What's the difference between 1987 and 2010?

tomflynn

See below - copied from Dick Roche's website
Apart from high inflation and high interest rates - it does not appear that the end of 2009/2010 will be remarkably different in terms of the state of the economy or policy responses than Dick's charge on FG/Labour 1987 govt!


"It is worth reminding ourselves just how bad things were the last time there was a full term Fine Gael/Labour Government (1987):

- Ireland’s debt per head higher than Ethiopia or Sudan.

- National Debt increase by the equivalent of EUR75 billion in today’s money.

- Even 10 years ago, FG and Labour were spending more on servicing the National Debt than they were investing in Education.

- Emigration rampant: 30,000 leaving Ireland every year,

- 250, 000 men & women unemployed,

- 16% adult population were without a job,

- Inflation was at 21%,

- Interest rates reached 21%

– people handing back their homes.

The Financial Times - international moneylenders were going to "pull down the shutters on Ireland".

Fine Gael and Labour’s only response was to raise

- Personal taxes to 40% at the standard rate and 65% at the higher rate.

- The standard rate of income tax in 2006 is 20% and the top rate is 42%.

- Impose residential & wealth tax."

eirmail

tomflynn wrote: »

- The standard rate of income tax in 2006 is 20% and the top rate is 42%.

I am confused why are you talking about 2006?

tomflynn

tomflynn wrote: »

"It is worth reminding ourselves just how bad things were the last time there was a full term Fine Gael/Labour Government (1987):

- Ireland’s debt per head higher than Ethiopia or Sudan.

- National Debt increase by the equivalent of EUR75 billion in today’s money.

- Even 10 years ago, FG and Labour were spending more on servicing the National Debt than they were investing in Education.

- Emigration rampant: 30,000 leaving Ireland every year,

- 250, 000 men & women unemployed,

- 16% adult population were without a job,

- Inflation was at 21%,

- Interest rates reached 21%

– people handing back their homes.

The Financial Times - international moneylenders were going to "pull down the shutters on Ireland".

Fine Gael and Labour’s only response was to raise

- Personal taxes to 40% at the standard rate and 65% at the higher rate.

- The standard rate of income tax in 2006 is 20% and the top rate is 42%.

- Impose residential & wealth tax."

This is copied from Dick Roche's website - 2006 was clearly a time when FF considered itself invincible relative to FG and Lab using the above comparison - the point really is that at the end of 2009/2010 in terms of most of the indicators Dick Roche used in 2006 we are back to 1987 levels (if not even significantly worse off).

ednwireland

just remind me how long were they in after FF left that mess again (i only moved here in 1997 so i'm a bit shakey on that ) you should have tried getting a job in the north of england at the same time my OH was paying 17% (i think)
at the time on her mortgage

i'm not sure the point ol' dick's trying to make really is it "we've messed up th economy so trust us to fixit" or is it "you cant trust them other ones they had to dig us out last time "

JerryQ

Written as if it was FG/Labour's fault - when they were just dealing with the mess left by another populist FF government.
No mention of the fact that most of the debt had been run up Jack Lynch's government filling up the civil service with admin staff (sounds familiar?) or spending billions to build a toxic waste dump employing a couple of hundred people on the Shannon (Alcan Alumina).

And what the hell does the debt per head of Ethiopia/Sudan matter? What matters is the debt as % of GDP (or in Ireland's case GNP) - I'm certain that even when our debt was at its lowest it was still higher per head than Ethiopia or Sudan.

While the rest of the world recovered fairly rapidly from the recession of the late 70's, we were left in a 10+ years recession caused by FF's spending - and it looks like we're going that way again rapidly.
Cut wages, raise taxes, lay-off civil servants and keep our heads down until the UK/US recover.
And let the banks go belly-up. NAMA will put us in a 30year recession.

eamonnm79

JerryQ wrote: »

Written as if it was FG/Labour's fault - when they were just dealing with the mess left by another populist FF government.
No mention of the fact that most of the debt had been run up Jack Lynch's government filling up the civil service with admin staff (sounds familiar?) or spending billions to build a toxic waste dump employing a couple of hundred people on the Shannon (Alcan Alumina).

And what the hell does the debt per head of Ethiopia/Sudan matter? What matters is the debt as % of GDP (or in Ireland's case GNP) - I'm certain that even when our debt was at its lowest it was still higher per head than Ethiopia or Sudan.

While the rest of the world recovered fairly rapidly from the recession of the late 70's, we were left in a 10+ years recession caused by FF's spending - and it looks like we're going that way again rapidly.
Cut wages, raise taxes, lay-off civil servants and keep our heads down until the UK/US recover.
And let the banks go belly-up. NAMA will put us in a 30year recession.

We have by far the biggest foreign dept per person than any other nation on the planet right now. No African counry is even in the top 20 Top Debtor Nations. 1. Ireland - 811%
External debt (as % of GDP): 811%
External debt per capita: $549,819

Gross external debt: $2.311 trillion (Q4 2008)
2008 GDP: $285 Billion dollors

Thats right folks every man woman and child in Ireland owes 549,819 to foreign banks/investors
http://www.cnbc.com/id/30308959?slide=16

Dick Roche is beyond contempt.

halkar

The biggest difference to me is we had investment coming in to country during 90s which helped for recovery. I do not think this will happen this time around :pac:

SkepticOne

eamonnm79 wrote: »

We have by far the biggest foreign dept per person than any other nation on the planet right now. No African counry is even in the top 20 Top Debtor Nations. 1. Ireland - 811%
External debt (as % of GDP): 811%
External debt per capita: $549,819

To be fair, a lot of that external debt is due to Ireland's status as a tax haven. Subsidiaries of multinationals based here often owe huge amounts to their parent companies in the US.

eamonnm79

SkepticOne wrote: »

To be fair, a lot of that external debt is due to Ireland's status as a tax haven. Subsidiaries of multinationals based here often owe huge amounts to their parent companies in the US.

Intresting why do Multinationals hold their debt in Ireland rather that the home country?
I thought they kept their profits in Ireland for tax reasons not their debts?

ionix5891

What's the difference between 1987 and 2010?

we still dont have flying cars

Sleepy

eamonnm79 wrote: »

Intresting why do Multinationals hold their debt in Ireland rather that the home country?
I thought they kept their profits in Ireland for tax reasons not their debts?

double entry accounting.

The profit is a positive balance in their bank account.

That same figure exists on their balance sheet as a debt owed to their parent company.

gurramok

We owe about €400bn+ in private debt, the highest in the EU per capita by a mile. We did not have that in 1987, what we had then was one of the highest public debts.

In 20 odd years since, its been a transfer of debt from the govt to the person.

ionix5891

gurramok wrote: »

We owe about €400bn+ in private debt, the highest in the EU per capita by a mile. We did not have that in 1987, what we had then was one of the highest public debts.

In 20 odd years since, its been a transfer of debt from the govt to the person.

no "we" dont owe that much

most of the debt owed in this country is by to corporations attracted here due by low corpo tax

1huge1

ionix5891 wrote: »

no "we" dont owe that much

most of the debt owed in this country is by to corporations attracted here due by low corpo tax

And with Obama's new foreign tax policies that figure is set to get smaller.

eamonnm79

Sleepy wrote: »

double entry accounting.

The profit is a positive balance in their bank account.

That same figure exists on their balance sheet as a debt owed to their parent company.

fello wickla boy, Any chance you could explain that in a little more detail to someone who isnt up on this stuff.
oh and how would it affect Ireland if these companies went belly up? oh and if some of it is bank debt are these banks all covered by the bank guarantee scheme?

JerryQ

US Co's in particular keep their profits here, as they don't have to pay the US Corporation Tax until its repatriated - its like they're getting an interest free loan from the US govt.

If the multi-national's Irish Company has declared profits of €100million, and these haven't been sent back to the US Company, then, on the Irish Company's balance sheet these profits show up pretty much as a loan from the US Co to the Irish Co.

gurramok

ionix5891 wrote: »

no "we" dont owe that much

most of the debt owed in this country is by to corporations attracted here due by low corpo tax

Yes, some of it is banking/companies debt along with mortgage/personal debt. Trying to find a breakdown, the best i could find is http://www.independent.ie/business/irish/lower-taxes-and-charges-needed-to-deflate-debt-mountain-in-short-period-1618574.html

At the end of 2007, according to Central Statistics Office (CSO), personal debt in Ireland stood at €148bn. While no figure is yet available for 2008, various forecasts show that by the end of 2008, Irish households' total debt, inclusive of mortgages, was some 170pc to 185pc of GDP. This indebtedness caused a significant shift in the overall solvency in our economy.

The latest International Monetary Fund (IMF) analysis, presented in a quarterly 'Global Financial Stability Report' from Q4 2008, shows that by the end of 2007 Ireland was the most heavily indebted country in the entire developed world in terms of private sector, household and corporate debt ratios to GDP.

The below says its mostly mortgage related. If thats true, MNC's are not involved in the property game.

http://www.irishtimes.com/newspaper/ireland/2009/0512/1224246324534.html

The state faces the prospect of two debt burdens: its citizens, after overpaying for property, carry a huge amount of private, mostly mortgage, debt. Private indebtedness reached about 250% of GNP last year, equivalent to a private debt pile of over €400bn.

http://www.irisheconomy.ie/Crisis/McCarthyCrisis.pdf

Still, we do have have one of the highest personal debt levels in the EU at least!

Do you have a source?

partyguinness

Personal debt is the main difference now.

In 1987 people had no money "But ser we were happy...blah blah". People are up to their eyeballs in personal debt.

johnnyskeleton

gurramok wrote: »

We owe about €400bn+ in private debt, the highest in the EU per capita by a mile. We did not have that in 1987, what we had then was one of the highest public debts.

In 20 odd years since, its been a transfer of debt from the govt to the person.

Well the next 20 years will be characterised by the sudden transfer of that private debt back to the public purse, and the slow, painful repayment of it by taxpayers, most of whom had little to do with racking up these massive debts.

markopantelic

well 20 years ago the world could come to ireland, today ireland must go to the world.

Brian.

2010 hasnt happened yet, thats the diff :pac: