing etc, those on social welfare are those that cannot afford to put a few euro aside for a rainy day, they are the ones that need to spend every penny they have therefor every payment goes back into the Irish economy.

During the speech it was mentioned that had the social welfare payments been left alone and taxed the extreme higher earners instead the state could possibly realise adequate revenue but with the cuts they may realise a lower intake of vat over the Christmas period as those hit, those who would have spent every precious penny they had, now have less to spend, however those who may have had 2k to spend per week and put 500 of that aside might still have spent their other 1.5k and put slightly less aside.
I am not of a political mind, I dont follow any one party in particular but both myself and my husband watching this speech without knowing who the person was both agreed, based on the suggestions and the facts presented he would be the one we would want to follow.

I initisally thought the budget was quite light other than the public sector cuts, but as soon as I heard this speech and the possible effects of the cuts I realised the budget may be a little harsher long term than it actually seemed today. There are no cures in it other than the slight increase the scrappage scheme may bring, there is only what this gentleman called sticky tape to hold things together for now.

Sandvich

smelltheglove wrote: »

I initisally thought the budget was quite light other than the public sector cuts, but as soon as I heard this speech and the possible effects of the cuts I realised the budget may be a little harsher long term than it actually seemed today. There are no cures in it other than the slight increase the scrappage scheme may bring, there is only what this gentleman called sticky tape to hold things together for now.

Exactly. The long term effects on people on dole ages 18-24 being on €100-150 will be madness. That's a huge chunk of money taken right out of the economy from an active spending class.

lmimmfn

Sandvich wrote: »

Exactly. The long term effects on people on dole ages 18-24 being on €100-150 will be madness. That's a huge chunk of money taken right out of the economy from an active spending class.

er are you just missing the point that its the revenue generated by the economy that pays for it in the first place?

ninty9er

Sandvich wrote: »

Exactly. The long term effects on people on dole ages 18-24 being on €100-150 will be madness. That's a huge chunk of money taken right out of the economy from an active spending class.

There are also a significant number of 18-24 year olds working whose disposible income hasn't been touched by this budget, thw whole point is it's not supposed to pay to be on welfare.

dexter50

Sandvich wrote: »

Exactly. The long term effects on people on dole ages 18-24 being on €100-150 will be madness. That's a huge chunk of money taken right out of the economy from an active spending class.

Hopefully it will get them off their backsides and encourage them to take up a position that they would have otherwise thought beneath them,
This budget will force them to try harder to get a job, if one is still not available it will encourage them to take up a fas programme or some sort of training.

If they don't they will get into a routine of doing nothing been lazy and when jobs do become available they won't want them..


they have had it too handy I for one would have loved 180 euro in my hand when i left school

Bring in National service for people who leave school and don't get a job after 1-2 years and let them pay for their dole

smelltheglove

Funny how this is turning into dole bashing. I am not on the dole but my husband is after working since age 15, many many people on the dole are not there out of choice so the whole get off your arse thing shouldnt be a case here, what should be a case is the fact that many of these people want to go to work but there just isnt work there.

Has the budget helped this????

No in a roundabout way it is helping the recession if it is taking money out of the pockets of people most likely to spend it. The majority of people on wages under 50k need every penny they have, rent / mortgage, bills / loans, food / clothes, all these necessities cost money and trust me with a family a 40k a year job makes it very hard to get all of this. Now the little money lower earners had to spend is even less, which means less going into the economy, which then means possibly more job losses and company closures.

Why can a budget never go without bashing the social?

goldjogger

Firstly can I say please stop labelling all young people as lazy and sitting on the couch, as a 23 year old I left school and spent 5 yrs in college and came out and can't find a job and have done courses, volunteering etc., as have many of my friends and family have done who are in similar positions. Alot of young lads left school and took on apprenticeships because thats where they were needed, these are the young people who will notice the cuts because many would have left home, taken out big loans to buy cars, houses etc because the times were good and no one saw these "hard times" coming because we were possibly blinded by the good times so to speak.

I think we all have our part to play be it tax or cutting our social welfare. No one likes to be down money and have it taken from us.

public workers being cut 5% on the lower scale how much is that really? I have heard 20euro from a friend of mine who is on the lower scale of public workers and she will still come out with over 600euro a week.

TCP/IP_King

Eliot Rosewater wrote: »

.... Why has it become everyone else's problem if someone got themselves entangled in unsustainable debt? This is the classic argument of late "oh but they have a mortgage .. credit card ... loan." Well guess whos fault that is? Did the "fat cat" bankers hold them at gun point and force the loan money at them? Why should those who are responsible pay for those who arent?

I'll be lazy and pick one I used earlier ...

"Now we see the Government truckling to an utterly discredited AIB board, despite having pumped €3.5bn into the bank and unconditionally guaranteed its deposits."

Impoverishing your own economy to prop up a corrupt institution !!
Tell a big enough lie and people will believe it.

Drumpot

TCP/IP_King wrote: »

I'll be lazy and pick one I used earlier ...

"Now we see the Government truckling to an utterly discredited AIB board, despite having pumped €3.5bn into the bank and unconditionally guaranteed its deposits."

Impoverishing your own economy to prop up a corrupt institution !!
Tell a big enough lie and people will believe it.

Do you think its that simple ?

Have you heard any other CREDIBLE alternatives that don't require pumping billions into our banking sector ?

I would love to hear your analysis on all the alternatives available to Ireland (including ones approved by the EU, the people who will fund whatever way we decide to deal with our banking/economic crisis) . .

I'm not saying that there arent any "fair" alternatives . . I have never heard an alternative that doesn't involve spending billions in bailing out the banks in some form . . Even our "lovable" opposition party's have no "cheap" alternative that doesnt involve pumping billions into the banking industry.

Sandvich

dexter50 wrote: »

Hopefully it will get them off their backsides and encourage them to take up a position that they would have otherwise thought beneath them,
This budget will force them to try harder to get a job, if one is still not available it will encourage them to take up a fas programme or some sort of training.

If they don't they will get into a routine of doing nothing been lazy and when jobs do become available they won't want them..


they have had it too handy I for one would have loved 180 euro in my hand when i left school

Bring in National service for people who leave school and don't get a job after 1-2 years and let them pay for their dole

Of course jobs aren't going to be available! This LAZY DOLE LEECHES attitude has to stop. We had plenty modest unemployment before the recessions hit, and you always need some amount of unemployed.

And places on FAS training courses etc. are being filled up. I know this because I barely got into a FETAC type course by the skin of my teeth. They're all packed to the brim.

ninty9er wrote: »

There are also a significant number of 18-24 year olds working whose disposible income hasn't been touched by this budget, thw whole point is it's not supposed to pay to be on welfare.

Irrelevant to the recovery of the economy.

lmimmfn wrote: »

er are you just missing the point that its the revenue generated by the economy that pays for it in the first place?

Private/personal debt is much larger than national/public sector debt. I've said this countless times. The govenment can afford to more than we can.

Why has it become everyone else's problem if someone got themselves entangled in unsustainable debt? This is the classic argument of late "oh but they have a mortgage .. credit card ... loan." Well guess whos fault that is? Did the "fat cat" bankers hold them at gun point and force the loan money at them? Why should those who are responsible pay for those who arent?

This post really annoyed me. Obviously, you're either 1) a "Fat Cat" of some description yourself, 2) Annoyingly right wing, 3) Not as knowledgable of economics as you like to think.

People getting into these loans and mortgages had no idea what they were getting into. With a banker, it's their job. The whole system has been thoroughly abuse and it's the bankers fault for not caring where the money comes from.

Of course the bankers are at fault and I can't believe you're trying to pin the blame on those crippled by debt with some bull**** idea of personal responsibility.

While I myself am not taking a big hit, it's stuff like this that really bothers me -

http://www.boards.ie/vbulletin/showthread.php?t=2055765618

It really aggrivates me that people act like this is a great budget completely unaware of how others less fortunate them might be affected.

Sandvich

goldjogger wrote: »

Firstly can I say please stop labelling all young people as lazy and sitting on the couch, as a 23 year old I left school and spent 5 yrs in college and came out and can't find a job and have done courses, volunteering etc., as have many of my friends and family have done who are in similar positions. Alot of young lads left school and took on apprenticeships because thats where they were needed, these are the young people who will notice the cuts because many would have left home, taken out big loans to buy cars, houses etc because the times were good and no one saw these "hard times" coming because we were possibly blinded by the good times so to speak.

I think we all have our part to play be it tax or cutting our social welfare. No one likes to be down money and have it taken from us.

public workers being cut 5% on the lower scale how much is that really? I have heard 20euro from a friend of mine who is on the lower scale of public workers and she will still come out with over 600euro a week.

It's not about "everyone having to pay their part". First off, it's not most people's fault this happened, and second, it's not actually how you recover a broken economy.

I'm sorry but you're a good example of what I'm saying, it's sad but you've gotten a little suckered into the "Tough Decisions" idea without thinking what's actually best for the economy.

lmimmfn

Sandvich wrote: »

Private/personal debt is much larger than national/public sector debt. I've said this countless times. The govenment can afford to more than we can.

so that makes it alright then, taxing me extra to keep up the dole payout makes it ok when we cant afford it? You get a lot less in the uk regardless of your age but that doesnt matter does it?

dole is a cost not a money maker.

Sandvich

lmimmfn wrote: »

so that makes it alright then, taxing me extra to keep up the dole payout makes it ok when we cant afford it? You get a lot less in the uk regardless of your age but that doesnt matter does it?

The UK is a really bad example of welfare, since they get too little but also have to pay out less too.

The more money you have the more you can afford to take a hit. There are a lot of high paid public servants but in general unfortunately you just have to wait things out until they recover.

This kind of viewpoint is an emotional reaction rather than a logical one, but people seem to think it's the other way around.

lmimmfn

Sandvich wrote: »

The UK is a really bad example of welfare, since they get too little but also have to pay out less too.

The more money you have the more you can afford to take a hit. There are a lot of high paid public servants but in general unfortunately you just have to wait things out until they recover.

This kind of viewpoint is an emotional reaction rather than a logical one, but people seem to think it's the other way around.

on the contrary we are a bad example of welfare. In most eu countries you get zilch unless you contribute to the economy and even at that you just get covered for 6 months after youre laid off.

Seriously, the dole is optional for society, nobody owes anyone on the dole anything, even if everyone in the country earned twice as much does that mean dole should be x2? no it doesnt. Its ment to curb extreme poverty, there will be very very rare cases with these cuts whereby folk under 23 cant afford to live whatsoever and you cant legislate for 10 people out of half a million. If i couldnt afford to live on 130euro or whatever on the dole i would move to somewhere where i could get a job, there is absolutely no excuse, there are still jobs available in other countries and what not.

Mr. Incognito

Why don't they just cap ALL public servants max pay at 200,000 for the period of the recession. No-one is worth more than that.

There are a lot of overpaid public servants in this country- Including TD's.

Drumpot

Sandvich wrote: »

It really aggrivates me that people act like this is a great budget completely unaware of how others less fortunate them might be affected.

Im in serious negative equity, have personal loans (including a business one taken out during peak) and work in the financial services industry as a sole Trader . .

Ive never earner over 26k per annum in the private sector so speak from a position of the underpaid average employee in Ireland . .

I believe personal responsibility for ones financial commitments is important. If not, where do we stop with responsibility ? If loads of people tell me about a pyramid scheme I invest in, should I be "bailed" out ?

What about people who dont have mortgages ? Should their taxes be used to "bail" out individuals who took financial risks ? What about innocent people who's pensions have been decimated ? Or the people who invested their life savings in bank shares ?

And anyways, a majority of people in the country are struggling in some form . . To say "I know you have taken pain . . BUT" is completely disingenuous and dismissive of their circumstances.

Please dont turn this debate into NAMA or Banks . . No, they shouldnt get away with it, but they are vital to our economy (if you need me to explain, dont bring up the point). . That seems to be the problem with many of the people who argue about these cuts, they dont seem to be able to see the bigger picture!

I want a government that makes tough financial decisions that will benefit the country in the long term. We rely on international finance and investment in so many more ways then the bleeding heart brigade seem to misunderstand. .

I empathise with anybody struggling financially, Im struggling myself. In my world and from my perspective, the cuts the public service have been dished are not that bad . .

hatrickpatrick

I just want to throw in a word here. I'm beginning to get seriously pissed off at reading constant commentary from various sources saying to the unfortunate debt-laden people from the boom, "It's your tough luck, you took the risk, it's not the government's responsibility to clean up your reckless mess, nobody forced you to take out loans you couldn't afford, etc etc etc".

The banks lied to these people. You can put it in any politically correct language you like, you can cover it with figures and waffle about how nobody realized how bad things were going to get, but the simple fact is that the banks were not merely misguided, they were dishonest. Most of the people who are now screwed with negative equity and debt would never have got themselves into that position if the banks hadn't made the deal seem so unbreakable and so sweet.

Many of us here have studied business and/or economics or have a general understanding of those subjects and that's fine, but there are a vast number of people who do not have any education in that area, and those people rely on people they TRUST to give them sound financial advice about matters which they do not fully understand. This is where the banks should have been honest and up front, and instead they were greedy and completely indifferent to the potential suffering they were hiding from their customers should the economy go belly up. The average man or woman may not have known how the economy works or what was likely to happen but I don't believe for one second that a competent banker didn't see and recognize the risks. Frankly, if they genuinely didn't know this information I would personally think they have no right whatsoever to give financial advice to anyone. It's one hell of a coincidence if out of the hoard of economists who were sounding alarm bells about this several years ago, not one of them was involved with the financial sector. I don't believe for a minute that the banks had no idea what would happen to these people. They chose to put their own profits first.

Drumpot

hatrickpatrick wrote: »

I just want to throw in a word here. I'm beginning to get seriously pissed off at reading constant commentary from various sources saying to the unfortunate debt-laden people from the boom, "It's your tough luck, you took the risk, it's not the government's responsibility to clean up your reckless mess, nobody forced you to take out loans you couldn't afford, etc etc etc".

The banks lied to these people. You can put it in any politically correct language you like, you can cover it with figures and waffle about how nobody realized how bad things were going to get, but the simple fact is that the banks were not merely misguided, they were dishonest. Most of the people who are now screwed with negative equity and debt would never have got themselves into that position if the banks hadn't made the deal seem so unbreakable and so sweet.

Many of us here have studied business and/or economics or have a general understanding of those subjects and that's fine, but there are a vast number of people who do not have any education in that area, and those people rely on people they TRUST to give them sound financial advice about matters which they do not fully understand. This is where the banks should have been honest and up front, and instead they were greedy and completely indifferent to the potential suffering they were hiding from their customers should the economy go belly up. The average man or woman may not have known how the economy works or what was likely to happen but I don't believe for one second that a competent banker didn't see and recognize the risks. Frankly, if they genuinely didn't know this information I would personally think they have no right whatsoever to give financial advice to anyone. It's one hell of a coincidence if out of the hoard of economists who were sounding alarm bells about this several years ago, not one of them was involved with the financial sector. I don't believe for a minute that the banks had no idea what would happen to these people. They chose to put their own profits first.

With all due respect . . .

Nobody saw the crash coming . . Some economists predicted it, but if I keep saying there will be a crash in the economy it will eventually happen and people will lose out financially because of it . . Its the cycle of capitalism that will continue until we find or choose another way to run economies .

I am loath to defend "bankers" as I believe banks represent an idea born from the devil himself (At its simplest, I will charge you for looking after your money, while at the same time I will make more money charging other people for a loan of your money!) . .

But . . . . To put the blame firmly at the door of banks is to ignore what should be our required sense of personal responsibility for our own actions.

House prices at anytime can go up and down. . You don't have to be financially educated to know this . . You speak as though the most intelligent in the country avoided the pain. The truth is that the majority of people who are'nt in negative equity are the ones who couldn't afford a loan (and smuggly protest that they were simply being financially sound!) or who have paid off their mortgage .

The truth is we all bought into the property bubble because we wanted to (it seems to be a natural instinct of Irish People, Europeans are happy to rent). If you want somebody to blame, blame society . .

We voted in FF . . (I didnt vote for them, but I didnt protest on the streets to get them removed, I take responsibility for the running of my country as much as any other voter should) . . We demanded reduced regulation . . Where were the protests on the streets when the banks were getting away with all sorts of consistent irregularities ? (overcharging, misselling . . ). Nobody was interested in sorting out the "lieing" banks, even when they were ripping us off in view of the entire public ! The government mirrors its people and as the saying goes "you get the government you want" . . It's actually a very scary thought considering some of the "misplaced" educated opinions of many people on these forums . .

We complain about corruption and then vote in poor politicians. Including the ones who will invest millions in the local GAA club for votes . . We , as a nation, demand short term satisfaction at the expense of long term prosperity . .

At the end of the day . . It sounds like many people want their cake, want to eat it and want somebody else to pay for it . .

Boskowski

Sandvich wrote: »

Many members on the public sector on the lower end are having trouble with mortgages and debt. At the same time, many members of the public sector on the higher end are still being vastly overpaid.

I'd have a comment to make on this one.

I agree. And I blame the public service unions.

Instead of living in LaLa-land and being in denial they should have taken the opportunity to influence the cuts to make the cuts more just.

But they were actually thinking they could pull some stupid stunt which didn't work out. Then they went to totally confrontational and finally they totally failed their members because the cuts were made anyway - as they had to - but without them. Idiots, the whole lot.

If I was a public sector union member I'd give them a good kick up their arse and tell them to eff off.

smelltheglove

There are so many ways that could have been better, the country is ushing more people into poverty with cuts in social and even cuts on lower paid public servants. There is no incentive to go back to work, yes we have a higher social than the uk but arent the uk residents looked after more in terms of housing etc?

So one thing that has been niggling on my mind for a long time is this, a family of 5 could be provided for by the father working a job that brings in say 40k. Now he has lost his job, so this family now are provided for by the state. there are no jobs out there that he could actually support his family on because

1 he gets 400 a week on the social
2 he gets 1k a month on rent which allows him to keep a roof over his families heads
3 the only job he can get will earn him say 400 a week
4 if he takes this job he looses rent allowance
5 he cant afford to go back to work and start again

So is there an answer to this, the way I see it there is a simple answer, I spoke briefly with a friend who said its never simple, but maybe its just too simple for the government to acknowledge. Why not allow him to take the 400 a week job and retain his rent allowance, then the country saves the social welfare allowance, yes he still gets rent allowance but sure he was getting that anyway, and then there will be more people returning to work, even at the low paying end and building the economy back up. Say there are 1000 families in this situation, who were getting 32,800 a year from the government, a simple measure like this could save the government 20,800 per head which is a whopping 20 million.

The governments rules and guidelines need to be readdressed to help the situation we are in. Ok in the vast majority 20m may not be huge amount but it is significant enough, that money could be used to cut vat or in other areas to intice businesses back into the country with tax breaks or whatever. By the way, I am sure there are a lot more than 1000 people in this position over the country so the savings could be quite a bit more.

hinault

Sandvich wrote: »

Exactly. The long term effects on people on dole ages 18-24 being on €100-150 will be madness. That's a huge chunk of money taken right out of the economy from an active spending class.

Very astute point.

I have stated it before and I will state it again, to my mind there are plenty of other sectors/areas where cuts could and should have been implemented regarding public expenditure.

hinault

Drumpot wrote: »

With all due respect . . .

Nobody saw the crash coming . . Some economists predicted it, but if I keep saying there will be a crash in the economy it will eventually happen and people will lose out financially because of it . . Its the cycle of capitalism that will continue until we find or choose another way to run economies .

I am loath to defend "bankers" as I believe banks represent an idea born from the devil himself (At its simplest, I will charge you for looking after your money, while at the same time I will make more money charging other people for a loan of your money!) . .

But . . . . To put the blame firmly at the door of banks is to ignore what should be our required sense of personal responsibility for our own actions.

House prices at anytime can go up and down. . You don't have to be financially educated to know this . . You speak as though the most intelligent in the country avoided the pain. The truth is that the majority of people who are'nt in negative equity are the ones who couldn't afford a loan (and smuggly protest that they were simply being financially sound!) or who have paid off their mortgage .

The truth is we all bought into the property bubble because we wanted to (it seems to be a natural instinct of Irish People, Europeans are happy to rent). If you want somebody to blame, blame society . .

We voted in FF . . (I didnt vote for them, but I didnt protest on the streets to get them removed, I take responsibility for the running of my country as much as any other voter should) . . We demanded reduced regulation . . Where were the protests on the streets when the banks were getting away with all sorts of consistent irregularities ? (overcharging, misselling . . ). Nobody was interested in sorting out the "lieing" banks, even when they were ripping us off in view of the entire public ! The government mirrors its people and as the saying goes "you get the government you want" . . It's actually a very scary thought considering some of the "misplaced" educated opinions of many people on these forums . .

We complain about corruption and then vote in poor politicians. Including the ones who will invest millions in the local GAA club for votes . . We , as a nation, demand short term satisfaction at the expense of long term prosperity . .

At the end of the day . . It sounds like many people want their cake, want to eat it and want somebody else to pay for it . .

All reasonable points.

Something which also underlines the problems here is our structure of govt.
No disrespect intended, but that gob****e Jackie Healy Rae went on TV on Tuesday talking (trying to speak actually) about getting a hospital in Kenmare.
The country is on it's fcuking knees and here is that gob****e trying to ring concessions out of a bankrupt govt.

My point being, if TD's are only going to act in their constituencies interest - at the expense of the national interest - we're snookered.

It is my view that the political model is broken anyhow.

muboop1

goldjogger wrote: »

public workers being cut 5% on the lower scale how much is that really? I have heard 20euro from a friend of mine who is on the lower scale of public workers and she will still come out with over 600euro a week.

Are you actually capable of maths??
taking whether before tax or after tax or levys or whatever...
there is no way 20 euro is all that is taken from your mate with over 600...

shoegirl

Sandvich wrote: »

Yes, the budget could have been harsher. But there are some insane decisions - for example a reduction to €150 a week dole for under 24s, and €100 under 21s. Now outside a recession, this might make some kind of sense outside of a recession(ironically), but in a recession an awful lot of college graduates and school leavers are going to be left without jobs.

What do you think realistically is going to happen to these people? They're going to have to go home with mammy and daddy making it no doubt a lot harder to find a job, especially if they live in the country. Many people have taken to night courses which they might no longer be able to afford. An under 21 now cannot afford to live apart from their parents without their support. If the parents are already in debt, how do you think this will work out?

You've hit the nail on the head there, and in other parts.

Basically, if you remove cash from the economy, especially when we are stuggling to complete for investment and exports with the ROW, it bleeds potential spending on the now-essential domestic sector. Since that sector is already crippled with artifically inflated (and now protected by NAMA) property-related costs (rents multiples of similar places in other EU countries, purchase costs you don't want to even think about, not to mention very high insurance rates) its going to lose money. Losing business and money means layoffs. Layoffs mean less income tax and payouts for welfare. Its not even though. For example a lot of people who are losing their jobs now are quite low paid and probably paying very small amounts of tax - but the cost of providing them with welfare cash payments, rent subsidies or mortgage interest subsidies, or medial cards, could be several times what they've paid in tax. So the government might be losing only 5k a year, but find itself paying out 15k.

The second issue is the assumption that families can afford to support adult children, and that their contribution to the household was not vital. I come from a very poor family where what we paid into the household pot was very important indeed, even when we were earning quite small amounts. I can only imagine how hard this will hit families already in difficulty. Its a real middle class assumption to make to assume that mummy and Daddy are wealthy enough to subsidise older kids. They might well be dependent on their childrens incomes themselves.

Basically the intention is to force these adult children into emmigration. We might as well have been honest and at least bought them a one way ticket.

The net result of this budget will be a continuation of falling domestic trade, more job losses, continually spiralling downward tax receipts, and a deepening depression that will take years to dig out of. The speech by Lenehan suggesting that the "basics" were right said it all - he has no honesty about the deceptiveness of the later tiger years and still lives in the cloud cuckoo land that artifical inflation of property values will lift this country into untold wealth.

Somebody should dump that idiot onto the sands of the artificial "Ireland" in Dubai and leave him there to starve.

shoegirl

muboop1 wrote: »

Are you actually capable of maths??
taking whether before tax or after tax or levys or whatever...
there is no way 20 euro is all that is taken from your mate with over 600...

Somebody losing 600 a week would pay a teeny bit less pension levy, but would be hit much harder than the higher paid.

This is why.

If you lose 1000 a year, but are paying the upper rate of tax, roughly you'll "save" the 500 of that you would have paid in tax.
But if you lose 1000 and only pay the lower rate of tax, then you "save" only about 250-300 on that cut, so you lose 700.

Sorry its a crude example, but the depth of the cut will depend on the marginal tax rate, not the actual income. This way, a single person on 70k will lose less than a married dual income earner on the same salary level. And if the spouse of the dual earner is also public sector, they could lose more again.

MrKingsley

Going back to what a couple of previous posters have touched on. (Not yet sure how to do multiple mini quotes)

The cuts (of all varieties) are going to lessen people spending powers and also their savings potential. I assume this can be agreed on.

So when weve past "the worst of it" where will the money come from in order to help the economy to expand once more?

May seem like a very basic point but im just curious as someone with rather little economic knowledge