Should the constitution protect taxpayers money?

realitykeeper

The constitution as it is presently structured does not protect taxpayers money and it does not protect taxpayers from exposure to government acquired debt. This has to stop. The bank bailout is the obvious example but there are so many others.

The government borrows on the taxpayers behalf to give to charity. The courts issue compensation when someone trips on a footpath and the taxpayer gets the bill. Many taxpayers are paying for services, benefits and insurance they don`t need and never use. Taxpayers pay the salaries of the government and their advisers. Are they worth it? If so, why does the country have a debt?

There is only one reason a government has to borrow and that is mismanagement of the economy. Why should the taxpayer be forced to pay for mismanagement? Governments don`t have to raise money on the bond markets, if an investment is viable the private equity markets will provide the funding. Issuing bonds is a waste of taxpayers money because of the interest, therefore it should be prohibited by the constitution.

The government should save for investments in infrastructure and otherwise spend only according to its means. A constitutional tax opt out option for the citizen is one way to stop the waste of taxpayers money or at the very least it will ensure that the tax is only paid by people who think it is worth it. The way to enforce this policy would be to impose a double tax on those who opt out and are later caught using something they are not entitled to.

Chips Lovell

realitykeeper wrote: »

Why should the taxpayer be forced to pay for mismanagement?

We elect a government to raise and spend taxes on our behalf. If we don't like how they do it, we can elect a new one next time around. If they stuff up, well we're the people who elected the clowns in the first place and we suffer the consequences.

realitykeeper wrote: »

...and are later caught using something they are not entitled to.

Like roads?

spank_inferno

Vladimir Kurtains wrote: »

We elect a government to raise and spend taxes on our behalf. If we don't like how they do it, we can elect a new one next time around. If they stuff up, well we're the people who elected the clowns in the first place and we suffer the consequence.

The 'next time around' thing is the issue.

I would happily have a 'recall' mechanism in the constitution.... 5years is a long time to correct a governments course.

I'd also love to see a constitutional barring of government current spending deficits.

Chips Lovell

Having short terms has its downside too, as you'll get a government that is focused entirely on re-election and thus more likely to resort to short-term, populist measures.

A bar on deficit spending would also preclude any Keynesian type counter-cyclical budgetary strategy.

Pro Hoc Vice

spank_inferno wrote: »

The 'next time around' thing is the issue.

I would happily have a 'recall' mechanism in the constitution.... 5years is a long time to correct a governments course.

I'd also love to see a constitutional barring of government current spending deficits.

Currently tax revenue is (my figure are rough) about €40 billion, the top 3 departments Social Welfare, Health and Education exceed the income from tax by a few billion. So what are the proposals to fix that problem.

A proposal to fix the problem,

Make education private sure why educate the poor, make health care private again why heal people who can't make money and finally SW well pensioners take up 1/3 of the SW budget lets solve that by only rich old can live past 65. BTW if anyone does not have their sarcasm switch on my proposal is a joke.

Bullseye1

I don't see the issue with placing restrictions of government debt in the constitution. I know its part of the EU budget now but we cannot rely on them to keep our own shower in check.

Geuze

infosys wrote: »

Currently tax revenue is (my figure are rough) about €40 billion, the top 3 departments Social Welfare, Health and Education exceed the income from tax by a few billion. So what are the proposals to fix that problem.

Note that Gen Govt revenues are about 55-56bn

http://www.cso.ie/en/releasesandpublications/nationalaccounts/governmentfinancestatistics/

realitykeeper

Vladimir Kurtains wrote: »

Like roads?

Hardly, who would opt out of that tax.

realitykeeper

infosys wrote: »

Make education private sure why educate the poor,

The poor wouldn`t be poor if they weren`t being taxed to fund an incompetent and inefficient public sector. You also ask the question about the top 3 departments spending more than government revenue. Any pea brain could tell you the answer to that. Cuts galore.

johnnyskeleton

I hate to point out the obvious flaw, but at the time of the bank guarantee, most irish people would've voted for it. This is because:

1) ff agreed it
2) fg and some smaller parties supported it
3) it was presented as a clever irish stroke that the European/international dullards hadn't spotted yet and irish people love pulling a stroke.

Ultimately it was only at the time of the bailout that irish people balked, by which time it was too late.

What we need is not a constitutional protection, but a more aware electorate. Hopefully our children's children will not repeat the same mistakes and so in the 2108 banking crisis they will object to their politicians voting for another guarantee.

RichardAnd

johnnyskeleton wrote: »

What we need is not a constitutional protection, but a more aware electorate. Hopefully our children's children will not repeat the same mistakes and so in the 2108 banking crisis they will object to their politicians voting for another guarantee.

Having an objection is one thing. Getting up and doing something about it is entirely another.

realitykeeper

johnnyskeleton wrote: »

I hate to point out the obvious flaw, but at the time of the bank guarantee, most irish people would've voted for it. This is because:

1) ff agreed it
2) fg and some smaller parties supported it

True but irrelevant. Even if the Irish people had a referendum, voted to bail out the banks and cheered the government for writing it into law - that still does not make the Irish people liable because they did not borrow the money, the banks did.

All that is required to undo the bailout is political courage and the political will. The former does not exist so neither does the latter.

Sheldons Brain

1) ff agreed it
2) fg and some smaller parties supported it
3) it was presented as a clever irish stroke that the European/international dullards hadn't spotted yet and irish people love pulling a stroke.

The devil is in the detail. The concept of a guarantee of banks future borrowing was sensible enough, as it allowed them stay in business and preserved deposits. Guaranteeing all of their existing bonds, without knowing the actual state of the accounts, was total madness.

sarumite

realitykeeper wrote: »

All that is required to undo the bailout is political courage and the political will. The former does not exist so neither does the latter.

Even undoing the bank bailout, we would still have had a massive deficit, thus taken on a lot of government aquired debt. The alternative would have been a slash and burn policy with regards out budget which would have had severe negative knock on effects. I think government debt (at least in terms of the current bailout (and lets remember only about 1/3 of the bailout money went to banks) were a symptom of poor government policy. The constitutional amendment you have suggested would not have changed that as FF were able to buy votes via tax cuts and increases in PS/SW all while maintaining a pretty tight budget.

realitykeeper

sarumite wrote: »

Even undoing the bank bailout, we would still have had a massive deficit, thus taken on a lot of government aquired debt. The alternative would have been a slash and burn policy with regards out budget which would have had severe negative knock on effects. I think government debt (at least in terms of the current bailout (and lets remember only about 1/3 of the bailout money went to banks) were a symptom of poor government policy. The constitutional amendment you have suggested would not have changed that as FF were able to buy votes via tax cuts and increases in PS/SW all while maintaining a pretty tight budget.

Not necessarily. It depends on how the money is accounted for. It is true that the Irish government borrowed and paid the bond holders but removing the debt from the accounts solves the problem.

I am not talking about default. There are too many ways of removing this debt to mention. All I will say is if it is possible to give the banks debt to the taxpayer it is possible to undo the same in the books. The government could then send Europe an administrative fee for passing their money to the banks senior bondholders as they insisted along with a letter to praise them for their generosity.

It makes no difference if the international community view this as a default because if Ireland imposes massive austerity (as it should do anyway) - then it will not need to borrow on the bond markets. By undoing the bank bailout the government can focus on clearing the remaining national debt by selling every single asset owned by the state and dispensing with every paid public sector/ civil service employee in the country. The few volunteer TDs who choose to remain in the Dail could continue their work as volunteers or call an election for volunteer TDs to run the country on a shoestring from a few offices rented in some private sector building.

That way the country will be debt free and efficiently run.

kalych

realitykeeper wrote: »

It makes no difference if the international community view this as a default because if Ireland imposes massive austerity (as it should do anyway) - then it will not need to borrow on the bond markets. By undoing the bank bailout the government can focus on clearing the remaining national debt by selling every single asset owned by the state and dispensing with every paid public sector/ civil service employee in the country...

...That way the country will be debt free and efficiently run.

It would be a great social experiment, but when do you snap out of it? When the unemployment is 20% or 30%? When number of young people that goes to college the following year drops by over 50% due to cuts in both available places and grants making multinationals consider their future here?

Taking the money out of the banks will effectively leave BOI as the only bank in the country. Where will businesses borrow from? Will Europe foot the bill? This will lead to more job losses.

Will a rapid decline in living standards not allow Sinn Fein to collect enough disgruntled people's votes to get elected? And who knows, in 10 years we might get our very own totalitarian leader as more people are looking for a strong hand in managing the failing economy.

But it is not all doom any gloom, sure we'll live within our means.

the_syco

realitykeeper wrote: »

The poor wouldn`t be poor if they weren`t being taxed to fund an incompetent and inefficient public sector. You also ask the question about the top 3 departments spending more than government revenue. Any pea brain could tell you the answer to that. Cuts galore.

First off; cut the social welfare.
Cut the police, less police, more crime.
Cut the health care, more people will die.

realitykeeper wrote: »

The few volunteer TDs who choose to remain in the Dail could continue their work as volunteers or call an election for volunteer TDs to run the country on a shoestring from a few offices rented in some private sector building.

That way the country will be debt free and efficiently run.

The politicians will still live well, they'll just be a lot more corrupt.

kalych wrote: »

It would be a great social experiment, but when do you snap out of it? When the unemployment is 20% or 30%? When number of young people that goes to college the following year drops by over 50% due to cuts in both available places and grants making multinationals consider their future here?

Cut the SW, and I doubt the people would have the funds to educate themselves or their kin.

kalych wrote: »

Taking the money out of the banks will effectively leave BOI as the only bank in the country. Where will businesses borrow from? Will Europe foot the bill? This will lead to more job losses.

The businesses will borrow from the loan sharks, and from organised crime, as no-one in their right mind would lend to a country that can't even pay their own civil servants!

kalych wrote: »

Will a rapid decline in living standards not allow Sinn Fein to collect enough disgruntled people's votes to get elected? And who knows, in 10 years we might get our very own totalitarian leader as more people are looking for a strong hand in managing the failing economy.

Without an army, with local militias keeping law, I'd say SF would walk in with their populist promises. If they'd last a year once they cop that they'll need to impose taxes to keep afloat is another thing altogether, though!

golfwallah

Maybe we need a debt ceiling like they have in the USA?

Although it's the US Congress that imposes the ceiling on the executive (the President), at least it prompts periodic debate and some form of compromise whenever government overspending gets to a predetermined level.

Quite how it would work within Ireland's democratic process is another matter entirely. We could hardly call a referendum on government spending - can't see any party supporting that, so who would impose the borrowing limit on government - the Dail?

Even getting a national debate on an issue like this would be problematic - unless there is another crisis in International markets and we are unable to borrow. I guess, at the end of the day, the markets impose borrowing limits when they feel that future taxation will be insufficient to pay them back.

But wouldn't it be better if we set borrowing limits on ourselves?

Count Dooku

the_syco wrote: »

First off; cut the social welfare.
Cut the police, less police, more crime.
Cut the health care, more people will die.

Why do you need cut police when you cut a lot from civil service, plus bureaucracy in other parts of public services and very few people will notice it?

realitykeeper

the_syco wrote: »

Cut the SW, and I doubt the people would have the funds to educate themselves or their kin.

What some people fail to realize is that government spending keeps prices high. So you have this crazy situation where the government borrows (which costs more to pay back) then the government spends (which causes inflation). If the government stopped borrowing and cut spending the private sector monopolies like the universities could only charge what people could afford.

So if SW is cut, whatever few cent you have will be all you can afford so the colleges can choose between getting a little money or no money.

kalych

realitykeeper wrote: »

What some people fail to realize is that government spending keeps prices high. So you have this crazy situation where the government borrows (which costs more to pay back) then the government spends (which causes inflation). If the government stopped borrowing and cut spending the private sector monopolies like the universities could only charge what people could afford.

So if SW is cut, whatever few cent you have will be all you can afford so the colleges can choose between getting a little money or no money.

Yeah, but by this logic we cannot reduce pricing levels due to the single European currency, before what you are suggesting is implemented, we need to exit the Euro. No sane farmer will sell produce cheaper here if they can export it for more, neither would college professors work for less money.

Your suggestion would lead to cheaper prices, were we to leave the Eurozone, but also the quality of what is on offer would drop significantly.

Solution - ruin the economy as some people do not understand government debt mechanism!

realitykeeper

kalych wrote: »

Yeah, but by this logic we cannot reduce pricing levels due to the single European currency, before what you are suggesting is implemented, we need to exit the Euro. No sane farmer will sell produce cheaper here if they can export it for more, neither would college professors work for less money.

Your suggestion would lead to cheaper prices, were we to leave the Eurozone, but also the quality of what is on offer would drop significantly.

Solution - ruin the economy as some people do not understand government debt mechanism!

Irish politicians behave like the housewife who uses loan sharks and hands over the childrens allowance. The problem is that the next credit crunch will not be solvable by European or international intervention. Live today pay tomorrow may be possible as long as tomorrow never comes but the can has been kicked almost to the end of the road and its a minute to midnight. The grim reaper is coming for his pound of flesh and this time the problem will be so vast the troika will not be able to help us.
Living within our means will not ruin the economy. On the contrary it will inspire confidence in the long term viability of the state.

sarumite

realitykeeper wrote: »

Irish politicians behave like the housewife who uses loan sharks and hands over the childrens allowance. The problem is that the next credit crunch will not be solvable by European or international intervention. Live today pay tomorrow may be possible as long as tomorrow never comes but the can has been kicked almost to the end of the road and its a minute to midnight. The grim reaper is coming for his pound of flesh and this time the problem will be so vast the troika will not be able to help us.
Living within our means will not ruin the economy. On the contrary it will inspire confidence in the long term viability of the state.

Living within our means does not mean you have to dismantle the social, economical and political fabric of our society as your grand plan would require. If a country were to run a surplus, it shouldn't necessary go out of its way to spend spend spend any more than a country running a deficit needs to quickly cut cut cut. Government finances need to be viewed over the long term as well as short term.

realitykeeper

sarumite wrote: »

If a country were to run a surplus, it shouldn't necessary go out of its way to spend spend spend any more than a country running a deficit needs to quickly cut cut cut. Government finances need to be viewed over the long term as well as short term.

During the boom years the country did spend, spend, spend. One of the benefits of cutting, cutting, cutting now is it will teach the good time spenders a lesson in life. Democracy works well with a smart electorate but it works poorly with a stupid electorate. One of the drawbacks of democracy is it has the responsible shackled and chained to the stupid so it is imperative that the stupid be taught responsibility by correcting the cost and consequence of their stupidity regardless of the pain and definitely at the cost of selling everything the state owns. State owned stuff generally costs the taxpayer a fortune anyway so the country would be better off giving it all away for free (or paying to get rid of it) than letting the government use it as an excuse to tax us to subsidize it.

golfwallah

realitykeeper wrote: »

During the boom years the country did spend, spend, spend. One of the benefits of cutting, cutting, cutting now is it will teach the good time spenders a lesson in life. Democracy works well with a smart electorate but it works poorly with a stupid electorate. One of the drawbacks of democracy is it has the responsible shackled and chained to the stupid so it is imperative that the stupid be taught responsibility by correcting the cost and consequence of their stupidity regardless of the pain and definitely at the cost of selling everything the state owns. State owned stuff generally costs the taxpayer a fortune anyway so the country would be better off giving it all away for free (or paying to get rid of it) than letting the government use it as an excuse to tax us to subsidize it.

I think you are now getting closer to answering the question you posed in the title of this thread.

It's not the constitution that needs fixing - it's the electorate by making them more informed about the real issues confronting them at election time.

I don't accept that people are stupid because they are not properly informed on the issues. But poorly informed, indeed, they appear to be.

Just look at the last general election. How many people voted either Fine Gael or Labour into power, having read and understood their election manifestos? Very few, I would dare to say. From what I can see, many people voted in the current government, mainly, because they weren't Fianna Fail or the Greens, who woefully mismanaged power when they had it.

That doesn't make the present administration or their policies any better than the last - just different.

The real acid test will be how the current government parties deliver on their promises. But then again, in the fog of the next electoral campaign, it is more likely the slogans, personal attacks and headlines, appealing to immediate voter self interest (rather than the long term good), that will win out, in the absence of a better informed electorate.

sarumite

realitykeeper wrote: »

During the boom years the country did spend, spend, spend.

I am fully aware of this. As I said previously, this is what we needed to stop happening, however you constitutional amendment as outline in the OP wouldn't stop this as the government were able to spend without incurring a deficit. As such, your constitutional amendment will impact the symptoms and not he causes which is why I believe your OP is fundamentally flawed.

Phoebas

golfwallah wrote: »

The real acid test will be how the current government parties deliver on their promises. But then again, in the fog of the next electoral campaign, it is more likely the slogans, personal attacks and headlines, appealing to immediate voter self interest (rather than the long term good), that will win out, in the absence of a better informed electorate.

The electorate didn't give any party an overall majority so neither party can be expected to deliver on items in their manifestoes (unless there were specific red line issues that they promised not to compromise on) - the electorate in effect decided that they wanted a compromise.
They can only be expected to deliver on the programme for government.

golfwallah

Phoebas wrote: »

The electorate didn't give any party an overall majority so neither party can be expected to deliver on items in their manifestoes (unless there were specific red line issues that they promised not to compromise on) - the electorate in effect decided that they wanted a compromise.
They can only be expected to deliver on the programme for government.

Agreed - it's the compromise promises contained in the programme for government I'm talking about.

This will make the next general election very interesting as to whether the voters put a final nail in FF's coffin, as the ultimate price to pay for allowing unbridled expansion of a highly leveraged construction boom that we will be paying for in the decade/s ahead.

Then again, a lot can happen between now and the next general election, particularly with the risks around the continuing rising national debt.

But putting safeguards in the constitution to prevent rising debt - I don't think this would work.

Ultimately, it's the choices we make at election time (from the alternative policies put forward) that matter. And the more informed people are about these choices the better, IMO - that is leaving aside possible further international crises that are totally outside government control.