ECB and Ireland deal finally REACHED

coolshannagh28

By far the most interesting aspect of this deal is that our government came out on top , as I pointed out at the time they forced the ECB s hand .
This can only give them confidence in their further dealings with europe and may also give them the courage to sort out the real structural problems in our economy which they have been avoiding so far.

JenPacific

This deal involves adding a colossal chunk of interest to the debt. It's a very, very bad deal. The way the game seems to be played is that one government takes one step toward selling off the future of the Irish economy, then the next government gets to blame the other one for "making it necessary" to take even direr steps. By the time this debt is paid off, presumably every asset owned by the Irish people will have been sold off to finance the debt, most likely in a series of emergency sessions in the small hours of the night. Goodbye Irish Rail, goodbye Bord Gais, goodbye Aer Lingus, goodbye Irish Life and Permanent. Never mind that you belong to Ireland, that you should be assets for future generations to benefit from. The bankers running the government have plans to sell you off to some lucky private firm.

shedweller

Ok, it has bee shown that inflation will reduce the debt burden. That cannot be argued against. But we still have to not make the same mistakes again. I'd be interested to hear how we would be better off making the same mistakes again. You know, selling off yet more of the countrys assets, lobbing more "tax for nothing" onto everyone. How can i boost the economy when the govt has taken my money before i get the chance to spend it?
Thats how joe soap boosts the economy isn't it?

djpbarry

JenPacific wrote: »

This deal involves adding a colossal chunk of interest to the debt. It's a very, very bad deal. The way the game seems to be played is that one government takes one step toward selling off the future of the Irish economy, then the next government gets to blame the other one for "making it necessary" to take even direr steps. By the time this debt is paid off, presumably every asset owned by the Irish people will have been sold off to finance the debt, most likely in a series of emergency sessions in the small hours of the night. Goodbye Irish Rail, goodbye Bord Gais, goodbye Aer Lingus, goodbye Irish Life and Permanent. Never mind that you belong to Ireland, that you should be assets for future generations to benefit from. The bankers running the government have plans to sell you off to some lucky private firm.

Who needs hard figures when you've got hyperbole, eh?

KyussBishop

Good synopsis of the state of things (within EU and specifically Ireland after the deal) from Yanis Varoufakis:
http://yanisvaroufakis.eu/2013/02/10/are-ireland-and-portugal-out-of-the-woods/

space_man

KyussBishop wrote: »

Good synopsis of the state of things (within EU and specifically Ireland after the deal) from Yanis Varoufakis:
http://yanisvaroufakis.eu/2013/02/10/are-ireland-and-portugal-out-of-the-woods/

very illuminating piece.
somehow i dont think intellectual heayweights the EMC Kenny, Noonan, Gilmore & Howlin have read this, do you?

K-9

KyussBishop wrote: »

Good synopsis of the state of things (within EU and specifically Ireland after the deal) from Yanis Varoufakis:
http://yanisvaroufakis.eu/2013/02/10/are-ireland-and-portugal-out-of-the-woods/

Whatever about the others I can't see how anybody could call our austerity a failure, we've got about €50 Billion over the last few budgets to help us cut the deficit. The next problem will be interest costs on debt and while the deal will help in that regard, it's going to be the big problem for the next few years.

Curly Judge

My attempt to understand this latest deal with the ECB:
Imagine that through mismanagement, greed and stupidity you and your business partner got yourselves so far into hock that your bank manager finally threw the book and threatened to foreclose.
After ditching [temporarily] your profligate partner and after much arguing you got the bank manager to put off the evil day while you looked around for someone to help you out of your financial cul de sac.
Your first call was cousin Ger, a hard headed businessman, who had come through a crisis of his own some time previously. He had been very helpful in the past and had even gone guarantor for some of your loans.
However on this occasion he gave you the bums rush and reminded you that when he was in trouble previously you were nowhere to be seen.
You reminded him that if you went to the wall he would suffer also as some of the loans he had guaranteed for you would be called in.
But cousin Ger had done the math and come to the conclusion that throwing good money after bad was not a good idea. Moreover he decided to advise all the other cousins to steer clear of you.
After relenting slightly - in order to prevent a very painful family row and because he felt a slight amount of guilt for helping you get soft loans in the past, Cousin Ger puts in a good word for you with [his] Cousin Mario.
You go to Cousin Mario and after much begging and pleading you, miraculously, talk them into taking over your loans on a much extended maturity date and a lower interest rate.

Will it work?

Well, it all depends on how you conduct business into the future.
You will have to hold the line and make sure that that the hatches stay battened down and the helmsman steers straight into wind.
The casually employed below deck crew complain that none of the debt was theirs to begin with and that they should not be held responsible for any of it, somehow forgetting that their demands for higher wages led to some of the problem.
The permanently employed [???] above deck pen pushers steadfastly refuse to admit that their demands in the past have partially led to the crisis in the first place. Not only that, but they refuse to alter their ways into the future.
As soon as temporarily clear waters open the malcontent partner will make a comeback -entourage in tow - whipping up discontent and promising a chicken in every pot without explaining where it's to come from.

All this longwinded shyte is by way of saying:
Pushing debt into the future is a good move if everybody sticks to the plan.
If we allow ourselves to drift back into our same old slovenly ways, nothing will save us.
In the meantime - by all means - let's blame everyone but ourselves.

space_man

K-9 wrote: »

Whatever about the others I can't see how anybody could call our austerity a failure, we've got about €50 Billion over the last few budgets to help us cut the deficit. The next problem will be interest costs on debt and while the deal will help in that regard, it's going to be the big problem for the next few years.

yes i'm sure the 430k unemployed people might not agree. not to mention all the businesses that have folded, or the patients on hospital trolleys, or the 10s 0f 1,000s forced to emigrate, or those kids in overcrowded schools.
yes it's been a resounding success.

Duggys Housemate

space_man wrote: »

yes i'm sure the 430k unemployed people might not agree. not to mention all the businesses that have folded, or the patients on hospital trolleys, or the 10s 0f 1,000s forced to emigrate, or those kids in overcrowded schools.
yes it's been a resounding success.

You've changed the definition of success.

As a point of fact the austerity did not cause most of that unemployment, it was caused by the collapse of the boom. Unless we borrowed enough money to allow construction to continue at its boom pace that unemoyment was inevitable, and with it an increase in the deficit.

space_man

Duggys Housemate wrote: »

You've changed the definition of success.

As a point of fact the austerity did not cause most of that unemployment, it was caused by the collapse of the boom. Unless we borrowed enough money to allow construction to continue at its boom pace that unemoyment was inevitable, and with it an increase in the deficit.

of course we could not "allow" construction activity to continue at its' boom levels. that would be crazy. we would eventually end up with a ghost estate for every person in the country. how could you propose such a ludricrous situation?
no sound economic progress needs to be based on much more sustainable principles than building houses and selling them to each other.

Duggys Housemate

space_man wrote: »

of course we could not "allow" construction activity to continue at its' boom levels. that would be crazy. we would eventually end up with a ghost estate for every person in the country. how could you propose such a ludricrous situation?
no sound economic progress needs to be based on much more sustainable principles than building houses and selling them to each other.

I didn't propose it. I was arguing against your blaming the present government and the austerity for the 430k unemployed.

Scofflaw

space_man wrote: »

of course we could not "allow" construction activity to continue at its' boom levels. that would be crazy. we would eventually end up with a ghost estate for every person in the country. how could you propose such a ludricrous situation?
no sound economic progress needs to be based on much more sustainable principles than building houses and selling them to each other.

I think you'll find that was Duggy's Housemate's point.

cordially,
Scofflaw

Curly Judge

space_man wrote: »

of course we could not "allow" construction activity to continue at its' boom levels. that would be crazy. we would eventually end up with a ghost estate for every person in the country. how could you propose such a ludricrous situation?
no sound economic progress needs to be based on much more sustainable principles than building houses and selling them to each other.

Nice body swerve there space man!
You attack Duggy for proposing something he didn't propose and dodge answering the question yourself.
Just to remind you: how do you propose to employ all the block layers, plasterers and carpenters affected by the building collapse?

space_man

Duggys Housemate wrote: »

I didn't propose it. I was arguing against your blaming the present government and the austerity for the 430k unemployed.

where did i blame the Govt for 430k unemployment?

space_man

Curly Judge wrote: »

Nice body swerve there space man!
You attack Duggy for proposing something he didn't propose and dodge answering the question yourself.
Just to remind you: how do you propose to employ all the block layers, plasterers and carpenters affected by the building collapse?

i don't honestly know if there is anything we can do to employ ALL the unemployed construction workers, and i do not think that would be desirable in any case. but austerity is certainly not the answer.

space_man

space_man wrote: »

where did i blame the Govt for 430k unemployment?

i'm waiting ...........

space_man

Duggys Housemate wrote: »

I didn't propose it. I was arguing against your blaming the present government and the austerity for the 430k unemployed.

Duggys Housemate wrote: »

Unless we borrowed enough money to allow construction to continue at its boom pace that unemoyment was inevitable, and with it an increase in the deficit.

i think you'll find you did. you should read what you type!;)

still waiting for a response to your other erroneous point.

Dumdedumdedum ............

kippy

space_man wrote: »

i think you'll find you did. you should read what you type!;)

still waiting for a response to your other erroneous point.

Dumdedumdedum ............

You said austerity was to blame for 430K people on the dole (as well as a few other things)
There were 430K people on the dole before austerity really kicked in.

(and to be honest, anyone who actually thinks what we have gone through in the past 5 years is actually austerity, needs to realise that its a very mild form of it, to say the least)

space_man

kippy wrote: »

You said austerity was to blame for 430K people on the dole (as well as a few other things)

No i did not! please get your facts right before you try to put words in my mouth!

kippy wrote: »

There were 430K people on the dole before austerity really kicked in.

(and to be honest, anyone who actually thinks what we have gone through in the past 5 years is actually austerity, needs to realise that its a very mild form of it, to say the least)

austerity coincided and exacerbated the unemployment crisis. even the IMF now realize that austerity has not worked, and has done more damage than even they anticipated.

ezra_pound

space_man wrote: »

No i did not! please get your facts right before you try to put words in my mouth!



austerity coincided and exacerbated the unemployment crisis. even the IMF now realize that austerity has not worked, and has done more damage than even they anticipated.

Space Man you did say it. Its a forum so we can all read back over what you said.

Look the imf have called for as much support as possible from Europe for Ireland. The imf want Ireland to cut its deficit which means austerity and they'll stop paying us their money if we stop austerity.

Of course austerity is bad and hard fire an economy but its a necessary evil.

Is's a necessary part of the route to recovery and employment.

kippy

space_man wrote: »

No i did not! please get your facts right before you try to put words in my mouth!



austerity coincided and exacerbated the unemployment crisis. even the IMF now realize that austerity has not worked, and has done more damage than even they anticipated.

Okay,
so your point was the 430 K people on the dole wouldn't agree that the austerity policies are working. Is that it?
Point 1.
Austere policies did not put these people on the dole, I assume the point you are making is austere policies have not got them back into the labour market? Throughout this "crisis" however, jobs have been created, but perhaps not in fields that suit the majority of these people. What exactly are the State to do about this unless, as suggested in another post, they re inflate a property bubble (which at this point, as well as being daft, is impossible)

Point 2.
A country simply cannot run a fiscal deficit of between 14 and 20 billion on an annual basis without some sort of adjustment (this deficit is essentially without the impact of the debts we have taken on as a result of the banks)

Point 3. To deal with point 2, in the short term at least, some level of austerity is required.

Point 4. Outside of defaulting on debts (which by the way, aren't all to big bad bankers in their ivory towers, the majority of debt defaults will in some way effect the guy on the ground as well) the only other option is to print more money, and that has it's major faults.


The deal reached this past week is by no means ideal, if anything it increases the chances of major issues down the road, however it does give us more leeway in the short to medium term to get our house in order. This is critical.

K-9

space_man wrote: »

yes i'm sure the 430k unemployed people might not agree. not to mention all the businesses that have folded, or the patients on hospital trolleys, or the 10s 0f 1,000s forced to emigrate, or those kids in overcrowded schools.
yes it's been a resounding success.

I'd say if smarter people than me did an analysis of unemployment figures they'd see at least 50% of those figures are due to the collapse of Construction, the car industry and other luxury goods like that.

If you went through my posts from a few years ago, I thought no tax on the minimum wage was an achievement, while also bemoaning the race to the bottom with political parties auctioning tax policies, Labour and SF included.

This country needs high taxes for its spending, unfortunately we introduced them to plug holes in Government finances. That doesn't mean increasing taxes is wrong, we cut them too much and bet on the public buying houses and 4*4's.

space_man

ezra_pound wrote: »

Space Man you did say it. Its a forum so we can all read back over what you said.

ok show me where i said austerity caused 430k unemployment then. i've been waiting all evening for Duggy'sHousemate to do so.:D

ezra_pound wrote: »

Of course austerity is bad and hard fire an economy but its a necessary evil.

Is's a necessary part of the route to recovery and employment.

Nonsense. It's not working. It's making a bad situation worse. Spain and Italy will be next. All that fiscal consolidation is making their deficit situation worse not better. Unlike us Paddies they wont so readily hop on a plane to Aussie.

NAP123

Duggys Housemate wrote: »

None of the pessimists on this thread understand the basics of simple economics. Or compound maths.

But let's get one thing clear. If inflation is assumed (low balling) to be 2% over the next 35 years the debt burden on this note is reduced by 50%.

It's a burning of the bond holders.

No its not.

The bondholders have been paid in full.

Anglo and INBS were private banks with private bondholders and deposit holders.

All Irish deposit holders and Irish non deposit holders have been screwed.

All bondholders have been repaid and none have been screwed.

Parri Passu, me hole.

Anybody that thinks this was a good deal for Irish people is a fool.

The Prommissory note was most likely illegal and should have been challenged in the courts, before any negotiations took place.

If a legal challenge failed, it should have been defaulted on, for purely moral grounds.

The international bond markets had already decided that it was a debt that could and should be defaulted on.

Not defaulting on it, was a mistake.

The world is crying out for someone to make a stand against the criminal banking system, including the Central Bankers.

It should have been us.

space_man

space_man wrote: »

ok show me where i said austerity caused 430k unemployment then. i've been waiting all evening for Duggy'sHousemate to do so.

still waiting ....:rolleyes:

space_man

NAP123 wrote: »

No its not.

The bondholders have been paid in full.

Anglo and INBS were private banks with private bondholders and deposit holders.

All Irish deposit holders and Irish non deposit holders have been screwed.

All bondholders have been repaid and none have been screwed.

Parri Passu, me hole.

Anybody that thinks this was a good deal for Irish people is a fool.

The Prommissory note was most likely illegal and should have been challenged in the courts, before any negotiations took place.

If a legal challenge failed, it should have been defaulted on, for purely moral grounds.

The international bond markets had already decided that it was a debt that could and should be defaulted on.

Not defaulting on it, was a mistake.

The world is crying out for someone to make a stand against the criminal banking system, including the Central Bankers.

It should have been us.

we've effectively long-fingered a debt that NEVER was ours to start with. I agree it was/is PRIVATE DEBT. and now we being told it's a great deal because inflation and/or growth will help reduce much of it, but that is immaterial as it is NOT our debt.
the Govt. have been given breathing room, and have been let off the hook somewhat, but a political solution, which helps political parties is not what this country needs.

kippy

space_man wrote: »

we've effectively long-fingered a debt that NEVER was ours to start with. I agree it was/is PRIVATE DEBT. and now we being told it's a great deal because inflation and/or growth will help reduce much of it, but that is immaterial as it is NOT our debt.
the Govt. have been given breathing room, and have been let off the hook somewhat, but a political solution, which helps political parties is not what this country needs.

This has been government debt since the day it was "manufactured" for Anglo.
This week has been about trying to reduce the impact of it.....

Even WITHOUT this 30 billion (ie if were we to have written it off from day 1 (which had its own major implications) the state was running a 15 odd billion deficit from circa 2008, what would one do about this (without going down the austere policies route)

NAP123

space_man wrote: »

we've effectively long-fingered a debt that NEVER was ours to start with. I agree it was/is PRIVATE DEBT. and now we being told it's a great deal because inflation and/or growth will help reduce much of it, but that is immaterial as it is NOT our debt.
the Govt. have been given breathing room, and have been let off the hook somewhat, but a political solution, which helps political parties is not what this country needs.

Those that say we can inflate our way out of this debt, seem to forget the ECB is constitutionally obliged to insure no or very little inflation.

I love how Noonan used an example of buying his home for 3k in 1972 and being able to earn 3k a month in 1992, as an example of how this debt would be inflated away.

The ECB did not exist in 1972 or 1992. I wonder has anybody done an equivilent comparison in Germany from 1992 to 2013.

Or has anybody even considered the ridiculousness of Noonans argument about stretching out the mortgage on your home and therfore reducing your mortgage repayments?

Irelands situation is more like approaching your bank manager with a suggestion to reduce your mortgage repayments and coming away with the added payment of the bank managers mortgage repayments.

Noonan needs to think before he speaks. He has an awfully inflated opinion of his own capabilities.

space_man

NAP123 wrote: »

Those that say we can inflate our way out of this debt, seem to forget the ECB is constitutionally obliged to insure no or very little inflation.

I love how Noonan used an example of buying his home for 3k in 1972 and being able to earn 3k a month in 1992, as an example of how this debt would be inflated away.

The ECB did not exist in 1972 or 1992. I wonder has anybody done an equivilent comparison in Germany from 1992 to 2013.

Or has anybody even considered the ridiculousness of Noonans argument about stretching out the mortgage on your home and therfore reducing your mortgage repayments?

Irelands situation is more like approaching your bank manager with a suggestion to reduce your mortgage repayments and coming away with the added payment of the bank managers mortgage repayments.

Noonan needs to think before he speaks. He has an awfully inflated opinion of his own capabilities.

Noonan et al needed a "victory" any kind of "victory" to sell to the electorate, his backbenchers etc. this is it.
long finger debt that's not even yours in the forlorn hope inflation (and i agree the ECB/German Central Bank are steadfast against inflation).
Paddy has taken 1 up the joxter for the European banking system, and our reward is to burden our grandchildren with debt.:eek:

AlmightyCushion

The ECB's target for inflation is to keep it below but close to 2%. Over the past 10 years it's been higher than that most of the time. The interest on this new deal is effectively about 1%, so anything above that means that inflation is eating into the real value of the debt.

http://www.global-rates.com/economic-indicators/inflation/consumer-prices/hicp/eurozone.aspx

NAP123

AlmightyCushion wrote: »

The ECB's target for inflation is to keep it below but close to 2%. Over the past 10 years it's been higher than that most of the time. The interest on this new deal is effectively about 1%, so anything above that means that inflation is eating into the real value of the debt.

http://www.global-rates.com/economic-indicators/inflation/consumer-prices/hicp/eurozone.aspx[/QUOTE]

Whos debt?

AlmightyCushion

NAP123 wrote: »

Whos debt?

The one that is the topic of the thread. What else did you think I was talking about?

space_man

AlmightyCushion wrote: »

The one that is the topic of the thread. What else did you think I was talking about?

that's NOT our debt.
do you normally pay your neighbour's credit card bill?

NAP123

AlmightyCushion wrote: »

The one that is the topic of the thread. What else did you think I was talking about?

And you still think that it it is yours?

If you do, I have millions more that us mortgage holders are only more than willing to give you.

You see, we are feeling a bit left out of this debt forgiveness bonanza.

We don,t see why we should forgive the debt of banks and not have our own debt forgiven.

space_man

NAP123 wrote: »

And you still think that it it is yours?

If you do, I have millions more that us mortgage holders are only more than willing to give you.

You see, we are feeling a bit left out of this debt forgiveness bonanza.

We don,t see why we should forgive the debt of banks and not have our own debt forgiven.

i am totally debt free TG, but i agree.
Capitalism reigns when profits are big, but it's time for Socialism when they go bust.

As a kid my older brother used to try that one on me,

"Heads I win, Tails you lose"

AlmightyCushion

NAP123 wrote: »

And you still think that it it is yours?

If you do, I have millions more that us mortgage holders are only more than willing to give you.

You see, we are feeling a bit left out of this debt forgiveness bonanza.

We don,t see why we should forgive the debt of banks and not have our own debt forgiven.

You were implying that inflation won't reduce the debt because the ECB has targets for inflation. I was just pointing out that even with the ECB hitting it's targets on inflation, inflation will still reduce the real value of the debt.

space_man

AlmightyCushion wrote: »

You were implying that inflation won't reduce the debt because the ECB has targets for inflation. I was just pointing out that even with the ECB hitting it's targets on inflation, inflation will still reduce the real value of the debt.

still not our debt.

NAP123

space_man wrote: »

i am totally debt free TG, but i agree.
Capitalism reigns when profits are big, but it's time for Socialism when they go bust.

As a kid my older brother used to try that one on me,

"Heads I win, Tails you lose"

As a taxpayer, mortgage holder, self employed, irishman, lucky enough to be able to pay my bills, I have no problem paying an extra few bob to make sure those not as fortunate are able to live in their country.

I have a major problem with paying international bondholders and no I don,t care if they belong to Irish pension funds.

I would have thought of my self as a capitalist, but not anymore.

Like all ideals, it has been hijacked by greedy bastards.

space_man

NAP123 wrote: »

As a taxpayer, mortgage holder, self employed, irishman, lucky enough to be able to pay my bills, I have no problem paying an extra few bob to make sure those not as fortunate are able to live in their country.

I have a major problem with paying international bondholders and no I don,t care if they belong to Irish pension funds.

I would have thought of my self as a capitalist, but not anymore.

Like all ideals, it has been hijacked by greedy bastards.

what we now have is a perversion of Capitalism, (just as in the dark days before the collapse of the Soviet system there was a perversion of Socialism).
we have rewarded these guys for failure. i thought the incentive system was supposed to punish failure, not reward it?

"heads i win, tails you lose"

Curly Judge

space_man wrote: »

Noonan et al needed a "victory" any kind of "victory" to sell to the electorate, his backbenchers etc. this is it.
long finger debt that's not even yours in the forlorn hope inflation (and i agree the ECB/German Central Bank are steadfast against inflation).
Paddy has taken 1 up the joxter for the European banking system, and our reward is to burden our grandchildren with debt.:eek:

Okay Pistol Pete!
You and your cohorts are wonderful gun slinging hombres but you know you are never going to be called out on the street at noon to find the sun in your face.
You are far more likely to stay in the saloon, propping up the bar and pontificating about the government needing to "grow a pair" or some such nonsense. The amount of dick measuring that goes on on these sites in truly amazing!
You are prepared to play Russian roulette with the future of the people of this country on a bet that Paddy Power wouldn't even give you odds on.

Okay, let us pretend that the government were foolish enough to heed your advice.
Let's say they were foolish enough to threaten default on the bank debt and the promissory note contract.
Let us also say that the Germans, Finns, Austrians and Dutch [who also have balls, last time I looked] said, "Go take a hike. But before you do give us back all the money we have lent you to date and don't come looking for another penny from us.
While we were in a flat spin worrying about how we were ever going to get another consignment of oil into the country, word would also feed through that Google, Intel
and half a dozen pharmaceutical companies were jumping stone walls at the airports in an effort to get out of "Dodge" city as fast as their jets could carry them.
Dev's economic war [where incidentally another international treaty was welshed on] would look like a bacchanalian feast compared with the misery your ideas would give birth to.
Or perhaps I've got you and your fellow warriors all wrong and that you really do have a gunboat tucked away somewhere, ready to sail up the Spree and threaten Berlin into submission?

K-9

NAP123 wrote: »

No its not.

The bondholders have been paid in full.

Anglo and INBS were private banks with private bondholders and deposit holders.

All Irish deposit holders and Irish non deposit holders have been screwed.

All bondholders have been repaid and none have been screwed.

WOW, I've seen some wildly based assumptions and totally incorrect posts in my time on Boards, this is top grade stuff.

KyussBishop

K-9 wrote: »

Whatever about the others I can't see how anybody could call our austerity a failure, we've got about €50 Billion over the last few budgets to help us cut the deficit. The next problem will be interest costs on debt and while the deal will help in that regard, it's going to be the big problem for the next few years.

Well, on measures of social and economic harm, austerity definitely is quite a huge failure; we're still taking damage, because every year that unemployment remains so high, and the economic slowdown persists, that's more of peoples futures, health and lifes in general harmed (leading both directly and indirectly, to greater deaths for people too), and more businesses that are bled dry and have to shut down.

The austerity narrative has people focusing on a very narrow view of economics, such as the size of the deficit, and uses that as a measure of wellbeing of the country; the real measures are the effects on people and business, because there is enormous harm going on that is compounded every day (so every day that passes, the damage we take increases).

Even in the deficit-reduction narrative austerity focuses on, it is a failure there too, because when you cut spending to reduce the deficit, you reduce the amount of money/jobs/consumer-spending in the wider economy, which reduces tax intake for government, and worsens the deficit; so it accelerates the destruction of the economy, supposedly in order to 'save' it.


When you compare the economic policies being engaged in now, to the economic policies the EU could be engaging in (such as centralized debt, a centralized investment fund, and even outright monetary financing within inflation targets), you see that we could be fully funding our government with EU help, without adding to our national debt, and we could close the deficit without any cuts.

We could also provide full employment again in a very short space of time, and resolve both the public and private debt problems; with the right policies, resolving the crisis isn't actually hard, and no member states 'lose out' either in the process, as we all get the benefits of a restored economy.


When you compare that, what could be done, to the austerity policies, then the way we're going now (and have been for the past 5 years) looks pretty insane (equally so with the US and many other countries).

djpbarry

KyussBishop wrote: »

Even in the deficit-reduction narrative austerity focuses on, it is a failure there too, because when you cut spending to reduce the deficit, you reduce the amount of money/jobs/consumer-spending in the wider economy, which reduces tax intake for government, and worsens the deficit...

Tax revenue increase by over €2.5 billion in 2012?

space_man

the problem with austerity is a bit like communism.
it sounds like a nice idea, but it dont work.

austerity cripples growth, which in turn suppress revenues so it's self-defeating. the fact that we have no control over our interest rates will only compound the problem. the adverse effects of austerity will be felt for years after it's ditched.

djpbarry

space_man wrote: »

austerity cripples growth, which in turn suppress revenues so it's self-defeating.

But it's not suppressing revenues?

space_man

djpbarry wrote: »

But it's not suppressing revenues?

not yet. of course any Govt can be seen to increase revenues in the short term if they tax people out of existence, but there will come a point when the well runs dry.
we're already reaching this point, with the collapse of the retail sector, the growth of the black economy, and 14% unemployment and mass emigration, the arrival of soup kitchens.

the words blood and stone comes to mind.

antoobrien

space_man wrote: »

the problem with austerity is a bit like communism.
it sounds like a nice idea, but it dont work.

austerity cripples growth, which in turn suppress revenues so it's self-defeating. the fact that we have no control over our interest rates will only compound the problem. the adverse effects of austerity will be felt for years after it's ditched.

Austerity doesn't work? Tell that to Canada, whose austerity practices in the early 90s has them now as one of the richest, well financed and well regulated countries in the world.

What people want is a quick fix - which is not possible, so they blame it on austerity - which will actually work.

Austerity is working in the hospitals in the west - they are treating more people and drastically cutting waiting lists - with less money & staff.

djpbarry

space_man wrote: »

not yet. of course any Govt can be seen to increase revenues in the short term if they tax people out of existence, but there will come a point when the well runs dry.
we're already reaching this point...

Ignoring for a moment that taxation in Ireland could not possibly be considered high by European standards, it has been stated that further efforts to close the budget deficit will focus on spending cuts rather than tax increases.

space_man wrote: »

...with the collapse of the retail sector, the growth of the black economy, and 14% unemployment and mass emigration, the arrival of soup kitchens.

This is all as a result of "austerity"?

space_man

djpbarry wrote: »

Ignoring for a moment that taxation in Ireland could not possibly be considered high by European standards, it has been stated that further efforts to close the budget deficit will focus on spending cuts rather than tax increases.

what taxation is this? certainly taxation of MNCs is very low, but personal taxation is not.
and if you consider all the other myriad of charges we are subjected to .....

djpbarry wrote: »

This is all as a result of "austerity"?

no it's not ALL the result of austerity.
do you think austerity has helped these downward or upward pressures?