Current & Capital Deficit Spending

If we want recovery we need to reduce costs to boost employment and for future growth we need to invest in well thought out capital projects

However,


http://www.independent.ie/national-news/cowens-backtrack-on-cuts-in-public-pay-1924026.html

Last week, Mr Cowen clearly stated that €1.3bn in cuts would have to be found in public sector pay and pensions. At a meeting with union leaders last Wednesday, Mr Cowen and Mr Lenihan said cuts of 6.85 per cent in the public pay bill would have to be found. Yesterday he was quoted as saying he was prepared to examine whether that reduction could be met through reforms as opposed to pay cuts.He said: "The Government is anxious to work with the public service unions to identify measures, including the restructuring of the delivery of public services, which would enable costs to be reduced without reducing pay rates.

http://www.tribune.ie/business/article/2009/oct/11/jobs-to-be-lost-in-major-capital-spending-cuts-in-/

Capital spending this year was slashed by 19% from €9bn in 2008, while current spending, consisting mostly of pay and pensions, increased 6% to over €55m.

This Government have no idea how to manage the economy. Its advisers either dont understand economics or they arent being listened to in which case they should resign and make this known.

Cutting back Capital expenditure over current it so stupid its unbelieveable. Running a deficit for capital expenditure is a good thing provided the return on the investment is above the interest rate. Running a deficit for current spending is dead money. No return. Now they are already to cutting Capital while increasing Current. :shock:


High current spending has the added bonus of keeping the country uncompetitive at a time when we need to increase employment opportunities. Less workers, less taxpayers.

NewDubliner

Deleted User wrote: »

Cutting back Capital expenditure over current it so stupid its unbelieveable. Running a deficit for capital expenditure is a good thing provided the return on the investment is above the interest rate. Running a deficit for current spending is dead money. No return. Now they are already to cutting Capital while increasing Current. :shock:

You mean that building more roads are more important than clean water, sanitation, safe streets, wholesome food, education, and a healthy population?

NewDubliner

NewDubliner wrote: »

You mean that building more roads are more important than clean water, sanitation, safe streets, wholesome food, education, and a healthy population?

Your putting the horse before the cart. We need to make money before we can spend it.

NewDubliner

Deleted User wrote: »

Your putting the horse before the cart. We need to make money before we can spend it.

Healthy, well-educated people living in a safe environment make money.

Chris_533976

Also some capital projects absolutely have to be pushed. For instance, the Interconnector and Metro North will do huge things for Dublin and make it a lot more attractive for businesses. The approx €6 billion for those two has to be found.

BroomBurner

Deleted User wrote: »

Your putting the horse before the cart. We need to make money before we can spend it.

You've got to speculate to accumulate.