National Debt

seetru

We are already paying the bones of 10 Billion in interest payments, if we were to strip that out of the equation we would not be far off having a balanced budget! So surely the time is ripe to tell Europe and our other debt holders that they must take a reasonable haircut on our unsustainable debt mountain or else we move forward with a balanced budget by writing off our existing debt. Not rocket science merely common sense? In other words if we don't get a fair deal suffer the consequences!

rameire

i think this may be covered under the sale of goods and supply of services act.
not sure what section though.

sandin

seetru wrote: »

We are already paying the bones of 10 Billion in interest payments, if we were to strip that out of the equation we would not be far off having a balanced budget! So surely the time is ripe to tell Europe and our other debt holders that they must take a reasonable haircut on our unsustainable debt mountain or else we move forward with a balanced budget by writing off our existing debt. Not rocket science merely common sense? In other words if we don't get a fair deal suffer the consequences!

so if you borrowed 10k for aib and signed a repayment form and then told them to eff off, what would they do?

Even you you managed to evade them, what are your chances of getting anotehr loan in the future.

And also if you had a business and you wanted to sell to them, do you think they'd buy from you?

noodler

Alot of our interest is our own burden.

We have or are borrowing 40bn for the banks (another 20bn or so came from Exchequer and NPRF reserves).

I'd have to do more detailed breakdown but roughly 70% of the National Debt is due to borrowings to fund public services.

EDIT: I estimate anyway of the top of my head.

bnt

In theory (simplified version), an "unsecured" bond holder is getting a higher rate of interest ("bond yield") for taking the risk that the borrower may default. A lender who can't handle that risk would invest in a "secured" bond and get a lower yield.

So, the contract on an unsecured bond would allow for the possibility of default. But, as already noted, the problem with defaulting on any bond is what happens the next time you want to borrow money: the yields will go up. It's the economic version of burning a bridge after you cross it: rebuilding the bridge (trust) will cost money.

andrew

Moved to Irish economy forum

johnnyskeleton

seetru wrote: »

We are already paying the bones of 10 Billion in interest payments, if we were to strip that out of the equation we would not be far off having a balanced budget! So surely the time is ripe to tell Europe and our other debt holders that they must take a reasonable haircut on our unsustainable debt mountain or else we move forward with a balanced budget by writing off our existing debt. Not rocket science merely common sense? In other words if we don't get a fair deal suffer the consequences!

Where are you getting your info from? Because obviously whichever interest groups spin got to you was very effective.

The November figures are here:

http://www.finance.gov.ie/documents/exchequerstatements/2012/excheqstatnov2012.pdf

The loan servicing cost for 2012 will be in the region of 5-6bn. The deficit excluding loan servicing is estimated at c 7-9bn

So even if we refused to pay anything on any of those loans, we would still have 7bn to deal with. There can also be nasty surprises in December as well so I wouldn't be all that confident we can keep to a mere 12-14bn deficit.

As set out above, if we renege on our debts no one else will lend to us, so closing that deficit is a difficult matter. A reduction in interest would make some difference, but in reality it would just be a year or two extra interest caused by our current level of deficit, and we would soon be back to square one.

noodler

johnnyskeleton wrote: »

Where are you getting your info from? Because obviously whichever interest groups spin got to you was very effective.

The November figures are here:

http://www.finance.gov.ie/documents/exchequerstatements/2012/excheqstatnov2012.pdf

The loan servicing cost for 2012 will be in the region of 5-6bn. The deficit excluding loan servicing is estimated at c 7-9bn

So even if we refused to pay anything on any of those loans, we would still have 7bn to deal with. There can also be nasty surprises in December as well so I wouldn't be all that confident we can keep to a mere 12-14bn deficit.

As set out above, if we renege on our debts no one else will lend to us, so closing that deficit is a difficult matter. A reduction in interest would make some difference, but in reality it would just be a year or two extra interest caused by our current level of deficit, and we would soon be back to square one.

Interest forecast for next year is well over 9bn.

Page 35 of the Medium Term Fiscal Statement from the DoF.

http://budget.gov.ie/budgets/2013/Documents/Medium%20Term%20Fiscal%20Statement%20November%202012.pdf