Austerity isn't really working is it?

bgrizzley

Anynama141 wrote: »

I think your suggestion that we adopt eugenics is a poor one.

strawman much?

while we are at it i think your suggestion that we follow Swedens lead in everything is also poor

KyussBishop

Three Seasons wrote: »

The problem is Europe will be worse off after all these projects are finished. The cost including interest will likely be far more detrimental than the benefit of these "projects".

That is false; the EU's total public debt vs GDP allows for many trillions in spending while maintaining sustainability, and Eurobonds would make this even more sustainable due to the lower interest paid on them.

Phoebas

bgrizzley wrote: »

strawman much?

while we are at it i think your suggestion that we follow Swedens lead in everything is also poor

Aw c'mon - you introduced eugenics into this. You're not seriously complaining about someone else building straw men!!!

jank

KyussBishop wrote: »

I actually agree that Germany is not likely to agree to it; it doesn't change the fact that it is an alternative to austerity, with only a political impediment, when people pretend it's some incontrovertible law of economics.

Well if that is the case why don't we nationalise the German car industry to bail out the Irish tax payer? The only thing in our way is a political impediment! :P

Anynama141

KyussBishop wrote: »

That is false; the EU's total public debt vs GDP allows for many trillions in spending while maintaining sustainability, and Eurobonds would make this even more sustainable due to the lower interest paid on them.

Right, but you might want to address these points:

Anynama141 wrote: »

A few problems with this:

1. There is NO UNITED STATES OF EUROPE
2. There is no political will to form a united states of Europe
3. I don't think Irish people would be happy with their taxes paying for roads in Croatia. I don't think German people would be happy with their taxes paying for projects in Ireland.

Do you disagree with any of these points? (by the way, I'm glad that I finally seem to understand your proposal)

bgrizzley

Phoebas wrote: »

Aw c'mon - you introduced eugenics into this. You're not seriously complaining about someone else building straw men!!!

i didnt, i asked a question. why do you guys get to be the only ones who can introduce daft ideas?

Anynama141

bgrizzley wrote: »

i didnt, i asked a question. why do you guys get to be the only ones who can introduce daft ideas?

I'm not sure what you mean by 'you guys'.

We have two broad schools of thought on this thread:

1. People who think that austerity is not a matter of choice for Ireland.
2. People who think there is an alternative.

I belong to group 1. The people in group 1 have asked the posters in group 2 to outline the alternatives. So far, nobody has come up with an alternative at all at an Irish level. Kysussbishop, to his credit, has proposed a European-level alternative, but even he concedes that it isn't politically feasible.

Does that just about sum up the thread?

pH

KyussBishop wrote: »

That is false; the EU's total public debt vs GDP allows for many trillions in spending while maintaining sustainability, and Eurobonds would make this even more sustainable due to the lower interest paid on them.

So your "solution" to all this is to keep piling 15 billion a year onto our 120 billion national debt but - because it's financed by Eurobonds it's all OK?

The point is that people with money don't think that Ireland could ever pay that debt off - and while Eurobonds may give us access to cheaper money they certainly couldn't be carte blanche for reckless spending of any country in Europe knowing that other countries would have to carry the can for their default - Euro bonds would come with the same spending/debt limits as we're currently striving for - and belief they wouldn't is pure wishful thinking.

KyussBishop

pH wrote: »

So your "solution" to all this is to keep piling 15 billion a year onto our 120 billion national debt but - because it's financed by Eurobonds it's all OK?

The point is that people with money don't think that Ireland could ever pay that debt off - and while Eurobonds may give us access to cheaper money they certainly couldn't be carte blanche for reckless spending of any country in Europe knowing that other countries would have to carry the can for their default - Euro bonds would come with the same spending/debt limits as we're currently striving for - and belief they wouldn't is pure wishful thinking.

Christ...it is not put on our national debt, they are EU-wide bonds.

After multiple pages of this being pointed out, probably more than a dozen times by now, you have to be willfully ignoring this.

jank

KyussBishop wrote: »

Eurobonds are not held by any countries; the EU in its entirely, would have to default on them.

Countries do not owe Eurobonds, the entire EU does; it's like treating the EU as a single country, with Eurobonds being the EU's national debt.

It's exactly like the US federal government taking on debt, and investing it in individual states; the states don't themselves pay that back, the US as a whole does.

EDIT: And no; no Irish money goes to paying Greek investment programs, the money is sourced from the private markets that invest in the bonds, and the EU as a whole pays off the stock of bonds over time (which will represent liabilities for investments all over the EU).

So in other words your solution is a fully fledged federal EU? I really don't think you know how bonds work. If the bonds are owned by the Eu as a whole then where does the money come from? The member states which includes Ireland. So yes, Irish money would in fact be used to prop up a dysfunctional Greece. Never mind the fact that the likes of Germany in exchange for Eurobonds will dictate all Irish budgets in the future. Yes, it's a solution but one where very few Irish people would tolerate. There is NO silver bullet with Eurobonds that won't come at a price nor us there free money out there to cut a deficit.

KyussBishop

Anynama141 wrote: »

Right, but you might want to address these points:

Not really because they are a repetition of the same points I already addressed, that countries do not fund other countries investments, it comes from the markets and the liabilities are collectively repaid by the entire EU, and that the entire point is not to argue that this will happen (I know Germany will never agree to it), but debunking the idea that austerity is an immutable economic fact, as if mandated by theory, when it is a political choice only.

Anynama141

pH wrote: »

So your "solution" to all this is to keep piling 15 billion a year onto our 120 billion national debt but - because it's financed by Eurobonds it's all OK?

pH - in Kyussbishop's scheme, the spending that we and the other PIIGS do is paid for out of an EU budget, which is taxed from all EU countries.

KyussBishop

jank wrote: »

So in other words your solution is a fully fledged federal EU? I really don't think you know how bonds work. If the bonds are owned by the Eu as a whole then where does the money come from? The member states which includes Ireland. So yes, Irish money would in fact be used to prop up a dysfunctional Greece. Never mind the fact that the likes of Germany in exchange for Eurobonds will dictate all Irish budgets in the future. Yes, it's a solution but one where very few Irish people would tolerate. There is NO silver bullet with Eurobonds that won't come at a price nor us there free money out there to cut a deficit.

As I have said, the money comes from the markets and is repaid by the entire EU.

Irish money does not prop up Greece, it repays the bonds over many years, with investors money being taken in and doled out all over the EU, not specifically in Greece.

It is really simple to understand, that no money is transferring from one country to another, it is a liability shared by the entire EU, with every country in the EU getting funds.

Anynama141

KyussBishop wrote: »

Not really because they are a repetition of the same points I already addressed, that countries do not fund other countries investments, it comes from the markets and the liabilities are collectively repaid by the entire EU, and that the entire point is not to argue that this will happen (I know Germany will never agree to it), but debunking the idea that austerity is an immutable economic fact, as if mandated by theory, when it is a political choice only.

Ok, but isn't it a political choice along the lines of not turning over the West of Ireland to become a giant holiday camp for Germany, or not turning Sicily into a homeland for the Roma people?

As in something that is virtually impossible to imagine anyone agreeing to?

Anynama141

KyussBishop wrote: »

As I have said, the money comes from the markets and is repaid by the entire EU.

Irish money does not prop up Greece, it repays the bonds over many years, with investors money being taken in and doled out all over the EU, not specifically in Greece.

It is really simple to understand, that no money is transferring from one country to another, it is a liability shared by the entire EU, with every country in the EU getting funds.

Even if this were possible (and you agree that it is politically impossible) who decides who gets how much money? What proportion of these Eurobonds goes to each country?

We need enough to employ 200,000 people, so, scaling up for Germany, do they get enough to employ 8,000,000 people? And employ them for how long?

Just trying to get a handle on rough numbers here.

KyussBishop

It was a part of the original plans for the Euro, so it was on the books even before the Euro come about, but was never implemented; it is impossible to have a stable monetary union without something like this, because it leads to a deadlock when economic crisis arrives, like now.

We already lost our sovereignty when we gave away control over our currency to the EU, this isn't like selling off a strip of land to other countries; what is happening now, is the current deadlock is forcing us to sell off and strip public assets to investors instead.

KyussBishop

Anynama141 wrote: »

Even if this were possible (and you agree that it is politically impossible) who decides who gets how much money? What proportion of these Eurobonds goes to each country?

We need enough to employ 200,000 people, so, scaling up for Germany, do they get enough to employ 8,000,000 people? And employ them for how long?

Just trying to get a handle on rough numbers here.

The European Investment Fund takes the funds generated from Eurobonds, and uses them to approve infrastructure (and other worthy) projects all around the EU, and this would largely be doled out based upon the amount of money generated by the bonds, and the need for employment in EU countries (and the need for infrastructure, relative to employment).

It would be aiming to reach towards full employment, but (minus additional policies, like help from the ECB) might not reach that far, but would at least get a significant way towards providing stimulus for recovery.

KyussBishop

Yanis Varoufakis has it all written down in his Modest Proposal document, though it is not all an accessible read.

jank

KyussBishop wrote: »

As I have said, the money comes from the markets and is repaid by the entire EU.

Irish money does not prop up Greece, it repays the bonds over many years, with investors money being taken in and doled out all over the EU, not specifically in Greece.

It is really simple to understand, that no money is transferring from one country to another, it is a liability shared by the entire EU, with every country in the EU getting funds.

I have no idea what you are talking about. Either the bonds are EU wide or not. You can't have Eurobonds and then state that only Irish money will go to pay back the Irish bits of the Eurobonds. It doesn't work like that not even in the US. The liability would be shored up by Germany as they would have to pay a higher yield than normal. It's like you are trying to square a hole. Add a bit of this, sprinkle a little of that, simple! Eurobonds, that are not actually Eurobonds!!

JimiTime

Anynama141 wrote: »

Jimi, I don't think the salaries are waaaay out of whack - they are a bit too high, but halving them would be too much. Otherwise it will be very hard to get competent people to do the job.

What I have a problem with is their massive pensions that they can start collecting long before retirement age. They should certainly be cut to ribbons.

Like has already been said, money does not, especially in politics, equal competency. The bigger issue I have though, is that the rhetoric is that the country is broke, financially screwed etc etc. Its not that I don't believe the rhetoric, as I most certainly do, but they have no standing morally, when they still pick up salaries like that in a country that is broke. If they actually cared about the country, they would dramatically cut their salaries if even just to send out the message as to how bad it truly is (Most of their spend goes on expenses anyway). Even with the caveat that when they restore the country to a certain point, they can then look to raise it to a reasonable, sustainable level again etc. Before we look at who should be cut where, we should be demanding this of our politicians.

Three Seasons

KyussBishop wrote: »

Christ...it is not put on our national debt, they are EU-wide bonds.

After multiple pages of this being pointed out, probably more than a dozen times by now, you have to be willfully ignoring this.

Are you saying the Irish government won't be required to pay back any of the issued bonds or have to contribute anything at all to repay the debts incurred by the issuance of Eurobonds?

KyussBishop

No, I have made clear the entire EU pays them back, not any one country, and not any one country receives funding from them either, but all.

Three Seasons

KyussBishop wrote: »

No, I have made clear the entire EU pays them back, not any one country, and not any one country receives funding from them either, but all.

So then Ireland will be incurring more and more debt. That's the last thing we need.

KyussBishop

Three Seasons wrote: »

So then Ireland will be incurring more and more debt. That's the last thing we need.

Sigh...no one country pay back the bonds, all EU countries do, Ireland does not incur more debt, the EU does, and Ireland benefits from funding created by the bonds, which drives job creation and an increase in tax revenue.

Debt conversion of national debt up to EU debt is even possible (still paid back by the original country mind, though with the option of sharing if negotiated), which straight away allows a reduction in interest paid on our debts as well.

Three Seasons

KyussBishop wrote: »

Sigh...no one country pay back the bonds, all EU countries do, Ireland does not incur more debt, the EU does, and Ireland benefits from funding created by the bonds, which drives job creation and an increase in tax revenue.

Debt conversion of national debt up to EU debt is even possible (still paid back by the original country mind, though with the option of sharing if negotiated), which straight away allows a reduction in interest paid on our debts as well.

Surely every country must contribute to pay off the bonds, therefore Ireland incurs more debt. Ie they have a future obligation to pay back a percentage of the total Eurobonds debt.

KyussBishop

It's an EU debt, not an Irish debt, and we would be obligated to pay back a portion of it as it is negotiated in EU budgets, like all other member states would be.

What matters then, is the public debt vs GDP ratio of the entire EU, not of Ireland; the EU-wide public debt vs GDP allows trillions in EU-wide funding, while remaining sustainable; the debt load from that doesn't have to be offloaded onto Ireland, making our situation unsustainable (the point of the whole Eurobond and investment program, would be to specifically avoid that), and upgrading our national debt to EU-wide debt (a separate policy, where we still pay that money off, unless negotiated otherwise with the EU), straight away makes our own debts more sustainable through reduced interest rates.

Phoebas

Three Seasons wrote: »

Surely every country must contribute to pay off the bonds, therefore Ireland incurs more debt. Ie they have a future obligation to pay back a percentage of the total Eurobonds debt.

But it would go into a different coloured ledger and stored on a high shelf, so it doesn't count.

KyussBishop

Phoebas wrote: »

But it would go into a different coloured ledger and stored on a high shelf, so it doesn't count.

You do understand this is talking about the entire EU, and that it is about the sustainability of such debt for the entire EU that matters?

It would be like the US as a whole saying "we can't take on more debt, because Wyoming can't afford it".

Three Seasons

KyussBishop wrote: »

You do understand this is talking about the entire EU, and that it is about the sustainability of such debt for the entire EU that matters?

It would be like the US as a whole saying "we can't take on more debt, because Wyoming can't afford it".

Why would countries with a top credit rating choose to take part in this an pay higher interest? And what about countries which don't want "projects".

Phoebas

KyussBishop wrote: »

You do understand this is talking about the entire EU, and that it is about the sustainability of such debt for the entire EU that matters?

It would be like the US as a whole saying "we can't take on more debt, because Wyoming can't afford it".

There is about as much political will in the EU right now to issue bonds to fund projects in Wyoming as there is to issue bonds to fund projects in the PIIGS