Why is Ireland`s National Debt Clock almost as high as Poland`s?

realitykeeper

Poland has ten times the population of the Republic of Ireland yet Ireland`s national debt is definitely not 10% of Poland`s, it is more like eighty something %. Certainly there will be the usual chorus of assertions about Ireland`s higher income per capita and all that but Ireland`s vulnerability is nonetheless extreme. If a recession hit hard, the income the country is so dependent on will no longer there to service the debt. What will Ireland do then?

dr.fuzzenstein

Where you around about 10 years ago?

Silentcorner

We'll all be pulling on the green jerseys I'd imagine...I mean...we are where we are!

Arghus

https://www.youtube.com/watch?v=GtWA3jQN1Pg

goose2005

https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

Ireland's is 70% of GDP. Not that high

Alf Veedersane

The clock is an hour ahead in Poland though...an hour is a long time in economics, as someone possibly says.

California Dreamer

Because we haven't taxed ourselves out of the debt!!! Isn't that the governments answer to everything? TAX TAX TAX!!!!

jobeenfitz

goose2005 wrote: »

https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

Ireland's is 70% of GDP. Not that high

GDP can crash fast, as we now know. 70% not that low either!

LeinsterDub

California Dreamer wrote: »

Because we haven't taxed ourselves out of the debt!!! Isn't that the governments answer to everything? TAX TAX TAX!!!!

You inflate or grow your way out of debt. The US has been at it for years. If you want less tax what services would you like cut?

Kermit.de.frog

jobeenfitz wrote: »

GDP can crash fast, as we now know. 70% not that low either!

As long as governments are elected that will not blow a hole in our finances we'll be fine.

Right now the trajectory is good. That can change very quickly though...

Geuze

http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=sdg_17_40&plugin=1


Irish public debt, 2017

68% of GDP
approx 200 bn


Poland, 2017
51% of GDP

Geuze

Kermit.de.frog

Italy in a bailout this time next year - put money on it


Except there won't be enough money for the rescue

Hammer89

I think a more important question is where you found that apostrophe.

California Dreamer

LeinsterDub wrote: »

You inflate or grow your way out of debt. The US has been at it for years. If you want less tax what services would you like cut?

At midnight on a Saturday night which part of what I said did you think was not total arse!?v:rolleyes:

Irish_rat

realitykeeper wrote: »

What will Ireland do then?

Default or whatever the IMF tell them to do.

Seriously though it's not something worth thinking about life's too short.

Victor

Fianna Fáil.

realitykeeper wrote: »

Poland has ten times the population of the Republic of Ireland

Eight.

yet Ireland`s national debt is definitely not 10% of Poland`s, it is more like eighty something %.

A few factors, but it is important to note that Ireland's economy is a lot more than 10% of Poland's.

A the fall of communism, Poland probably started with almost no structural debt, just short-term trading debt.

Mongfinder General

Kermit.de.frog wrote: »

Italy in a bailout this time next year - put money on it


Except there won't be enough money for the rescue

This is a long time coming. It doesn’t help that they’re a bunch of liars. Anything loaned to them is waste of time.

Franz Von Peppercorn

Kermit.de.frog wrote: »

As long as governments are elected that will not blow a hole in our finances we'll be fine.

Right now the trajectory is good. That can change very quickly though...

Actually the last crash happened because of capitalism not left wing government overspending.

Not that the Irish left are anything but a rabble.

Franz Von Peppercorn

Mongfinder General wrote: »

This is a long time coming. It doesn’t help that they’re a bunch of liars. Anything loaned to them is waste of time.

Christ. Didn’t realise anti Italian bigotry was so advanced in Ireland.

LeinsterDub

California Dreamer wrote: »

At midnight on a Saturday night which part of what I said did you think was not total arse!?v:rolleyes:

I've no idea what you're talking about. It wasn't midnight where I am

Kermit.de.frog

Franz Von Peppercorn wrote: »

Actually the last crash happened because of capitalism.

No.

The last crash happened because of a stupid Irish government.

Nothing to do with capitalism and everything to do with no regulation and feckless expenditure.

If you don't run your country properly you end up in trouble.

Others want to blame the EU etc.

Our problems then were our fault. No one else's. You get what you vote for.

Kermit.de.frog

Mongfinder General wrote: »

This is a long time coming. It doesn’t help that they’re a bunch of liars. Anything loaned to them is waste of time.

The only people buying Italian debt now are the ECB and that ends in October.

No way out for Italy. They elected populists and have not reformed their country at all in the last ten years.

The EU and IMF together don't have the resources to bail them out.

They will fall out of the Euro and it will be the biggest financial disaster of a country in Europe since the Weimar Republic. That's my prediction!

_Brian

LeinsterDub wrote: »

You inflate or grow your way out of debt. The US has been at it for years. If you want less tax what services would you like cut?

Let’s start with something simple and obvious like the dole for anyone more than 3 years out of work. The professionally unemployed needs addressing, not taxing us more to support them.

realitykeeper

goose2005 wrote: »

https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

Ireland's is 70% of GDP. Not that high

GDP gets hit hard by recessions but debt does not. In fact, interest rates increase when recessions come and companies close. Also, GDP is strongly influenced by the velocity of money in the economy and that slows when recessions hit.

The extraordinary QE program conducted by the ECB cannot be repeated for the next recession without serious consequences.

realitykeeper

California Dreamer wrote: »

Because we haven't taxed ourselves out of the debt!!! Isn't that the governments answer to everything? TAX TAX TAX!!!!

Cutting would make a lot more sense.

Del2005

Kermit.de.frog wrote: »

No.

The last crash happened because of a stupid Irish government.

Nothing to do with capitalism and everything to do with no regulation and feckless expenditure.

If you don't run your country properly you end up in trouble.

Others want to blame the EU etc.

Our problems then were our fault. No one else's. You get what you vote for.

So the financial crash that nearly bankrupted the world's banking system which required governments to bail out the banks was our fault. I thought that it was because a US bank collapsed and brought down the house of cards, thanks for correcting history and letting me know it was our fault

As a matter of interest what could we have done not to collapse the world banking system which lead to one of the biggest international recessions? And considering that we were paying more out than we earned how where we to keep the country running after we told the lenders to feck off we aren't paying our debts, regardless of them been secured or not?

realitykeeper

LeinsterDub wrote: »

You inflate or grow your way out of debt. The US has been at it for years. If you want less tax what services would you like cut?

How can we inflate our way out of Debt? Ireland is in the Eurozone. Do you think Germany, the Netherlands and Finland will agree to that?

realitykeeper

Geuze wrote: »

... but check out this link and look at Ireland`s debt per capita. The only two countries in the world with higher debt per capita are Luxembourg and Palau.

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

Luxembourg is an outlier, there is probably some distorting reason for that. Of course, some say Ireland`s GDP is distorted and GNP should be used. Remember Paul Krugman`s leprechaun economics jibe?

realitykeeper

Irish_rat wrote: »

Default or whatever the IMF tell them to do.

Seriously though it's not something worth thinking about life's too short.

If you live in a war zone can you simply ignore it? The national debt will have consequences you cannot ignore.

kalych

Del2005 wrote:

So the financial crash that nearly bankrupted the world's banking system which required governments to bail out the banks was our fault. I thought that it was because a US bank collapsed and brought down the house of cards, thanks for correcting history and letting me know it was our fault

Absolutely correct, however world's financial crash does not equal Irish crash. Irish crash happened because we let Anglo and others lend 60+bn to property developers.

Del2005 wrote:

As a matter of interest what could we have done not to collapse the world banking system which lead to one of the biggest international recessions? And considering that we were paying more out than we earned how where we to keep the country running after we told the lenders to feck off we aren't paying our debts, regardless of them been secured or not?

Probably nothing. What we could have done, though, is regulate banks and the property market better. Kind of like Belgium, Netherlands, Poland, Austria, Finland and oh I don't know, pretty much every other small but reasonable EU nation has done. So that they didn't bankrupt the country. Oh well, maybe next time...

fash

Del2005 wrote: »

So the financial crash that nearly bankrupted the world's banking system which required governments to bail out the banks was our fault. I thought that it was because a US bank collapsed and brought down the house of cards, thanks for correcting history and letting me know it was our fault.

Only certain countries had out of control banking systems - that was a choice. Only certain countries allowed limitless borrowing by consumers to inflate the housing markets - that was a choice.
Of the countries that were required to bail out their banks (US, UK), almost all made massive profits from it because they bailed out their banks correctly and in a limited manner only - the nature of the bail out was a choice.
Blaming "De Layman Brudders" for the Irish financial crash is like blaming the particular rock you hit while driving at 250km/hr down a narrow country road.

Del2005 wrote: »

As a matter of interest what could we have done not to collapse the world banking system which lead to one of the biggest international recessions?

It wasn't a question of not collapsing the world banking system, it was a question of failing to have a robust system in place to survive it.

Del2005 wrote: »

And considering that we were paying more out than we earned how where we to keep the country running after we told the lenders to feck off we aren't paying our debts, regardless of them been secured or not?

They weren't *our* debts. They were bank debts. They only became *our* debts when FF decided to guarantee them. Even up to the day of the bank guarantee even if you had no other good ideas on the table, you could have guaranteed future bond holders only. The existing bond holders had already paid their money and taken their risks and had to wait years or decades for it to be returned with interest- if at all. There was never any reason to guarantee them and nothing achieved by it. In fact it damaged the guarantee given to future bond holders since they now had to share that guarantee with others.

LeinsterDub

realitykeeper wrote: »

How can we inflate our way out of Debt? Ireland is in the Eurozone. Do you think Germany, the Netherlands and Finland will agree to that?

We can't so we've to grow

y0ssar1an22

LeinsterDub wrote: »

You inflate or grow your way out of debt. The US has been at it for years. If you want less tax what services would you like cut?

let me have a little think :rolleyes::rolleyes:

Wanderer78

realitykeeper wrote:

Cutting would make a lot more sense.

You do realise that economic measures such as austerity are a busted flush, in the words of Scottish political scientist mark Blyth, 'it never ever ever works'! And again, global debt problems are not whats commonly perceived, i.e. public debt, it is in fact growing private debt, which is largely due to growing asset prices, in particular housing, it's good for us, apparently!

Arthur Daley

realitykeeper wrote: »

... but check out this link and look at Ireland`s debt per capita.

Luxembourg is an outlier, there is probably some distorting reason for that. Of course, some say Ireland`s GDP is distorted and GNP should be used. Remember Paul Krugman`s leprechaun economics jibe?

Exactly. GDP in Ireland is not a suitable measure when assessing the solvency of the sovereign. Debt will not and cannot be paid out of GDP. It is paid out of the tax base.

The government debt has quadrupled in the past 10 years. However the (sustainable) tax base (the only place the debt will ever be paid out of) is stable, with fairly limited opportunity for growth, as it is massively overdependent on a cohort of middle income paye workers.

The numbers were so bad for Ireland over the last 15 years now that the FG/Labour govt. effectively had to 'default/restructure' parts of it and push it out into the never never. This wasn't the write down promised in 2011 but it was the only workable solution under the circumstances. In a few years it has largely been forgotten how unsustainable this is with a fairly stagnant tax base, everyone seems to be suffering from amnesia.

The only real plan FG/FF have (with the backing of Europe) is to keep importing labour and expand the population. But such wishful, simple minded thinking didn't prevent the economic crash in 2008, you just run out of road if the average worker cannot continue to pay extortionate housing costs and taxes. Meantime average workers are fairly fed up, hence why there is a hung parliament type situation in politics with no dominant party until FG/FF merge.

Once off windfalls like €13bn of tax underpayment from Apple must be used to get the government debt down. That will help a lot but it means government acting responsibly and lobbyists and the media being overruled for the long term good of the people of Ireland.

dr.fuzzenstein

Wanderer78 wrote: »

You do realise that economic measures such as austerity are a busted flush, in the words of Scottish political scientist mark Blyth, 'it never ever ever works'! And again, global debt problems are not whats commonly perceived, i.e. public debt, it is in fact growing private debt, which is largely due to growing asset prices, in particular housing, it's good for us, apparently!

Seems to have worked fine in Ireland. I mean what the hell is Blyth blathering on about?
Should Ireland have tried to grow the economy by injecting massive sums of money? Debt would be far worse now. You don't get to complain about Austerity AND the national debt.
That is magic money tree economics.
So injecting billions into the economy in a financial crisis is not an option for a small player like Ireland.
Next, let the banks fail.
You think it's hard getting a loan/credit card/mortgage now? The one or two surviving banks would not give loans and only at inflated rates. When ECB rates were at zero, mortgages in Ireland were over 5%! Otherwise it would have been 10%.
Ireland would have been right back in the 80's. Jobs only for relatives and an inflated civil service as a posh way of being on the dole.
I mean the civil service is still suffering from that with thousands of redundant admin staff that have very little to no purpose.
You can also have too much austerity.
I think Ireland got it right. And you shouldn't always listen to experts who know it all from behind their keyboard.
It's easy to pick a buzzword and say "XYZ doesn't work!" and write something clever about it.
Doesn't mean it's real world applicable or going to work.

realitykeeper

realitykeeper wrote: »

... but check out this link and look at Ireland`s debt per capita. The only two countries in the world with higher debt per capita are Luxembourg and Palau.

https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

Luxembourg is an outlier, there is probably some distorting reason for that. Of course, some say Ireland`s GDP is distorted and GNP should be used. Remember
Paul Krugman`s leprechaun economics jibe?

You aren't comparing like with like - your link includes private debt so say all those aircraft leasing companies will have lots of debt to add to this but it wouldn'thave much of an impact on the Irish economy.

Luxembourg would be similar.

tabby aspreme

Is Ireland's GDP figure distorted by the amount of Shell company money which passes through the state , but we get minimal return from .

realitykeeper

LeinsterDub wrote: »

We can't so we've to grow

But in a recession, Ireland will not be credit worthy so growth will need to be organic. That means slashing spending in order to stimulate growth in the private sector. Spending more money (even if it were available via credit) would only increase the velocity of money in the economy, like a drug increasing the heart rate of a drug user.

realitykeeper

Wanderer78 wrote: »

You do realise that economic measures such as austerity are a busted flush, in the words of Scottish political scientist mark Blyth, 'it never ever ever works'! And again, global debt problems are not whats commonly perceived, i.e. public debt, it is in fact growing private debt, which is largely due to growing asset prices, in particular housing, it's good for us, apparently!

All debt is a problem, especially in western countries where fiscal, banking and private debt are now an issue. If the perceived risk of lending to Ireland were to rise with a recession, then the state would need to either tax an already indebted population or it would need to cut back. Mark Blyth is wrong. The Austrian School of Economics advocates are right. Kaynesianism to be fair does say that during times of strong economic growth, debt should be paid down but even that minimum of common sense does not reflect reality. Fiscal debt of both the EU and US are growing still, no effort is ever made to pay down the debt.

realitykeeper

Arthur Daley wrote: »

Exactly. GDP in Ireland is not a suitable measure when assessing the solvency of the sovereign. Debt will not and cannot be paid out of GDP. It is paid out of the tax base.

The government debt has quadrupled in the past 10 years. However the (sustainable) tax base (the only place the debt will ever be paid out of) is stable, with fairly limited opportunity for growth, as it is massively overdependent on a cohort of middle income paye workers.

The numbers were so bad for Ireland over the last 15 years now that the FG/Labour govt. effectively had to 'default/restructure' parts of it and push it out into the never never. This wasn't the write down promised in 2011 but it was the only workable solution under the circumstances. In a few years it has largely been forgotten how unsustainable this is with a fairly stagnant tax base, everyone seems to be suffering from amnesia.

The only real plan FG/FF have (with the backing of Europe) is to keep importing labour and expand the population. But such wishful, simple minded thinking didn't prevent the economic crash in 2008, you just run out of road if the average worker cannot continue to pay extortionate housing costs and taxes. Meantime average workers are fairly fed up, hence why there is a hung parliament type situation in politics with no dominant party until FG/FF merge.

Once off windfalls like €13bn of tax underpayment from Apple must be used to get the government debt down. That will help a lot but it means government acting responsibly and lobbyists and the media being overruled for the long term good of the people of Ireland.

Indeed. I of course was not advocating the use of GDP but rather highlighting the per capita debt. I referred to GDP because a lot of people seem to think is especially important, I am not one of them.

Restructuring the economy to be a low cost economy would make sense and of course government spending would need to be cut to a small fraction of what it is.

realitykeeper

I think it is useful to include private debt because there is a lot of private debt in this country. It includes many thousands who are years behind in their mortgages and their debt will probably be passed on to the taxpayer even though it shouldn`t. There is also auto debt, credit card debt, student debt and as you pointed out, commercial debt. All this debt matters. In a recession, aircraft leasing may well be affected and if the companies in question cannot keep up payments, borrowing costs of Irish industry will go up and more jobs will be at risk. As for the banks, they will be right back in the eye of the storm when default rates increase and property prices crash again.

realitykeeper

tabby aspreme wrote: »

Is Ireland's GDP figure distorted by the amount of Shell company money which passes through the state , but we get minimal return from .

I am not sure but a few years ago, Ireland`s economy grew by 26% on paper because of the distorting effect of US multinationals registering in Ireland. I think Pfizers was one of them. Some economists have suggested GNP would be a better indicator in the case of Ireland.

Debt per capita is what I look at.

Hector Bellend

Do you seriously expect any irish government to run the country in a fiscally responsible fashion?

Hector Bellend

realitykeeper wrote: »

I am not sure but a few years ago, Ireland`s economy grew by 26% on paper because of the distorting effect of US multinationals registering in Ireland. I think Pfizers was one of them. Some economists have suggested GNP would be a better indicator in the case of Ireland.

Debt per capita is what I look at.

Therein lies the problem.

A housing crisis with a schooling crisis only around the corner. If only it was a 26% growth in reality.

Wanderer78

realitykeeper wrote: »

All debt is a problem, especially in western countries where fiscal, banking and private debt are now an issue. If the perceived risk of lending to Ireland were to rise with a recession, then the state would need to either tax an already indebted population or it would need to cut back. Mark Blyth is wrong. The Austrian School of Economics advocates are right. Kaynesianism to be fair does say that during times of strong economic growth, debt should be paid down but even that minimum of common sense does not reflect reality. Fiscal debt of both the EU and US are growing still, no effort is ever made to pay down the debt.

apologies, but i think i ll stick to blyths opinion, public debt wasnt really one of the triggers of the recession, again, it was the rapid rise in private debt, largely due to the deregulation of the financial sector, the fact that banks actually create the majority of our money supply via loans, and disturbingly banks are also still seen by many as intermediates in this process, is a major cause for concern

Harry Palmr

Cheap money and wobbly banks = blame the euro.

Pro-cyclical fiscal imprudence and central bank incompetence = blame the gubberment

Star Bingo

Reminds me what’s up with the new ‘s and ’s on the iphones now

Can still do a ' but I have to copy it. Same goes with the “ and ” if I want to hyperlink it’s a f*ckin disaster

realitykeeper

Hector Bellend wrote: »

Therein lies the problem.

A housing crisis with a schooling crisis only around the corner. If only it was a 26% growth in reality.

The housing crisis was the result of the Bolschivicization of the building sector. Bring back unmanipulated capitalism and the problems in the housing market will sort themselves out.

realitykeeper

Wanderer78 wrote: »

apologies, but i think i ll stick to blyths opinion, public debt wasnt really one of the triggers of the recession, again, it was the rapid rise in private debt, largely due to the deregulation of the financial sector, the fact that banks actually create the majority of our money supply via loans, and disturbingly banks are also still seen by many as intermediates in this process, is a major cause for concern

In the movie The big Short, they concluded that the bankers were not being stupid because they knew the government would bail them out and the governments did bail them out.