Deficit in Government Figures

jjbrien

Looks like the government have managed to run the country into the ground 1.4 billion deficit so far this year we will be in the red by 1 billion by the end of the year according to rte. Is this the end of the Celtic tiger?

mike65

Government spending and tax reciepts do not run in tandem, spending is signifcantly higher in the first 6 months than the last ( even allowing for December spend splurge before the books are closed for the financial year), while tax receipts tend to be stronger later in year.

I would'nt read much into the figuers and anyway look what happened last year, predicted billion deficit ended up 3 billion surplus, they don't know themsevles until the final numbers are totalled.

Mike.

Akrasia

jjbrien wrote:

Looks like the government have managed to run the country into the ground 1.4 billion deficit so far this year we will be in the red by 1 billion by the end of the year according to rte. Is this the end of the Celtic tiger?

How much did the cut in the top rate of tax cost us again?

jjbrien

It seems all these cuts and extra speding is hiiting us hard. Also with the slow down in the property maket and house prices falling is a tell tale sign that the economy is faultering. Looks like the goverment will have a hard 5 years as expected.

Fratton Fred

jjbrien wrote:

It seems all these cuts and extra speding is hiiting us hard. Also with the slow down in the property maket and house prices falling is a tell tale sign that the economy is faultering. Looks like the goverment will have a hard 5 years as expected.

did you honestly think the economy could continue growing at the same rate?

joecoote

As much as I haven't liked government policy, there is no real melt down in the economy. There has been overspending by government and unabated home construction in the six months in the run up to the election. Draw your own inferences. However, the Irish economy is in much better economic health than any time previously. The economy is more diverse.

As the deterioration in home construction takes place the government have massive civil projects to pick up some of the slack.

Lemming

joecoote wrote:

As much as I haven't liked government policy, there is no real melt down in the economy. There has been overspending by government and unabated home construction in the six months in the run up to the election. Draw your own inferences. However, the Irish economy is in much better economic health than any time previously. The economy is more diverse.

With over a quarter of our economy being propped up by the construction industry I will say "cobblers" to the assertion that the economy is more diverse and then ask you what medication you're on because it sounds fun. The economy has never been more vulnerable than any time in the past.

As the deterioration in home construction takes place the government have massive civil projects to pick up some of the slack.

Tell me .. where would the funding for all of these "massive civil projects" be coming from once the economy slows down [further]? :rolleyes:

Jonny Arson

jjbrien wrote:

Looks like the government have managed to run the country into the ground 1.4 billion deficit so far this year we will be in the red by 1 billion by the end of the year according to rte. Is this the end of the Celtic tiger?

The Celtic Tiger has been nearly dead since 2001, he's only been kept on a life support machine with a diet of cheap credit, personal debt, 40 year mortgages and 23% GDP on construction. I think now is looking the inevitable time this machine is going to switch off by itself and with a bang!

I wonder how Bertie is going to cope now with the loss of his pet Tiger, he could well be lost as he has never been in this situation where his Tiger pretty much did everything by itself, ah sure his mate Biffo who just knows absolutely everything about economic ''prudence'' and ''management'' surely will sort it all out

jmayo

joecoote wrote:

As much as I haven't liked government policy, there is no real melt down in the economy. There has been overspending by government and unabated home construction in the six months in the run up to the election. Draw your own inferences. However, the Irish economy is in much better economic health than any time previously. The economy is more diverse.

As the deterioration in home construction takes place the government have massive civil projects to pick up some of the slack.

The economy is more diverse :rolleyes:
Yeah our residential construction industry now employes more people than manufacturing, where you can actually try and export your finished products.
The economy has more people employed than ever before, but take a look where they are employed and how sutainable are the jobs?
The jobs created have been in lower end retail sector and in construction.
The construction jobs will go when housing construction cuts back.
The retail jobs will go when people have less disposable income, due to either loosing their own jobs or having to support both the unemployed and the overweight/overpaid public sector, through higher income taxes.
Yes, the income tax will have to rise again, otherwise how will we meet benchmarking requirements.

Take a look at the job losses in last few years.
They have been in software/telecomms development (our supposed high end service jobs) and in manufacturing.

When building booms ends what will some towns resort to, these famous high end service jobs I suppose.

Good example is Carlow, look at the production jobs that have been lost with the likes of Lapple, Bruan and the Sugar factory closing or laying off workers.
Yeah there are now more furniture shops, home interior shops and shopping centres than ever in the town, but does anybody wonder where the people that keep them open get their money?

As the deterioration in home construction takes place the government have massive civil projects to pick up some of the slack ????

Would people ever cop on.
I have lost count of the number of times that have I asked on various forums on boards and in real life, how many plasterers and plumbers will be employed building roads, harbours or even hospitals.
Jeeze some people on here must never have heard of Catepillar or Komatsu?

BTW we don't tend to build schools, our kids aren't important until voting age.

mike65

Lemming wrote:

Tell me .. where would the funding for all of these "massive civil projects" be coming from once the economy slows down [further]? :rolleyes:

Most governments usually borrow for capital spending, the last 10 years have been different as the funding for most projects as been budgeted out of the current spend (plus now exhusted EU cash). Indeed much of T21 is still envisaged as being built without recourse to borrowing. Which makes little sense in the ECB era when the debt/GDP ratio is 25% and still falling (slowly).

Mike.

Akrasia

Jonny Arson wrote:

I wonder how Bertie is going to cope now with the loss of his pet Tiger

I won't understand how he doesn't commit suicide.




Realistically, Bertie won't have to deal with the full effects of the downturn because he'll have resigned before it fully materialises (by that I mean when it's gotten so bad that no amount of corporate spin and propaganda from FF and the media can deny the recession anymore)

When Bertie is gone, Cowen will just blame everything on his predecessor or the greens or the opposition for 'talking down the economy' and FF will survive relatively unscathed as the electorate bury their heads in the sand and re-elect FF because they can't see a 'real alternative' (Labour and FG won't form a government by themselves, and the greens will have become badly tainted by their association with FF (they're already being blamed by their supporters for the M3 and Co-location as if these things were green policies even though the real blame lies with FF/PDs)

Akrasia

mike65 wrote:

Most governments usually borrow for capital spending, the last 10 years have been different as the funding for most projects as been budgeted out of the current spend (plus now exhusted EU cash). Indeed much of T21 is still envisaged as being built without recourse to borrowing. Which makes little sense in the ECB era when the debt/GDP ratio is 25% and still falling (slowly).

Mike.

we're in the EMU now and we're forbidden from running high budget deficits so there goes that avenue when we run out of budget surpluses to finance our capital expenditure