Austerity isn't really working is it?

KyussBishop

Three Seasons wrote: »

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".

Credit ratings have nothing to do with it; if anything, the entire EU achieving economic recovery boosts the credit rating of all involved.

KyussBishop

Phoebas wrote: »

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

Agreed, as said earlier I don't think it will happen in the EU due to Germany and such, being dead-set against it; again though, it puts the lie to the argument that austerity is an immutable necessity due to economic theory, when there are these alternatives available with only political obstacles, not economic or theoretic obstacles.

jackal

Austerity in Ireland... I have not seen much of it. I have seen a lot of rubbish talked about it in the media, though, leading to a me too mentality amongst the general population. For instance, the Irish Independent spellchecker dislikes the word "homeowner". It instead seems to replace it with "hard-pressed homeowner".

You would swear we were all eating stone soup with a side of twigs.

Check the queues in starbucks - out the door, always.
Check the amount of Audi's BMW's and Merc's wafting gracefully around our streets.
Check the queues of people at property viewings in Dublin.
Try and get a seat in a restaurant Thursday, Friday or Saturday.
Try and get parking in a shopping centre on the weekend.

I think the people of Ireland have managed to somehow confuse "Austerity" with not having 2 foreign holidays a year and a shopping trip to NY for the sales.

Anynama141

KyussBishop wrote: »

Credit ratings have nothing to do with it; if anything, the entire EU achieving economic recovery boosts the credit rating of all involved.

Credit ratings have everything to do with it. Why would Ireland borrow using Eurobonds if it cost more? Or why would they not if it cost less?

Anynama141

KyussBishop wrote: »

Agreed, as said earlier I don't think it will happen in the EU due to Germany and such, being dead-set against it; again though, it puts the lie to the argument that austerity is an immutable necessity due to economic theory, when there are these alternatives available with only political obstacles, not economic or theoretic obstacles.

It's not just Germany who would be against it - even countries in receipt of this apparently free money might have serious questions to ask as to the implications for their own sovereignty.

Bullseye1

jackal wrote: »

Austerity in Ireland... I have not seen much of it. I have seen a lot of rubbish talked about it in the media, though, leading to a me too mentality amongst the general population. For instance, the Irish Independent spellchecker dislikes the word "homeowner". It instead seems to replace it with "hard-pressed homeowner".

You would swear we were all eating stone soup with a side of twigs.

Check the queues in starbucks - out the door, always.
Check the amount of Audi's BMW's and Merc's wafting gracefully around our streets.
Check the queues of people at property viewings in Dublin.
Try and get a seat in a restaurant Thursday, Friday or Saturday.
Try and get parking in a shopping centre on the weekend.

I think the people of Ireland have managed to somehow confuse "Austerity" with not having 2 foreign holidays a year and a shopping trip to NY for the sales.

Dublin much like London in the UK is doing better than the rest of the country.

Three Seasons

KyussBishop wrote: »

Credit ratings have nothing to do with it; if anything, the entire EU achieving economic recovery boosts the credit rating of all involved.

Tell that to the Austrians.

KyussBishop

Anynama141 wrote: »

Credit ratings have everything to do with it. Why would Ireland borrow using Eurobonds if it cost more? Or why would they not if it cost less?

Why on earth would Eurobonds cost more? Practically all information you will find online about Eurobonds, is that they will help reduce interest paid on debts.

This is heading towards a vague and unsubstantiated "the markets won't like it" claim, and again it is ignoring that Ireland would not issue Eurobonds, the EU does.

KyussBishop

Anynama141 wrote: »

It's not just Germany who would be against it - even countries in receipt of this apparently free money might have serious questions to ask as to the implications for their own sovereignty.

Their sovereignty is already gone, because they have no control over their own currency; that is why we are in this situation in the first place, because we don't have the monetary sovereignty to address the problems we are facing (which has greatly curtailed, if not all but eliminated, our fiscal sovereignty too, since a lot of that goes hand-in-hand with monetary sovereignty, particularly during economic crisis).

Anynama141

KyussBishop wrote: »

Why on earth would Eurobonds cost more

Eurobonds will represent cheaper borrowing if you are Ireland, and more expensive if you are Germany.

KyussBishop wrote: »

Practically all information you will find online about Eurobonds, is that they will help reduce interest paid on debts.

...if you are a basket case country, because as I tried to explain to you earlier, Germany and other more highly rated (lower risk) borrowers are on the hook for the debt too.

KyussBishop wrote: »

This is heading towards a vague and unsubstantiated "the markets won't like it" claim, and again it is ignoring that Ireland would not issue Eurobonds, the EU does.

I'm sure the markets would be ok with it - it's the guys who can borrow for less on their own (Germany et al) who won't like it.

Three Seasons

I have a solution.

Let's ask American to give us 100 billion euro or we could ask apple, they have 100 billion sitting in the bank doing nothing.

That's an economic solution, it only has political obstacles.

Anynama141

KyussBishop wrote: »

Their sovereignty is already gone, because they have no control over their own currency

You can have sovereignty while sharing a currency. Ireland shared a currency with the UK for decades, post independence.

Wibbs

jackal wrote: »

Austerity in Ireland... I have not seen much of it.

While I most certainly agree there are the "oh we've not been to Barbados in yonks, we're sooooo austere" gobshítes about, I've also seen many more people really struggling too. It's quite hidden(so far) in my experience. You could have an average, even nice suburban street and number 3 are doing well enough but number 6 are down to checking the back of the sofa for loose change for milk. If you live in number 3 the tendency is to think ah sure it's not that bad*, while if you're living in number 6 the tendency is to think the end is nigh. The truth lays somewhere in the middle.




*One utter gobshíte I know actually asked a mate of mine a few months ago "oh is there much of a recession out there?".

KyussBishop

Anynama141 wrote: »

Eurobonds will represent cheaper borrowing if you are Ireland, and more expensive if you are Germany.

...if you are a basket case country, because as I tried to explain to you earlier, Germany and other more highly rated (lower risk) borrowers are on the hook for the debt too.

I'm sure the markets would be ok with it - it's the guys who can borrow for less on their own (Germany et al) who won't like it.

So what if they have higher interest than Germany; again, the whole EU pays them back, not Germany, so even they benefit from it within the EU, not just from the investment funds, but from the economic recovery of other EU nations too (who they sell their exports to).

Really, people still don't seem to have gotten their head around the concept of the whole EU, as one homogenous political unit, benefiting from and paying back the bonds just like the US when it issues bonds.

Again all that matters is the sustainability for the entire EU, so you need to look at the public debt vs GDP of the whole EU, and that allows many trillions in spending, while still being sustainable.


You keep bouncing around the same 4-5 points, that I have addressed each several times now, without showing how this is supposed to be economically unmanageable in any way.

Note that I don't dispute the political obstacles, I am disputing the claims that austerity is an immutable necessity due to economic theory alone.

pH

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.

This is pure nonsense - are you suggesting that under a eurobond system there's no apportioning of the debt to countries that borrow it? That Ireland's tax payers contribute the same every year to paying off these mythical bonds whether we've borrowed nothing, 1 billion or a trillion using them?

Anyone can see that you're talking rubbish - yes with Eurobonds other countries would pay them off if we defaulted - but the the debt would be ours, and the responsibility of paying it off would be ours.

Sure under some United states of Europe anything might be possible - but for current Eurobonds proposals the money borrowed remains the debt of the nation borrowing, the bond merely gives access to cheaper money and a guarantee that the Germans would have to pay it back when we can't.

KyussBishop

Three Seasons wrote: »

I have a solution.

Let's ask American to give us 100 billion euro or we could ask apple, they have 100 billion sitting in the bank doing nothing.

That's an economic solution, it only has political obstacles.

What on earth do you think bond issuance is for? If you put them out on the market, and the US or Apple decides to invest 100 billion they have lying around, into the bonds, then that is exactly what would happen.

The only difference being, they would be the ones choosing, the EU would just be putting the bonds out on the market, with it being up to private market participants to buy them.

Three Seasons

KyussBishop wrote: »

What on earth do you think bond issuance is for? If you put them out on the market, and the US or Apple decides to invest 100 billion they have lying around, into the bonds, then that is exactly what would happen.

The only difference being, they would be the ones choosing, the EU would just be putting the bonds out on the market, with it being up to private market participants to buy them.

No, let's ask America or apple to give us 100 billion in cash. Sure the obstacles are only political.

You do realise bonds need to be paid back with interest.

jackal

Wibbs wrote: »

While I most certainly agree there are the "oh we've not been to Barbados in yonks, we're sooooo austere" gobshítes about, I've also seen many more people really struggling too. It's quite hidden(so far) in my experience. You could have an average, even nice suburban street and number 3 are doing well enough but number 6 are down to checking the back of the sofa for loose change for milk. If you live in number 3 the tendency is to think ah sure it's not that bad*, while if you're living in number 6 the tendency is to think the end is nigh. The truth lays somewhere in the middle.

I would wonder though if those struggling, would have been struggling regardless of the "Austerity" measures?

Are the extra taxes and charges really to blame for making someone who was not already struggling struggle? I think its overplayed by the media, who choose the worst-case-scenario to illustrate every measure.

Would people not be in trouble largely because of the recession, and austerity measures are the unpleasant cherry on top?

KyussBishop

pH wrote: »

This is pure nonsense - are you suggesting that under a eurobond system there's no apportioning of the debt to countries that borrow it? That Ireland's tax payers contribute the same every year to paying off these mythical bonds whether we've borrowed nothing, 1 billion or a trillion using them?

Anyone can see that you're talking rubbish - yes with Eurobonds other countries would pay them off if we defaulted - but the the debt would be ours, and the responsibility of paying it off would be ours.

Sure under some United states of Europe anything might be possible - but current for current Eurobonds proposals the money borrowed remains the debt of the nation borrowing, the bond merely gives access to cheaper money and a guarantee that the Gemrans would have to pay it back when we can't.

You're still totally stuck thinking about individual countries, when it is about the entire EU; again:
Will the US avoid issuing bonds, because they think Wyoming can't afford it?

It would be idiocy for someone to suggest that, yet that is precisely analogous to what is being said regarding Ireland, Europe and Eurobonds.

Again, you are coming with the idea that individual countries can default on Eurobonds, and I have said this at least a dozen times at this stage, that Eurobonds cover the whole EU, Europe would have to default on the bonds, because individual countries do not hold them.


I've had to repeat that so many times now, to many posters, yet it is incredibly simple stuff.

Anynama141

KyussBishop wrote: »

So what if they have higher interest than Germany; again, the whole EU pays them back, not Germany, so even they benefit from it within the EU, not just from the investment funds, but from the economic recovery of other EU nations too (who they sell their exports to).

Really, people still don't seem to have gotten their head around the concept of the whole EU, as one homogenous political unit, benefiting from and paying back the bonds just like the US when it issues bonds.

Again all that matters is the sustainability for the entire EU, so you need to look at the public debt vs GDP of the whole EU, and that allows many trillions in spending, while still being sustainable.


You keep bouncing around the same 4-5 points, that I have addressed each several times now, without showing how this is supposed to be economically unmanageable in any way.

Note that I don't dispute the political obstacles, I am disputing the claims that austerity is an immutable necessity due to economic theory alone.

Kyuss, what you keep ignoring is that the plan is impossible because a United States of Europe does not exist, and nobody wants to create one.

If we had a golden goose, we could use the eggs to fund economic stimulus - but we don't and there's no point in pretending that is an alternative to austerity either.

KyussBishop

Three Seasons wrote: »

No, let's ask America or apple to give us 100 billion in cash. Sure the obstacles are only political.

You do realise bonds need to be paid back with interest.

Are you just being deliberately obtuse or trolling here? You know full well through my posts, that I have specifically said bonds need to be paid back, and that they bear interest.

If you want to engage in rhetoric-based argument, then don't pretend to have an actual interest in discussion.

KyussBishop

Anynama141 wrote: »

Kyuss, what you keep ignoring is that the plan is impossible because a United States of Europe does not exist, and nobody wants to create one.

If we had a golden goose, we could use the eggs to fund economic stimulus - but we don't and there's no point in pretending that is an alternative to austerity either.

You are claiming austerity is an indisputable requirement or truth, like an 'economic law' due to economic theory alone, and that is wrong, since there are perfectly good alternative policies available that would totally eliminate austerity, and that are blocked due to political issues.

I have never claimed in this thread, that the policies I am putting forward will ever be implemented (I have specifically said Germany will not allow it), only that this alternative is there, and it makes your claim that austerity is (due to economic theory alone), is the only option, is false.

KyussBishop

Lets make this really simple, since people can't seem to get their head around the idea of a federal EU, and since the US is analogous to a federal EU:
Do people deny, that the US can achieve recovery, without austerity?

Anynama141

KyussBishop wrote: »

You are claiming austerity is an indisputable requirement or truth, like an 'economic law' due to economic theory alone, and that is wrong, since there are perfectly good alternative policies available that would totally eliminate austerity, and that are blocked due to political issues.

I have never claimed in this thread, that the policies I am putting forward will ever be implemented (I have specifically said Germany will not allow it), only that this alternative is there, and it makes your claim that austerity is (due to economic theory alone), is the only option, is false.

But, by the same token, I could argue that mass suicide or a war or some other ridiculous proposition is an alternative, or using a time-machine to prevent Fianna Failure from scuppering the country. They are alternatives, but not ones that would work in the real world as it actually exists.

I was hoping to hear real-world alternatives, even if the science fiction alternatives make for an interesting debate.

KyussBishop

Anynama141 wrote: »

But, by the same token, I could argue that mass suicide or a war or some other ridiculous proposition is an alternative, or using a time-machine to prevent Fianna Failure from scuppering the country. They are alternatives, but not ones that would work in the real world as it actually exists.

I was hoping to hear real-world alternatives, even if the science fiction alternatives make for an interesting debate.

Yes those are idiotic comparisons, put forward for rhetorical affect. By the same token, the US borrowing money to fund spending, is comparable to all of the above; that's utter nonsense.

Three Seasons

KyussBishop wrote: »

Are you just being deliberately obtuse or trolling here? You know full well through my posts, that I have specifically said bonds need to be paid back, and that they bear interest.

If you want to engage in rhetoric-based argument, then don't pretend to have an actual interest in discussion.

My post highlights that there many imaginary options out there, but not many real ones.

Your idea is frankly ridiculous, ignorant of reality and economics.

Paying people ridiculous money to build infrastructure to no one wants or needs is insane.

Your idea means we will pile on more debt to fund projects that will be more than likely money down the drain. We'd be worse off than Greece.

Yes I can already hear you. "This is a Europe wide bond etc etc"

Irrelevant, we'd still be required to pay back our share of debt, debt we can ill afford to pile on to the rest.

Insanity

Chips Lovell

The thing about austerity is that it is working.

We were in a situation where we wouldn't have been able to borrow money to keep the country afloat, so much so we needed a bailout. Now we're back on the international debt markets again and almost out of the bailout.

The whole point of the exercise was getting our public finances back in order so we'd be able to actually borrow money again.

KyussBishop

Three Seasons wrote: »

My post highlights that there many imaginary options out there, but not many real ones.

Your idea is frankly ridiculous, ignorant of reality and economics.

Paying people ridiculous money to build infrastructure to no one wants or needs is insane.

Your idea means we will pile on more debt to fund projects that will be more than likely money down the drain. We'd be worse off than Greece.

Yes I can already hear you. "This is a Europe wide bond etc etc"

Irrelevant, we'd still be required to pay back our share of debt, debt we can ill afford to pile on to the rest.

Insanity

Again your own total ignorance, in saying that a policy analogous to the US using public debt, to fund spending, is 'imaginary', or some radical economic theory when it is done all the time.

It seems blindingly obvious at this stage, that posters are either deliberately ignoring and misrepresenting this, to push their own views, or are just elaborately attempting to troll or control the debate.

Gambas

Bullseye1 wrote: »

The Dollar, Sterling and Chinese Yen.

There has been a boom in luxury goods to Asia. Germany has been exporting luxury cars and other high end products to the the Asian market. The same thing is happening with luxury watches and Swiss watch makers who are even producing Asian exclusive.

http://www.guardian.co.uk/business/2013/feb/08/germany-trade-surplus-exports-imports

You're making it up as you go along.

The Dollar?
http://www.dollars2euro.com/Charts

Euro has appreciated in value by about 30% in the past 10 years


Sterling?
http://www.dollars.com/chart.php/GBP-EUR?period=10y
About 20% stronger

The Chinese Yen?

The Chinese Yen??? I don't know where to start with this one. But it makes me think that maybe you might be bluffing.

Three Seasons

KyussBishop wrote: »

You are claiming austerity is an indisputable requirement or truth, like an 'economic law' due to economic theory alone, and that is wrong, since there are perfectly good alternative policies available that would totally eliminate austerity, and that are blocked due to political issues.

I have never claimed in this thread, that the policies I am putting forward will ever be implemented (I have specifically said Germany will not allow it), only that this alternative is there, and it makes your claim that austerity is (due to economic theory alone), is the only option, is false.

Likewise I am not claiming that the US will donate 100 billion euro to Ireland, however it is an alternative merely obstructed by politics.