IMF: social welfare benefits 'too high'

KyussBishop

Scortho wrote: »

First of all I never said that are payments were the highest in Europe.
Secondly we're one of the worst performing economies.

Where do you think this money is going to come from. At the moment we are borrowing significant sums of money to pay welfare. We cannot afford to do this.

Borrowing for capital expenditure such as roads and airports is important as it increases output, increases inward investment and benefits future generations.

Borrowing, to cover day to day spending is not a wise idea. Day to day spending is meant to be covered with taxes collected. By borrowing for day to day spending, it makes it harder in the long run to recover.

This is why the government have the balance the books. Last year, EXCLUDING money used to recapitalise the banking system, the deficit was 14.4 billion. Social welfare makes up a large portion of this. It will be very difficult for the government to cut this deficit, without targeting certain areas of social welfare.

If you have realistic alternative suggestions where the government can get their hands on this 14.4 billion please share them with us. We'll be more than glad to hear them.

Borrowing is not the only option, money creation is a vital alternative for funding this (which is out of reach due to the EU political situation); as I outlined in my previous post, this should be manageable without (or with little) inflation, and would eventually bring down the deficit by increasing economic production, instead of having to use cuts.

Cuts always worsen the problem, because it means less money in the local economy, meaning less tax intake, necessitating more cuts; it keeps going on like that until it balances out, at which point severe and unnecessary economic damage has been done (and continues to be done, as the damage is much greater than what is immediately felt).

To see the damage that has and is being done to the local economy, you just have to look at GNP:
http://www.cso.ie/indicators/default.aspx?id=2

Our GDP may be balancing out, but that is anomalous as our economy is unusual in that we have a low corporation tax, thus many more multinationals, causing a greater separation between GNP/GDP than is normal for most countries.
The GNP is the better measure of our internal economy, and it is showing no sign of improvement.

later12 wrote:

what matters is that the country wakes up one day/ month/ year and realises it has a significant recessionary output gap which needs to be remedied somehow. Hoe that gap came about is not necessarily of prime concern...

On the contrary, this is the most important concern; the gap has been caused by a reduction in economic activity and tax intake, so the solution is to stimulate economic activity, not damage it further and thus worsening the problem.

Even a bigger deficit in the short term is less damaging than that, but a deficit is not the only option, money creation needs to be supplied to ameliorate the problem too.

mollymosfet

The basic issue, and what should be getting our attention, is that we are locked into this by the Troika since we haven't had the backbone to say "No". If we take an even more reckless course of action than we are doing now, it damages the EU, it's not as if we have no bargaining chips at the table - we're just refusing to use them.

There are also so many insane little things that need to be fixed - like the fact that the energy regulator has never turned down a price increase. Bord Gais asked for 7% and got more than 8%. I understand there are real reasons for this, but this could have been a chance to offset some of the burden.

The main problem here is that we our mentality is too weak. It's easier to sentence freezing pensioners to death than it is to address real structural problems.

I agree with most everything Kyuss has said.

it should also be noted that the last budget was renowned for being amazingly unequal. Inequality is rising. That needs to be addressed - and yes, "taxing the rich" is part of that. Even if we could raise half a billion that would be enough to stave off the brunt of welfare, health or education cuts. It'd be a positive start.

And what about all the money we could make from the offshore oil that was recently found? I like how we're pretending that didn't even happen, which proves either we're going to be a total pushover with it, or that the nature of the cuts are purely ideological, not practical.

later12

mollymosfet wrote: »

Sorry, I copied the wrong link -

http://www.voxeu.org/debates/commentaries/fallacy-austerity-based-fiscal-consolidation

I wanted to post this link in particular because there was a part in the conclusion that I believe addressed a point you were pushing with regards export- based economies:

The world is a closed economy. When every other country is facing the prospect of a growth slowdown or outright recession, no major economy can depend on exports to compensate for cuts in domestic expenditure. Large economies are also closed enough, in the sense that their own growth depends on domestic demand, rather than external growth. Investor confidence works in a symmetric and pro-cyclical way – it rising with a booming economy and falling when the economy is in a downtrun.

But you missed the point altogether. I said that Paul Krugman argues quite well that this is because fiscal expenditure consolidation, whilst initially impeding PAE, also gives rise to a net exports boom. Therefore it is a scenario particularly suited to countries like Ireland and not, say the U.S., which is what the authors probably have in mind when they refer to major economies.

You have also still failed to justify why you think welfare in particular is a valid target for this consolidation. "Because it's the biggest" is not a valid reason when it impacts the livelihoods of individuals so directly. It's big because there is high unemployment. It will be reduced, naturally, when the economy picks up and jobs are created.

Two main reasons

1. Because at €9.5 billion a year, the exchequer is spending more on Social Protection than any other department. Abolishing the entire Department of Defence wouldn't even put a noticeable chip in it - you'd still be spending €9 billion. That's how enormous it is. It just isn't credible that you could trim the fat from other departments and cause the €9.5 billion expenditure on social protection seem affordable.
2. As personal income tax bands are broadened and/or payroll taxes are increased, you run the risk of increasing replacement rates from welfare transfers as take home pay from work decreases, thereby (although we havent reached that stage yet) making work less attractive. It'snot fair to ask workers to take the brunt of this and decline from asking social welfare recipients (not only the unemployed) to take, say, an €8 hit again.

mollymosfet

later12 wrote: »

But you missed the point altogether. I said that Paul Krugman argues quite well that this is because fiscal expenditure consolidation, whilst initially impeding PAE, also gives rise to a net exports boom. Therefore it is a scenario particularly suited to countries like Ireland and not, say the U.S., which is what the authors probably have in mind when they refer to major economies.

Did you read the link I offered you? It's short, and it does talk directly about Ireland.

Two main reasons

1. Because at €9.5 billion a year, the exchequer is spending more on Social Protection than any other department. Abolishing the entire Department of Defence wouldn't even put a noticeable chip in it - you'd still be spending €9 billion. That's how enormous it is. It just isn't credible that you could trim the fat from other departments and bring the €9.5 billion expenditure on social protection seem affordable. Because
2. As personal income tax bands are broadened and/or payroll taxes are increased, you run the risk of increasing replacement rates from welfare transfers as take home pay from work decreases, thereby (although we havent reached that stage yet) making work less attractive.

Oh are you seriously pulling the "high welfare puts people off working" card? Because at some point I'm just going to have to tell you to **** off if that's the case, I was under the impression you had a little more class than the average pro-austerity right winger, which is why I've bothered debating you this long.

I already pointed out that the welfare bill is best reduced by creating jobs. Just because it is very large does not mean that we can slash into it and expect good things. It does not and will not work like that. Given it will come down as we create jobs - and increase as we loose them(which cuts will do) - would it not make more sense to focus all our efforts on that?

For example, putting more money into the arts nearly always nets more money back. But because of the size of the bank debt, we can't "Justify" this. In my view, extreme measures should be taken with regards that in seizing the assets of some of those responsible because it is preferable to the long term damage caused by cutbacks. Put all of that into job creation/funding arts and various other money makers, then you'll find yourself with a lower welfare bill.

As I have said, we need to renegotiate the terms of the bailout and take a path that focuses on job creation and providing stimulus to local business.

KyussBishop

later12 wrote: »

Two main reasons

1. Because at €9.5 billion a year, the exchequer is spending more on Social Protection than any other department. Abolishing the entire Department of Defence wouldn't even put a noticeable chip in it - you'd still be spending €9 billion. That's how enormous it is. It just isn't credible that you could trim the fat from other departments and cause the €9.5 billion expenditure on social protection seem affordable.
2. As personal income tax bands are broadened and/or payroll taxes are increased, you run the risk of increasing replacement rates from welfare transfers as take home pay from work decreases, thereby (although we havent reached that stage yet) making work less attractive. It'snot fair to ask workers to take the brunt of this and decline from asking social welfare recipients (not only the unemployed) to take, say, an €8 hit again.

Create money instead. Doing that is not a hammer for every nail, but you could get rid of that deficit burden from unemployment, by a Job Guarantee program funded by money creation, as I describe here:
https://www.boards.ie/vbulletin/showthread.php?t=2056751652

It's a level of policy that has to be taken up on the EU level, but it seems to barely be in discourse at the moment.

later12

mollymosfet wrote: »

Did you read the link I offered you? It's short, and it does talk directly about Ireland.

Yes but it rather curiously fails to engage with the points that Perotti & al. make, along with a lot of Irish economists, on the effects that the consolidation which tends to be based on cuts has on competitiveness.

The only thing they say of note relates to Ireland's GDP growth, which you shouldn't read too literally, and which if you read between the lines, you'll see they are talking about a much later contraction, deliberatly skirting over the way GDP behaved during the consolidation in Ireland:

Look at 1987, when consolidation started and we switched to ERM.

Oh are you seriously pulling the "high welfare puts people off working" card?

No. If you read the thread, I make the exact opposite case to that as things stand. Work is clearly very attractive from a financial point of view. That is not up for debate.

What can be said however, is that if work is to be taxed to such a magnitude as to correct the deficit, i.e. a heavily revenue based fiscal consolidation, then we will end up with a situation - based on the sheer magnitude of the deficit- whereby net pay will have reduced substantially. So replacement rates from welfare will rise accordingly. And that causes unemployment traps.

That is why, whilst welfare is not too high as to make work unattractive at present, welfare rates much fall in line with tax increases or tax broadening policies.

later12

KyussBishop wrote: »

Create money instead. Doing that is not a hammer for every nail, but you could get rid of that deficit burden from unemployment, by a Job Guarantee program funded by money creation, as I describe here:
https://www.boards.ie/vbulletin/showthread.php?t=2056751652

It's a level of policy that has to be taken up on the EU level, but it seems to barely be in discourse at the moment.

Actually I agree with that to a large extent. I started a thread about the need for greater ECB activity in the EU forum which is still there

http://www.boards.ie/vbulletin/showthread.php?t=2056741836

i'm not denying the need for central bank action at all. But it does have to be accompanies by fiscal discipline.

mollymosfet

But it does have to be accompanies by fiscal discipline.

Why? "Discipline" is a weighted term too. Are you seriously suggesting that it's "good discipline" to cut back more on those who are already struggling?

later12

mollymosfet wrote: »

Why? "Discipline" is a weighted term too. Are you seriously suggesting that it's "good discipline" to cut back more on those who are already struggling?

Fiscal discipline is a widely used economic term, we can call it what you like within reason, I don't mind.

Fiscal discipline is important in line with ECB activity in purchasing Government debt because you don't want inflation to get out of hand in the future; I don't subscribe to the idea that it's a good idea to leave Governments in charge of being both debt salesmen and purchasers of the same debt. That really does amount to printing money.

K-9

mollymosfet wrote: »

Why? "Discipline" is a weighted term too. Are you seriously suggesting that it's "good discipline" to cut back more on those who are already struggling?

Very few aren't struggling to some extent, welfare recipients, public sector workers, people using Government services, house owners expected to pay a property tax after pay tax rises, VAT etc. increases.

You say you aren't against cuts of some nature, I'm wondering what these cuts are then.

Scortho

mollymosfet wrote: »

That has nothing to do with having high welfare, since our welfare rates are actually average at best. Our economy performs poorly partly because we keep contracting and people are unable to grasp the fact that a state is not the same as a household.

First of all I never said the state was anything like a household. But at the end of the day the budget has to be balanced. We cant go on indefinitely borrowing billions. Cuts have to be made. That was one of the reasons we ended up being bailed out in the first place.

Parts of our economy are doing fairly well at the moment especially the likes of the pharmaceutical industry.

Other parts are doing terrible compared to a few years ago. The car dealerships are suffering and certain aspects of retail are suffering. You have to look at the unrealistic situation these sectors are after falling from though.

2003 to 2007 was totally unsustainable. Our domestic economy grew on the basis that Johnny could sell houses to Tom who would then go and flip them on to Mary. It grew on the back of borrowed money that wasnt ours, but was cheap to get our hands on. We thought we could keep on partying and that it would never run out. As a builder recently put it, building sites were like car showrooms, there were that many new cars each week.

mollymosfet wrote: »

Are you listening to anything I've been saying? The economy is not as simple as that. Cutting spending has a negative effect on the economy. If you end up with less money than you started with by contracting the economy - how can you afford to do that? Think before you make these sorts of arguments.

Of course cutting money is going to have an effect on our domestic economy. No doubt about it.
However what will happen if we don't cut spending and we keep borrowing. How much misery is that going to place on your children and your children's children.

mollymosfet wrote: »

But cutting welfare will not, in the long term, raise them any more money. That's the point, and they are taking advantage of the fact that stubborn people such as your self refuse to listen.

The welfare class cannot afford to horde. All of that money goes back into the economy. It's essentially the government giving lots of mini-grants for various businesses, etc.

Cutting welfare won't raise money. I acknowledge that.

However cutting welfare means less money has to be raised elsewhere. It might mean that current income tax bands can remain or tax credits can remain in place.
Rising income tax will mean a fall in the amount of expenditure by those who work. It may discourage some people from working.

At the end of the day no one likes cuts. The budget has to be balanced though. If you have suggestions how welfare can remain the same, without being a disincentive to work and at the same time balancing the budget please share them.

Scortho

KyussBishop wrote: »

Borrowing is not the only option, money creation is a vital alternative for funding this (which is out of reach due to the EU political situation); as I outlined in my previous post, this should be manageable without (or with little) inflation, and would eventually bring down the deficit by increasing economic production, instead of having to use cuts.

Can you suggest how we can create money while currently in the euro?

KyussBishop wrote: »

Cuts always worsen the problem, because it means less money in the local economy, meaning less tax intake, necessitating more cuts; it keeps going on like that until it balances out, at which point severe and unnecessary economic damage has been done (and continues to be done, as the damage is much greater than what is immediately felt).

To see the damage that has and is being done to the local economy, you just have to look at GNP:
http://www.cso.ie/indicators/default.aspx?id=2

Cuts may worsen the problem in the short term, but you have to think about the long term. You have to look at what effect the decisions we make today have on our citizens in 20 or 30 years time.
And they will have effects.

The alternative to cuts is either increasing tax which reduces disposable income or borrowing. Unfortunately we cant borrow to stimulate the economy because of the interest rate of around 5.6%.

mollymosfet

K-9 wrote: »

Very few aren't struggling to some extent, welfare recipients, public sector workers, people using Government services, house owners expected to pay a property tax after pay tax rises, VAT etc. increases.

You say you aren't against cuts of some nature, I'm wondering what these cuts are then.

Less outright cuts and more improving efficiency, as in the likes of the HSE. Means testing certain things like child benefit seems reasonable as well.

Also saying everyone is struggling is detracting from the point that some are struggling more than others. Welfare is meant to be a safety net. It happens that our system is so broken there are individuals with a working wage worse off than those on welfare due to debt, etc.

And that is something that needs to be addressed, but not by cutting welfare, which will only make the problem worse. People on welfare in general tend to be more vulnerable than those who are not. You are talking about the poor and those with disabilities here.

KyussBishop

later12 wrote: »

Fiscal discipline is a widely used economic term, we can call it what you like within reason, I don't mind.

Fiscal discipline is important in line with ECB activity in purchasing Government debt because you don't want inflation to get out of hand in the future; I don't subscribe to the idea that it's a good idea to leave Governments in charge of being both debt salesmen and purchasers of the same debt. That really does amount to printing money.

In the thread I posted though, a significant part of the job guarantee I post about, is actually using it as a mechanism for managing inflation; it is complicated (recommend checking the link I provide), but money creation doesn't have to lead to significant inflation.

Any expenditure based on debt seems (from my point of view) like it will just worsen our position, we need to spend based on created credit (and possibly also have part of our debt extinguished, both public/private, from money creation, but that is separate to the job guarantee I write about).

Scortho wrote:

Can you suggest how we can create money while currently in the euro?

I already have, it has to be lobbied within the EU; it is subject to significant inertia, but it has to be put on the agenda (and currently it seems to be a distant second to austerity policies, so needs to be promoted more earnestly).

Scortho wrote:

Cuts may worsen the problem in the short term, but you have to think about the long term. You have to look at what effect the decisions we make today have on our citizens in 20 or 30 years time.
And they will have effects.

The alternative to cuts is either increasing tax which reduces disposable income or borrowing. Unfortunately we cant borrow to stimulate the economy because of the interest rate of around 5.6%.

You're ignoring the money creation alternative again. Cuts worsen the problem in both the short term and long term; the long term, is a significant reduction in GNP before it starts climbing again (and we have not bottomed out yet).

This is totally unnecessary, and such economic destruction can be ameliorated by expenditure based on money creation.

mollymosfet

Scortho wrote: »

First of all I never said the state was anything like a household. But at the end of the day the budget has to be balanced.

Actually, technically, no it doesn't. A large deficit is undesirable but there's no mandate that we should have a balanced budget. Well, before we were utterly ****ing stupid enough to vote in something that suggests we should.

We cant go on indefinitely borrowing billions. Cuts have to be made.

Cuts do not have to be made. We cannot go on indefinitely making cuts, as we're doing now. This will harm the economy because we'll end up constantly borrowing anyway to make up for the shortfall of the contracting economy.

That was one of the reasons we ended up being bailed out in the first place.

No it wasn't.

Parts of our economy are doing fairly well at the moment especially the likes of the pharmaceutical industry.

Then why are no new jobs being created? Why are both emigration and unemployment still increasing?

2003 to 2007 was totally unsustainable. Our domestic economy grew on the basis that Johnny could sell houses to Tom who would then go and flip them on to Mary. It grew on the back of borrowed money that wasnt ours, but was cheap to get our hands on. We thought we could keep on partying and that it would never run out. As a builder recently put it, building sites were like car showrooms, there were that many new cars each week.

That means we should ensure we do not get to that level of unsustainable again. However, the current issue of welfare has nothing to do with that. It is not above the EU average when accounting for all factors. This is a red herring.

Of course cutting money is going to have an effect on our domestic economy. No doubt about it.
However what will happen if we don't cut spending and we keep borrowing. How much misery is that going to place on your children and your children's children.

But you're acting like we won't have to keep borrowing along with making cuts. The issue is that since you're contracting the economy and undermining consumer confidence among other things, you can't recover an economy simply by cuts. I posted a good link earlier explaining why this idea doesn't work.

Cutting welfare won't raise money. I acknowledge that.

However cutting welfare means less money has to be raised elsewhere. It might mean that current income tax bands can remain or tax credits can remain in place.

How will it do that if it's not raising any money? All it changes is the balance on that particular budget, not the money we have over any reasonable length of time. There is no excuse for that level of short sightedness. If we could welfare, the economy will falter, we'll have to borrow more to make up for a lower tax intake due to an increase in unemployment, emigration and less spending.

Rising income tax will mean a fall in the amount of expenditure by those who work. It may discourage some people from working.

Then don't raise income tax among those who can't afford it. I've posted graphs showing the tax 10% of people actually have more disposable income than pre-recession. There is a line people are using that this isn't just a recession - it's the greatest transference of wealth from the poor to the rich in the history of mankind. And they're right.

At the end of the day no one likes cuts. The budget has to be balanced though.

It's not a question of whether one or not likes them. It's if they do anything at all to address the problem, which they don't. However the sheer lack of human factor in these arguments is staggering - I've pointed out people will die as a result of these cuts and nobody cares.

The problem is obviously that some people are still sheltered and privileged in one way or another.

If you have suggestions how welfare can remain the same, without being a disincentive to work and at the same time balancing the budget please share them.

Again, if you pull the "disincentive to work" line, I'm less likely to take you seriously. The majority of people on the dole want to work.

We do not have to "balance" the budget. We have to address the deficit, but it's reasonable that mid recession we will run a deficit rather than a surplus. When things pick up again - we can have surplus. We should be trying to minimise the deficit, however you fail to understand that your suggested approach would only make the problem worse.

It's bad enough to suggest welfare cuts, worse still you're acting like it's unavoidable.

Honestly? I know a lot of people who are disabled and due to welfare cuts have little funding in terms of therapy and assistance that can help them get back to work. Some of them are barely getting by at all.

But I don't think you care about the human cost in the slightest. I think part of the problem is that people are too far from the reality of how these things affect people.

And either way, that shouldn't even matter because it won't help to decrease the deficit. It will only worsen our debt problem. The problem is that some people are commenting on this that can't grasp how the economy would work contrary to "common sense". I'm aware there are some more "concrete" and intellectual models based around this folly, but I think it's still down to a fundamental misunderstanding.

Scortho

mollymosfet wrote: »

Less outright cuts and more improving efficiency, as in the likes of the HSE. Means testing certain things like child benefit seems reasonable as well.

Also saying everyone is struggling is detracting from the point that some are struggling more than others. Welfare is meant to be a safety net. It happens that our system is so broken there are individuals with a working wage worse off than those on welfare due to debt, etc.

And that is something that needs to be addressed, but not by cutting welfare, which will only make the problem worse. People on welfare in general tend to be more vulnerable than those who are not. You are talking about the poor and those with disabilities here.

I for one would not advocate the cutting of the current welfare rate of 188 for the newly unemployed. In fact Id rather it was dependent on the amount that you paid in over the duration of your employment which gradually decreases over time.

What I would advocate is the cutting of welfare for those who have been long term unemployed, those who haven't made an effort to retrain or up skill or those who have refused to make an effort to get off the dole.

As you said welfare is meant to be a safety net. It is not meant to be there to fund a lifestyle.

The problem with social welfare in this country is the associated benefits that one may be eligible for.

It is these benefits that act as a barrier to work, not the basic JSA and JSB.

KyussBishop

Scortho wrote: »

I for one would not advocate the cutting of the current welfare rate of 188 for the newly unemployed. In fact Id rather it was dependent on the amount that you paid in over the duration of your employment which gradually decreases over time.

What I would advocate is the cutting of welfare for those who have been long term unemployed, those who haven't made an effort to retrain or up skill or those who have refused to make an effort to get off the dole.

As you said welfare is meant to be a safety net. It is not meant to be there to fund a lifestyle.

The problem with social welfare in this country is the associated benefits that one may be eligible for.

It is these benefits that act as a barrier to work, not the basic JSA and JSB.

None of those cuts solve any problems, they cause more suffering of innocent people, because the policies here aimed at the minority of welfare abusers will inevitably impact a much greater number of innocent people.
This also ignores the whole wider problem that it is unemployment that is the problem with welfare, not welfare itself.

There is no barrier to work created by welfare, there is a barrier to work created by a wholly inadequate supply of jobs.
If we are to get people back working, and off welfare, the only way to do that anytime soon is with a job guarantee funded by money creation (not by further debt).

mollymosfet

Look, people want to work. If you are seriously suggesting that people are staying off work because the dole is "Better" then you are not in touch with what is happening with the average joe on the street enough to comment on this. If that was true, then we wouldn't have mass emigration right now. Clearly people WANT to work because they're **** all to do in this expensive country on the dole.

The problem with what you're saying is that it might ironically be acceptable outside of a recession, but many people are "Long term unemployed" now for circumstances entirely beyond their control. There simply aren't enough jobs out there for everyone to take them, or even a decent fraction thereof.

Not everyone qualifies for the "associated benefits", and how much do you think they're worth anyway? If you're on minimum wage, chances are you qualify for something too.

This is not an acceptable basis on which to continue this argument. The issue is whether or not cutting welfare is an acceptable way of dealing with our fiscal issues and so far nobody's given anything.

K-9

mollymosfet wrote: »

Less outright cuts and more improving efficiency, as in the likes of the HSE. Means testing certain things like child benefit seems reasonable as well.

Also saying everyone is struggling is detracting from the point that some are struggling more than others. Welfare is meant to be a safety net. It happens that our system is so broken there are individuals with a working wage worse off than those on welfare due to debt, etc.

And that is something that needs to be addressed, but not by cutting welfare, which will only make the problem worse. People on welfare in general tend to be more vulnerable than those who are not. You are talking about the poor and those with disabilities here.

All very laudable, what level would you set the means test on child benefit at?

EchoO

K-9 wrote: »

All very laudable, what level would you set the means test on child benefit at?

That would be a very delicate calculation, setting the threshold too low would risk another over 70's medical card-type fiasco.

CuriousG

I'm not sure how anyone can call 100e altogether a week too much. Not everyone chooses to be on the dole, and it isn't the nice, cushy life that people imagine.

Thank god you're all employed and don't have to deal with that, I don't think you would be as judgemental if you did.

Geuze

later12 wrote: »

1. Because at €9.5 billion a year, the exchequer is spending more on Social Protection than any other department. Abolishing the entire

DSP exp is about 20-21bn pa.

You may be referring to exp by the SIF, which is part of the 21bn total.

Geuze

While I am somewhat symapthetic to Mollymosfet's argument, I will make the following points:

The budget deficit is too big (no matter what your ideology)
The budget deficit must be reduced
Doing nothing is not an option
Tax revenues must rise
Public spending must fall

All of the above are true, there is no other way.

Even with decisive action by the ECB, even with a round of QE, there would still have to be fiscal contraction.

What mix of tax rises and spending cuts is best is debateable.

A fall in overall welfare spending will be part of the mix.

You may want other areas to take bigger "hits", to try and "protect the vulnerable", and I agree with you in some ways.

Yes, it's true that most welfare exp is spent by the recipient, and not saved, and so reducing overall DSP exp will hurt consumption. Yes, true.

Scortho

mollymosfet wrote: »

Actually, technically, no it doesn't. A large deficit is undesirable but there's no mandate that we should have a balanced budget. Well, before we were utterly ****ing stupid enough to vote in something that suggests we should.



Cuts do not have to be made. We cannot go on indefinitely making cuts, as we're doing now. This will harm the economy because we'll end up constantly borrowing anyway to make up for the shortfall of the contracting economy.



No it wasn't.



Then why are no new jobs being created? Why are both emigration and unemployment still increasing?



That means we should ensure we do not get to that level of unsustainable again. However, the current issue of welfare has nothing to do with that. It is not above the EU average when accounting for all factors. This is a red herring.




But you're acting like we won't have to keep borrowing along with making cuts. The issue is that since you're contracting the economy and undermining consumer confidence among other things, you can't recover an economy simply by cuts. I posted a good link earlier explaining why this idea doesn't work.



How will it do that if it's not raising any money? All it changes is the balance on that particular budget, not the money we have over any reasonable length of time. There is no excuse for that level of short sightedness. If we could welfare, the economy will falter, we'll have to borrow more to make up for a lower tax intake due to an increase in unemployment, emigration and less spending.



Then don't raise income tax among those who can't afford it. I've posted graphs showing the tax 10% of people actually have more disposable income than pre-recession. There is a line people are using that this isn't just a recession - it's the greatest transference of wealth from the poor to the rich in the history of mankind. And they're right.



It's not a question of whether one or not likes them. It's if they do anything at all to address the problem, which they don't. However the sheer lack of human factor in these arguments is staggering - I've pointed out people will die as a result of these cuts and nobody cares.

The problem is obviously that some people are still sheltered and privileged in one way or another.



Again, if you pull the "disincentive to work" line, I'm less likely to take you seriously. The majority of people on the dole want to work.

We do not have to "balance" the budget. We have to address the deficit, but it's reasonable that mid recession we will run a deficit rather than a surplus. When things pick up again - we can have surplus. We should be trying to minimise the deficit, however you fail to understand that your suggested approach would only make the problem worse.

It's bad enough to suggest welfare cuts, worse still you're acting like it's unavoidable.

Honestly? I know a lot of people who are disabled and due to welfare cuts have little funding in terms of therapy and assistance that can help them get back to work. Some of them are barely getting by at all.

But I don't think you care about the human cost in the slightest. I think part of the problem is that people are too far from the reality of how these things affect people.

And either way, that shouldn't even matter because it won't help to decrease the deficit. It will only worsen our debt problem. The problem is that some people are commenting on this that can't grasp how the economy would work contrary to "common sense". I'm aware there are some more "concrete" and intellectual models based around this folly, but I think it's still down to a fundamental misunderstanding.

KyussBishop wrote: »

In the thread I posted though, a significant part of the job guarantee I post about, is actually using it as a mechanism for managing inflation; it is complicated (recommend checking the link I provide), but money creation doesn't have to lead to significant inflation.

Any expenditure based on debt seems (from my point of view) like it will just worsen our position, we need to spend based on created credit (and possibly also have part of our debt extinguished, both public/private, from money creation, but that is separate to the job guarantee I write about).


I already have, it has to be lobbied within the EU; it is subject to significant inertia, but it has to be put on the agenda (and currently it seems to be a distant second to austerity policies, so needs to be promoted more earnestly).


You're ignoring the money creation alternative again. Cuts worsen the problem in both the short term and long term; the long term, is a significant reduction in GNP before it starts climbing again (and we have not bottomed out yet).

This is totally unnecessary, and such economic destruction can be ameliorated by expenditure based on money creation.

KyussBishop wrote: »

None of those cuts solve any problems, they cause more suffering of innocent people, because the policies here aimed at the minority of welfare abusers will inevitably impact a much greater number of innocent people.
This also ignores the whole wider problem that it is unemployment that is the problem with welfare, not welfare itself.

There is no barrier to work created by welfare, there is a barrier to work created by a wholly inadequate supply of jobs.
If we are to get people back working, and off welfare, the only way to do that anytime soon is with a job guarantee funded by money creation (not by further debt).

On the matter of a deficit, no it is not the worst thing if it is small. In fact many economists will argue for a cyclical balanced budget where it is not balanced year to year but is balanced over a certain economic cycle.

The problem at the moment is that the budget deficit is too large to be balanced in the next few years as the growth will only me modest. If we are to run with a deficit that was as high as it was in the last few years, we would need some serious amount of growth each year. The way things are looking, we'll be lucky to get a 3% growth each year from 2015 onwards.

We were forced into a bailout for two reasons
Due to the collapse of our banking system and our decision to guarantee them,
and because we were spending more than we were taking in.

The debts occurred as a result of the bailout look as though they will be taken off our national debt by Europe. This will lower our debt/gdp ratio which should reduce the basis point spread between ourselves and Germany.

this alone will not solve our problems however.
When we look to the bond markets for money, one of the things that they will look at is our ability to repay the debt. If they see a large deficit of 9% the interest that they will charge will be significantly more than what it would be if our deficit was 3%. With a lower deficit, we will have lower interest rates which will allow the government to borrow money to help stimulate the economy.

Department of Social Protection's expenditure accounts for a large amount of our budget. As a result we have to cut certain aspects of it
Without cutting health, or education, where else do you suggest we cut, as we have to get our deficit down to 3%. This will involve some tax increases and spending cuts.

We can't touch Public sector pay. While the low wages of public sector workers are protected under Croke Park, the high wages are also protected.

The IMF will only act as the lender of last resort. They will not provide stimulus packages. It is up to ourselves

Scortho

KyussBishop wrote: »

In the thread


I already have, it has to be lobbied within the EU; it is subject to significant inertia, but it has to be put on the agenda (and currently it seems to be a distant second to austerity policies, so needs to be promoted more earnestly).


You're ignoring the money creation alternative again. Cuts worsen the problem in both the short term and long term; the long term, is a significant reduction in GNP before it starts climbing again (and we have not bottomed out yet).

This is totally unnecessary, and such economic destruction can be ameliorated by expenditure based on money creation.

On the matter of creating money/printing money I totally agree that we need to do this. As you said however, it requires a complete change of mind by the ECB. Although we are part of the ECB, it can’t make decisions that just effect Ireland. It also has to look at how a devaluation/increase in the supply money will effect the major economies of the Eurozone.


Job guarantee schemes are all well and good. However if there was demand in the economy from employers to create 450000 jobs, do you not think they'd have done so already.

Count Dooku

mollymosfet wrote: »

Cuts do not have to be made. We cannot go on indefinitely making cuts, as we're doing now. This will harm the economy because we'll end up constantly borrowing anyway to make up for the shortfall of the contracting economy.

Cuts have to be made because nobody want to lend us money

mollymosfet wrote: »

Then why are no new jobs being created? Why are both emigration and unemployment still increasing?

There are a lot of jobs created for high skilled workers, main reason for lack of jobs for low skilled workforce is that low skilled workers are massively overpaid in comparison with rest of world, which affect competitiveness of businesses working for export

mollymosfet wrote: »

That means we should ensure we do not get to that level of unsustainable again. However, the current issue of welfare has nothing to do with that. It is not above the EU average when accounting for all factors. This is a red herring.

Our deficit is much bigger than EU average

mollymosfet wrote: »

But you're acting like we won't have to keep borrowing along with making cuts. The issue is that since you're contracting the economy and undermining consumer confidence among other things, you can't recover an economy simply by cuts.

Tax increases will have same effect and will damage economy more because it will be less incentive to work, especially for low skilled workforce

mollymosfet wrote: »

How will it do that if it's not raising any money? All it changes is the balance on that particular budget, not the money we have over any reasonable length of time. There is no excuse for that level of short sightedness. If we could welfare, the economy will falter, we'll have to borrow more to make up for a lower tax intake due to an increase in unemployment, emigration and less spending.

Welfare benefits were preserved for 2 years and it didn't save GNP

mollymosfet wrote: »

Then don't raise income tax among those who can't afford it. I've posted graphs showing the tax 10% of people actually have more disposable income than pre-recession.

It is not recession, it is hangover after property bubble party

mollymosfet wrote: »

The problem is obviously that some people are still sheltered and privileged in one way or another.

Do you mean "most vulnerable"?

mollymosfet wrote: »

Again, if you pull the "disincentive to work" line, I'm less likely to take you seriously. The majority of people on the dole want to work.

Mostly if they will be paid more than on dole for jobs what they like, but there is no such demand now and wont be until next property bubble

mollymosfet wrote: »

We do not have to "balance" the budget. We have to address the deficit, but it's reasonable that mid recession we will run a deficit rather than a surplus. When things pick up again - we can have surplus. We should be trying to minimise the deficit, however you fail to understand that your suggested approach would only make the problem worse.

As I mentioned property bubble wont return for at least two decades and our spending is still based on incomes from property bubble .

mollymosfet wrote: »

It's bad enough to suggest welfare cuts, worse still you're acting like it's unavoidable.

Ireland won't be first country to implement welfare cuts, Germany and Sweden did it few years ago and it only improved their economies

mollymosfet wrote: »

And either way, that shouldn't even matter because it won't help to decrease the deficit. It will only worsen our debt problem.

Of coarse, 10Bn cuts won't save 10Bn, it will be around 6-7Bn, but still it will save a lot

later12

Geuze wrote: »

DSP exp is about 20-21bn pa.

You may be referring to exp by the SIF, which is part of the 21bn total.

No I was referring to Net Voted Expenditure in the year to date, which comes to €9.5 billion. NVE is a more useful figure to use in the context of comparing Departmental spending. The profile for 2012 is expected to come in around €13 billion.

Either way, it's an enormous figure and it's going to be impossible to close the deficit without affecting Social Protection expenditure.

KyussBishop

Scortho wrote: »

On the matter of creating money/printing money I totally agree that we need to do this. As you said however, it requires a complete change of mind by the ECB. Although we are part of the ECB, it can’t make decisions that just effect Ireland. It also has to look at how a devaluation/increase in the supply money will effect the major economies of the Eurozone.


Job guarantee schemes are all well and good. However if there was demand in the economy from employers to create 450000 jobs, do you not think they'd have done so already.

The job guarantee creates public jobs temporarily, and is also a mechanism for managing price inflation (avoiding or ameliorating inflation/devaluation); the government would use printed money to fund this.

A job guarantee is likely something that would need to be taken part in across Europe, probably with a pilot program somewhere first (and with the state Ireland is in, we'd be a good candidate for that pilot); it does not have to lead to inflation/devaluation, and it's something that needs to be lobbied for at an EU level.

Discussion here on boards which is limited in scope to Ireland is wrong, because that only allows options that harm our economy more; control over currency is so central to a countries sovereignty, and is the path to less harmful solutions, such that discourse should focus on EU action not on Ireland.

Farmer Pudsey

mollymosfet wrote: »

Means testing certain things like child benefit seems reasonable as well.

Also saying everyone is struggling is detracting from the point that some are struggling more than others. Welfare is meant to be a safety net. It happens that our system is so broken there are individuals with a working wage worse off than those on welfare due to debt, etc.

And that is something that needs to be addressed, but not by cutting welfare, which will only make the problem worse. People on welfare in general tend to be more vulnerable than those who are not. You are talking about the poor and those with disabilities here.

At what level would we means test CB for it to be worth while to the exchequer we would need to have it set at around 50K this would again discourage people from going back to work. Also most other countries have a tax credit for childern or tax relief on creshe fees.

Yes our system is broken so how vcan we fix it. We have a ststem where a single person on the social welfare needs at least 400 euro's/week to go back to work and double that for a married couple to break even.

KyussBishop wrote: »

None of those cuts solve any problems, they cause more suffering of innocent people, because the policies here aimed at the minority of welfare abusers will inevitably impact a much greater number of innocent people.
This also ignores the whole wider problem that it is unemployment that is the problem with welfare, not welfare itself.

There is no barrier to work created by welfare, there is a barrier to work created by a wholly inadequate supply of jobs.
If we are to get people back working, and off welfare, the only way to do that anytime soon is with a job guarantee funded by money creation (not by further debt).

Targeted cuts often are more unfair rather than a general cut accross the system. Often targated cuts hits certain inviduals for maybe alot of there income while a 5% cut accross the whole system often is more fair.

Yes unemployment is the isue however because of the welfare rates and side benifits it would cost an employer around 500 euro's/week at a minimum to take on an employee between wages, holiday pay and employer PRSI because of the competition of welfare. Then he has all the associated costs of his buisness. This is why tourism is wiped out we cannot compete with other destinations any longer

mollymosfet wrote: »

Look, people want to work. If you are seriously suggesting that people are staying off work because the dole is "Better" then you are not in touch with what is happening with the average joe on the street enough to comment on this. If that was true, then we wouldn't have mass emigration right now. Clearly people WANT to work because they're **** all to do in this expensive country on the dole.

The problem with what you're saying is that it might ironically be acceptable outside of a recession, but many people are "Long term unemployed" now for circumstances entirely beyond their control. There simply aren't enough jobs out there for everyone to take them, or even a decent fraction thereof.

Not everyone qualifies for the "associated benefits", and how much do you think they're worth anyway? If you're on minimum wage, chances are you qualify for something too.

This is not an acceptable basis on which to continue this argument. The issue is whether or not cutting welfare is an acceptable way of dealing with our fiscal issues and so far nobody's given anything.

I agree with a lot of what you are saying but our big issue is we need to find 3.5 billoin in the next budget do we tax private sector workers who on average earn 611 euro's/ week . Do we tax/means test CB on young families earning a little above 50K like we means test college grants. Do we force them to pay property tax and water rates while granting waivers to the unemployed. Do we leave them without medical cards and increas the price of car fuel on them.

this is what we have being doing in the last few budgets do we continue.

Good loser

later12 wrote: »

No I was referring to Net Voted Expenditure in the year to date, which comes to €9.5 billion. NVE is a more useful figure to use in the context of comparing Departmental spending. The profile for 2012 is expected to come in around €13 billion.

Either way, it's an enormous figure and it's going to be impossible to close the deficit without affecting Social Protection expenditure.

Later what do you mean by above?

Does the DSP per annum cost around €20 bn or does it cost the €13 bn of NVE?

What explains the difference? If DSP was cut 5% would that save €1 bn or €650 m?

Idbatterim

save it from all Ps, CS and HSE, Semi States, local authorities, billions are being wasted there every year, and the vast majority of staff in these positions are by far the least vulnerable, if the government really do want to protect "the most vulnerable"... :rolleyes:

KyussBishop

Farmer Pudsey wrote: »

Targeted cuts often are more unfair rather than a general cut accross the system. Often targated cuts hits certain inviduals for maybe alot of there income while a 5% cut accross the whole system often is more fair.

Yes unemployment is the isue however because of the welfare rates and side benifits it would cost an employer around 500 euro's/week at a minimum to take on an employee between wages, holiday pay and employer PRSI because of the competition of welfare. Then he has all the associated costs of his buisness. This is why tourism is wiped out we cannot compete with other destinations any longer

The job guarantee provides public employment though, brought from money creation.

A more general note:
By moving off unemployment into a job guarantee program (funded by money creation), we would be at a budget surplus.

ART6

KyussBishop wrote: »

The job guarantee provides public employment though, brought from money creation.

A more general note:
By moving off unemployment into a job guarantee program (funded by money creation), we would be at a budget surplus.

The problem with relying upon job growth to reduce the welfare bill is that the lack of jobs isn't going to improve over the years. Instead it can only get worse. The reason is that with manufacturing processes becoming increasingly automated the number of people needed to make a thousand widgets or whatever is going down all of the time, and it is manufacturing that brings in the money through exports etc. Labour is generally the highest cost and manufacturer bears, particularly when it is increased by government's taxes etc., and there is every incentive to reduce it. The time is fast approaching (if it isn't already here in some sectors) where the only jobs are those that need high skills or high levels of education. Outside of, possibly, construction, where will be the jobs for the unskilled or semi-skilled?

As an example, one of my last jobs before my retirement was to design and construct a biofuels plant that produced 250,000 tonnes of biofuels a year. The plant was fully automated and was operated by three men -- two loading raw materials into the process lines, and one in a control room with the boring task of simply watching everything happening as the computers worked the machines. I could have designed it to run without any workers at all, but the client didn't want that. Twenty years ago such a plant would have required at least seventy men to operate it!

Geuze

Good loser wrote: »

Later what do you mean by above?

Does the DSP per annum cost around €20 bn or does it cost the €13 bn of NVE?

What explains the difference? If DSP was cut 5% would that save €1 bn or €650 m?

Govt exp on Social Protection will be about 20-21bn for the year 2012.

See page 20:


http://budget.gov.ie/budgets/2012/Documents/CER%20-%20Estimates%20Final%20Part%202.pdf

K-9

Good loser wrote: »

Later what do you mean by above?

Does the DSP per annum cost around €20 bn or does it cost the €13 bn of NVE?

What explains the difference? If DSP was cut 5% would that save €1 bn or €650 m?

It would save €650 Million not €1 Billion. The overall figure includes the pay bill for the Department.

Good loser

K-9 wrote: »

It would save €650 Million not €1 Billion. The overall figure includes the pay bill for the Department.

Surely the pay bill isn't €7 bn per annum?

K-9

Good loser wrote: »

Surely the pay bill isn't €7 bn per annum?

Nearly that IIRC, it's in the link. Welfare obviously takes up a big part of the pay bill.

BOHSBOHS

7billion paybill for DSP staff? thats about 1.4 million a year each lol
overpaid public sector!!:P

no
net voted exp is what comes from the exchequer
gross exp (21bn) includes prsi stuff (insurance fund)

so a 5% cut on all payments would "save" about a billion

EchoO

There was an interesting exchange between Joan Burton and Sean O' Rourke on RTE's news on one the other day. O'Rourke was putting the recommendations in the latest IMF review to Burton and she replied that the Government's agreement is with the Troika and not the IMF and the IMF's recommendations were not part of that agreement.

Red Crow

EchoO wrote: »

There was an interesting exchange between Joan Burton and Sean O' Rourke on RTE's news on one the other day. O'Rourke was putting the recommendations in the latest IMF review to Burton and she replied that the Government's agreement is with the Troika and not the IMF and the IMF's recommendations were not part of that agreement.

But isn't the IMF part of the Troika?

EchoO

Eli Manning wrote: »

But isn't the IMF part of the Troika?

She did acknowledge that and was being careful not create "Burton slams IMF" headlines. Her point was - we are not bound by those recommendations.

Farmer Pudsey

KyussBishop wrote: »

The job guarantee provides public employment though, brought from money creation.

A more general note:
By moving off unemployment into a job guarantee program (funded by money creation), we would be at a budget surplus.

This goes back to the theory that governments can creates jobs. real sustainable jobs can only be created if you are creating a product/service. government idealy can create the envoirment that will allow employer's to take on workers.

Idealy you need to create jobs in the exporting sector. There is huge concentration on the high skilled IT sector. However it is at the bottem of the foodchain we need work for low or semi skilled workers. If we manage we need to have a situtation where the finiancal encouragment is there for workers to take up these jobs. At present most low paid jobs seem only to be attracting non nationals as Irish workers seem to be reluctant to take up these jobs.

If we can create jobs in food production and Tourism it may well give the impedus for other sectors to create jobs off it. However a lot of these jobs would pay only between 17-25K and may only be seasonal. the issue then is would a young family be better off with an income of 40K or be on welfare.

At present on this income they would recieve very little support from the state nad have to pay about 6K between tax, prsi and USC. At 35K earning's they would pay about 2K. They may or may not recieve FIS however with child care costs and work related costs it is quite possible that they would be better of on welfare.

Maybe if we had a free health system where GP costs are picked up and as well a creshe/childcare package for workers it would be possible but with our systen it is unlikly these people will be encouraged back to work especiall if only one has work

later12

Yes Bohsbohs is correct - I am separating exchequer spending from social insurance because I just happen to think that leaving social insurance aside is a fairer way of comparing net departmental expenditure.

The point being that exchequer spending on social protection, which dwarfs other departmental expenditure, is far too significant to go untouched.

Tea drinker

Idbatterim wrote: »

save it from all Ps, CS and HSE, Semi States, local authorities, billions are being wasted there every year, and the vast majority of staff in these positions are by far the least vulnerable, if the government really do want to protect "the most vulnerable"... :rolleyes:

protected by the gov, the unions and sections of the meeja. Truly the least vulnerable. There could be babies beeing born on the side of the road and still the culture of no cuts to pay or allowances would be enshrined.

KyussBishop

ART6 wrote: »

The problem with relying upon job growth to reduce the welfare bill is that the lack of jobs isn't going to improve over the years. Instead it can only get worse. The reason is that with manufacturing processes becoming increasingly automated the number of people needed to make a thousand widgets or whatever is going down all of the time, and it is manufacturing that brings in the money through exports etc. Labour is generally the highest cost and manufacturer bears, particularly when it is increased by government's taxes etc., and there is every incentive to reduce it. The time is fast approaching (if it isn't already here in some sectors) where the only jobs are those that need high skills or high levels of education. Outside of, possibly, construction, where will be the jobs for the unskilled or semi-skilled?

As an example, one of my last jobs before my retirement was to design and construct a biofuels plant that produced 250,000 tonnes of biofuels a year. The plant was fully automated and was operated by three men -- two loading raw materials into the process lines, and one in a control room with the boring task of simply watching everything happening as the computers worked the machines. I could have designed it to run without any workers at all, but the client didn't want that. Twenty years ago such a plant would have required at least seventy men to operate it!

The economy is gripped by debt deflation at the moment though, with a lot of people (particularly the unemployed) left without adequate disposable income to spur demand; a job guarantee (and a debt jubilee perhaps) would eat into this problem by providing more income into workers hands to alleviate debt, and provide increase demand to private industry as well, which would gradually return the economy to a healthy state.

As private industry recovers through that increase in demand/activity, jobs would move back from the jobs guarantee program into private industry.

Your points on skilled workers are very good too, and this is where the job guarantee also is very beneficial:
It can keep people skilled, and provide opportunities for retraining into other industries; finding the right job programs in the job guarantee may be difficult to manage without competing with private industry, but it provides an excellent opportunity to keep peoples skills sharp and provide retraining.

As things are now, unemployment does not just provide in immediate cost in welfare and lost productivity, but it provides a cost which will last a decade or more past the end of the recession, caused by workers losing skills and not having adequate opportunity to keep sharp or retrain.

KyussBishop

Farmer Pudsey wrote: »

This goes back to the theory that governments can creates jobs. real sustainable jobs can only be created if you are creating a product/service. government idealy can create the envoirment that will allow employer's to take on workers.

Idealy you need to create jobs in the exporting sector. There is huge concentration on the high skilled IT sector. However it is at the bottem of the foodchain we need work for low or semi skilled workers. If we manage we need to have a situtation where the finiancal encouragment is there for workers to take up these jobs. At present most low paid jobs seem only to be attracting non nationals as Irish workers seem to be reluctant to take up these jobs.

If we can create jobs in food production and Tourism it may well give the impedus for other sectors to create jobs off it. However a lot of these jobs would pay only between 17-25K and may only be seasonal. the issue then is would a young family be better off with an income of 40K or be on welfare.

At present on this income they would recieve very little support from the state nad have to pay about 6K between tax, prsi and USC. At 35K earning's they would pay about 2K. They may or may not recieve FIS however with child care costs and work related costs it is quite possible that they would be better of on welfare.

Maybe if we had a free health system where GP costs are picked up and as well a creshe/childcare package for workers it would be possible but with our systen it is unlikly these people will be encouraged back to work especiall if only one has work

Governments do provide jobs, in the public sector. Government also enables private industry to create jobs, through the entire money creation process, and by money provided to the economy through public services as well (and by public expenditure on infrastructure etc.).

Right now the problem is not workers willingness to take up jobs as you put it, but business being unwilling to employ more workers; government stepping in to provide that employment (funded by money creation), provides a lot more flexibility and ability to avoid inflation, than private industry doing the same.


If we have a job guarantee as well, we can also force people into work by cutting off their unemployment payments after a time, if they refuse to even go into the job guarantee program (something people who post about welfare scroungers should like ); if they don't like the offerings in the job guarantee program, they have their pick available from jobs in the private industry.

Cutting people off welfare like this without a job guarantee would be kind of draconian, but with the job guarantee this gets rid of the unproductive welfare hole in the budget, while still providing people a way to make a living (and more productively too).

Count Dooku

KyussBishop wrote: »

Governments do provide jobs, in the public sector. Government also enables private industry to create jobs, through the entire money creation process, and by money provided to the economy through public services as well (and by public expenditure on infrastructure etc.).

Right now the problem is not workers willingness to take up jobs as you put it, but business being unwilling to employ more workers; government stepping in to provide that employment (funded by money creation), provides a lot more flexibility and ability to avoid inflation, than private industry doing the same.

Your explanation will work only for self-sufficent countries, not for country which import nearly everything
This is why most of money created by export sector and government without control of own currency cannot add much to it

christmas2012

188 per single person is not high enough in this economic climate,its low enough i could barely survive on it when i was on it..

Farmer Pudsey

KyussBishop wrote: »

Governments do provide jobs, in the public sector. Government also enables private industry to create jobs, through the entire money creation process, and by money provided to the economy through public services as well (and by public expenditure on infrastructure etc.).

Right now the problem is not workers willingness to take up jobs as you put it, but business being unwilling to employ more workers; government stepping in to provide that employment (funded by money creation), provides a lot more flexibility and ability to avoid inflation, than private industry doing the same.


If we have a job guarantee as well, we can also force people into work by cutting off their unemployment payments after a time, if they refuse to even go into the job guarantee program (something people who post about welfare scroungers should like ); if they don't like the offerings in the job guarantee program, they have their pick available from jobs in the private industry.

Cutting people off welfare like this without a job guarantee would be kind of draconian, but with the job guarantee this gets rid of the unproductive welfare hole in the budget, while still providing people a way to make a living (and more productively too).

We have a piblic service that is over staffed we may have gaps in it here and there but in general we have too many public servants.

I do not know what you mean by a job guarantee I presume it is something like that if you complete a training cource that you are gaurantee a job.

There can be no gaurantee how can you force employer's to take on workers if you subsidise or allow them workers for a lower rate you make another employer uncompeditive who lets staff off.

Government do not enable the private all they can do is create an envoirment where employers can employ people. At present that envoirment is in general a situtation where an employee costs a minimum of 500 euro's/week work.

I do not advocate cutting off welfare but rather that decisions have to be made they should be to encourage people to consider low paid work. For a lot of people this is the only work that is available. Go into any convience shop, Aldi, Lidl, Dunnes, over half the employees are non nationals I believe that this is because a lot of Irish workers are happier on the dole.

There is a hardcore of at least 100K workers that have no intension of going back to work. If the government decided that it was going to cut welfare by 5% a year for the next 3-4 years it would encourage people to consider there choices and opt for low paid work rather than Welfare. We should then support these workers through FIS and medical cards and not tax there CB and have realistic college grant means tests.

Good loser

EchoO wrote: »

There was an interesting exchange between Joan Burton and Sean O' Rourke on RTE's news on one the other day. O'Rourke was putting the recommendations in the latest IMF review to Burton and she replied that the Government's agreement is with the Troika and not the IMF and the IMF's recommendations were not part of that agreement.

That woman's an insufferable windbag. Goes on and on and on in her interviews.

Was praising herself last year for not delivering the SW cuts that were required of her.

Reckon Gilmore and Kenny are afraid of her.

Bet she'll dodge her responsibilities again this year.