Stimulus Injection: Yes or Nay.

ArtSmart

thoughts?

should we pump prime things with say, a billion or no?

specifically for a particular area or areas (green technology, house insulation, or other.)

(taken from the pension fund)

em where's the poll option?

amacachi

If you've got a spare billion lying around then please, feel free.

ArtSmart

amacachi wrote: »

If you've got a spare billion lying around then please, feel free.

LOL

edited the post.

amacachi

My post stands, there is no money to inject and no-one to lend it to us.
Also the causes of our current problems are in no small part rooted in 6-7 years of constant needless "stimulus", I wouldn't like to see that repeated.

ArtSmart

amacachi wrote: »

My post stands, there is no money to inject and no-one to lend it to us.
Also the causes of our current problems are in no small part rooted in 6-7 years of constant needless "stimulus", I wouldn't like to see that repeated.

gonna put you down for a 'nay'

FreudianSlippers

amacachi wrote: »

My post stands, there is no money to inject and no-one to lend it to us.
Also the causes of our current problems are in no small part rooted in 6-7 years of constant needless "stimulus", I wouldn't like to see that repeated.

What makes you think there is no one to lend to us? There are loads of people that would lend to us, we just are facing interests rates that we don't want to pay for, so we're off the markets for now.

We could easily get a billion or more from many countries in the EU let alone the world.
We could probably negotiate a pretty good interest rate too if we wanted to.

I'm totally for a stimulus of a billion or so. It would definitely help get some people back to work if it was spent on infrastructure.

amacachi

OisinT wrote: »

What makes you think there is no one to lend to us? There are loads of people that would lend to us, we just are facing interests rates that we don't want to pay for, so we're off the markets for now.

We could easily get a billion or more from many countries in the EU let alone the world.
We could probably negotiate a pretty good interest rate too if we wanted to.

I'm totally for a stimulus of a billion or so. It would definitely help get some people back to work if it was spent on infrastructure.

Would you advise people to use sites like Wonga.com? Borrowing at the rates we would have to would be insane, while the EU may give us lower rates they'd do it on condition that it wasn't used to increase any spending, so that option is gone.

andrew

Even if we had the money, there wouldn't be much point in attempting a stimulus here as we are too small an economy. The money spent here would leave the country through imports, which rely heavily upon. This means the multiplier for the stimulus would be too small for it to be justified. So nay.

Sleepy

Our high PS salaries and welfare rates are effectively a stimulus injection...

wilson10

This is how it might work

http://www.independent.ie/opinion/letters/how-the-stimulus-package-really-works-2406920.html

jimmycrackcorm

I'd do a dragons den job on investing and encouraging people to start their own businesses. It would encourage the entrepreneurial spirit and give people a little hope. Better than paying them to sit on the dole especially where people might have really good ideas but no or insufficient financial backing.

ei.sdraob

OisinT wrote: »

What makes you think there is no one to lend to us? There are loads of people that would lend to us, we just are facing interests rates that we don't want to pay for, so we're off the markets for now.

We could easily get a billion or more from many countries in the EU let alone the world.
We could probably negotiate a pretty good interest rate too if we wanted to.

I'm totally for a stimulus of a billion or so. It would definitely help get some people back to work if it was spent on infrastructure.

we have a 22 billion a year stimulus, its called welfare, money directly injected into the pockets of the neediest who spend it locally

ArtSmart

Sleepy wrote: »

Our high PS salaries and welfare rates are effectively a stimulus injection...

i'm talking bout targeted stimulus focused on a narrow area which is labour intensive and spread across the country

i like the house renovation / insulation idea. there are grants, but they could be upped using the billion.

anyway, some sort of positivity would be nice.

even in the (economically incorrect) joke example everyone was happy

ei.sdraob

ArtSmart wrote: »

i'm talking bout targeted stimulus focused on a narrow area which is labour intensive and spread across the country

i like the house renovation / insulation idea. there are grants, but they could be upped using the billion.

anyway, some sort of positivity would be nice.

even in the (economically incorrect) joke example everyone was happy

ok we get a billion, hire lets say 10,000 builders to work for a few months insulating homes
the month or whatever time is up, and were back to square one
and now the billion has to be repaid back + INTEREST

while any savings/returns from better insulation will take decades to pay itself off, oh wait that sounds like what our banks where doing during the boom, borrowing short term and lending to joe for the longterm


bloody keynesians when will they learn that a debt problem cant be fixed with more debt spend on digging ditches and covering them up again

no point in doing a stimulus until costs have fully corrected

costs of rent
costs of labour
costs of insurance
costs of labour
costs of electricity

all overinflated ^^ pumping money that way delays the needed correction and further prolongs our recession and wastes money that needs to be paid back with interest.

Scarab80

ei.sdraob wrote: »

ok we get a billion, hire lets say 10,000 builders to work for a few months insulating homes
the month or whatever time is up, and were back to square one
and now the billion has to be repaid back + INTEREST

while any savings/returns from better insulation will take decades to pay itself off, oh wait that sounds like what our banks where doing during the boom, borrowing short term and lending to joe for the longterm


bloody keynesians when will they learn that a debt problem cant be fixed with more debt spend on digging ditches and covering them up again

We don't have to use debt, we can use the 18bn foreign equity and cash reserves in the pension reserve fund. If insulting homes takes 15 years to pay back - plus a return for the reserve - then that's fine, the pension reserve is not due to drawn down until 2025. Then you have the added saving of paying people to be productive instead of sitting on their arses.

Another use could be to buy back irish bonds at the long end of the yield curve which are currently trading between 70% and 75% of par value, possible 5bn to be made there. Better to crystallise the losses on the bondholders now than have to liquidate to pay for deficit funding.

ArtSmart

ei.sdraob wrote: »

ok we get a billion, hire lets say 10,000 builders to work for a few months insulating homes
the month or whatever time is up, and were back to square one
and now the billion has to be repaid back + INTEREST

while any savings/returns from better insulation will take decades to pay itself off, oh wait that sounds like what our banks where doing during the boom, borrowing short term and lending to joe for the longterm


bloody keynesians when will they learn that a debt problem cant be fixed with more debt spend on digging ditches and covering them up again

em, maybe another look at the multiplier effect might be in order...

(besides, if you dig a ditch and don't cover it up, wont that rot the spade? - oh, right, that's meaningless waffle - sorry.)

Deleted User wrote: »

no point in doing a stimulus until costs have fully corrected

costs of rent
costs of labour
costs of insurance
costs of labour
costs of electricity

all overinflated ^^ pumping money that way delays the needed correction and further prolongs our recession and wastes money that needs to be paid back with interest.

tax returns?

The prob with the building bubble is that it depended on future unit sales (amongst many many more things) had a huge initial investment and was therefore vulnerable if demand dried up quickly.
but a renovation program wouldnt suffer from that.

I do wonder why the multiplier effect is no longer in vogue. any ideas? (from those who know of the multiplier effect preferably)

ei.sdraob

ArtSmart wrote: »

em, maybe another look at the multiplier effect might be in order...

yeh and do tell us what the multiplier effect is in such a small open economy? there was a very nice article over at irisheconomy.ie on the subject, tl:dr the money will leave out of here rather quickly not stimulating us much

We don't have to use debt, we can use the 18bn foreign equity and cash reserves in the pension reserve fund. If insulting homes takes 15 years to pay back - plus a return for the reserve - then that's fine, the pension reserve is not due to drawn down until 2025. Then you have the added saving of paying people to be productive instead of sitting on their arses.

we are paying how many billions a year on pensions already (aint it something like 9 billion for PS pensions alone)? where is the money for this coming from?? yes that's right borrowing

the way the country is going the wont be a pensions reserve left, thats if it wasnt already spend, didnt they invest alot of money into the likes of AIB

ArtSmart

Scarab80 wrote: »

We don't have to use debt, we can use the 18bn foreign equity and cash reserves in the pension reserve fund. If insulting homes takes 15 years to pay back - plus a return for the reserve - then that's fine, the pension reserve is not due to drawn down until 2025. Then you have the added saving of paying people to be productive instead of sitting on their arses.

excellent.

that's where i was going (honest)

so this is the scenario

buildings (incl LL properties, private households private businesses - everything privately owned) are offered higher re-payable grants/ loans to insulate

their ESB bill = 100 pm

now with the insulation the bill = 90pm

the difference saved e10 -they pay back to the gov for the grant/loan (index linked)
plus a little more - (paying off the 'capital' aspect of the grant)

so, the household has lost little or nothing - ultimately gaining a more valuable , better insulated home

the state are getting a premium on the money invested (grants given)

people are given work

tax receipts increase


cool no?

Scarab80

ArtSmart wrote: »

excellent.

that's where i was going (honest)

so this is the scenario

buildings (incl LL properties, private households private businesses - everything privately owned) are offered higher re-payable grants/ loans to insulate

their ESB bill = 100 pm

now with the insulation the bill = 90pm

the difference saved e10 -they pay back to the gov for the grant/loan (index linked)
plus a little more - (paying off the 'capital' aspect of the grant)

so, the household has lost little or nothing - ultimately gaining a more valuable , better insulated home

the state are getting a premium on the money invested (grants given)

people are given work

tax receipts increase


cool no?

some more .....

http://www.boards.ie/vbulletin/showpost.php?p=68863510&postcount=29

ArtSmart

ei.sdraob wrote: »

yeh and do tell us what the multiplier effect is in such a small open economy? there was a very nice article over at irisheconomy.ie on the subject, tl:dr the money will leave out of here rather quickly not stimulating us much

that's why it's be best in narrowly targeted grant form

we are paying how many billions a year on pensions already (aint it something like 9 billion for PS pensions alone)? where is the money for this coming from?? yes that's right borrowing

pension fund

the way the country is going the wont be a pensions reserve left, thats if it wasnt already spend, didnt they invest alot of money into the likes of AIB

not from the pension fund.

unfortunately there is a 'sacred' vibe surrounding the pension fund. but if it were used in a tight focus , spread across a wide customer base, with reasonable re-payments on investment, it would work. (as per the example i gave).

Scarab80

ei.sdraob wrote: »

we are paying how many billions a year on pensions already (aint it something like 9 billion for PS pensions alone)? where is the money for this coming from?? yes that's right borrowing

the way the country is going the wont be a pensions reserve left, thats if it wasnt already spend, didnt they invest alot of money into the likes of AIB

24bn in the pension reserve, 7 in BOI and AIB.

Exactly my point the way the country is going there won't be a pension reserve left, there is no way other countries would allow a default with 24bn in a soverign wealth fund, so either spend it now as a stimulus or a bond buy back or spend it next year on financing the deficit.

To be honest I don't understand what point you are trying to make.

ArtSmart

Scarab80 wrote: »

some more .....

http://www.boards.ie/vbulletin/showpost.php?p=68863510&postcount=29

wrote:

As much as I am loathe to agree with the ICTU and Sinn Fein I think we need to use the Pension Reserve Fund to fund projects in Ireland rather than holding foreign equities and bonds.

- Build transport infrastructure with return earned from future tolls or passenger charges

- Build Smart Grid infrastructure and more interconnectors with return earned as a levy on future energy bills

- Lay fibre in all of the major cities with return earned from future customers

- Provide free insulation and heating upgrades for all houses with return earned as a levy on heating bills between old energy usage and new energy usage.

- Provide a fund for student loan facilities

- Tender for a massive and integrated IT upgrade for the public sector with a focus on reducing administration costs and measuring output. Once implemented get rid of collective bargaining and the grade system and give managers direct responsibility for rewarding employees based on results.

This is of course on top of all of the cuts which are needed.

Also pass legislation which requires the present value of employer pension contributions to be included as part of gross pay (does not mean it is taxable) to ensure transparency in cost comparisons (see Minisiters pension equivalent to a present value contribution of 35,000 a month!), Build the pension reserve back up to reflect real pension obligations.

great minds ....

Scarab80

ArtSmart wrote: »

great minds ....

..... don't end up in a situation where you are forced to consider these options.

ArtSmart

Scarab80 wrote: »

..... don't end up in a situation where you are forced to consider these options.

well we cant let the ship of fools keep steering...

ArtSmart

what? keep blowing my trumpet?
Wll ok.

so, the great thing bout the home /business insulation thingy (esp the home) is that not only will it free up some locked away dosh form the those scared to spend, but it will produce tax returns within months.

(I'd like a small award ceremony please...)

ArtSmart

Amhran Nua wrote: »

Create a network of nationwide enterprise hubs based on the Business Employment Co-operative model which has proven successful in several countries. The idea of this scheme would be to provide an easy transition from inactivity to self employment.

A primary phase might be entrepreneurship educational schemes outside of the FAS framework, aimed at giving people real skills they can use to start their own businesses. This would include basic business accounting discipline.

They remain technically unemployed but develop their business idea under the wing of the BEC. Take experienced but unemployed businesspeople and give them equity in startups in exchange for their knowledge and contacts. At this stage the business plan has been dismantled and put back together again by people who have experience.

If it looks like being a success, they become a "salaried entrepreneur" with the security of a part-time employment contract. In addition, shares in the company can be sold to the public via an online credit card facility, up to say two fifths of the company; if even 1% of the population put €100 a month into those new companies, you'd have a budget of a million euros a week to invest. Open it up to foreign investment in Europe and the US and there is no limit to how high the numbers can run, as well as bringing in capital from other countries.

At a certain point the entrepreneur can take out a loan up to three times the amount of investment and money they put in themselves from the BEC hub credit union, although they remain personally responsible for the loan. Office space and advertising funding might also be supplied prior to this point.

Finally they become a self sufficient business, sharing in the ownership and management of the co-operative, or optionally going it alone.



Legislative and governmental groundwork:
- Create a specific entity beyond a limited company in Irish corporate law, the BEC.
- Change the rules for certain unemployment benefits to fit the BEC model.
- Reduce the complication involved in hiring new people as PAYE employees, which has benefits beyond this concept.
- Create a new classification of debt, enterprise debt, with much more lenient terms than the traditional Irish bankruptcy structure.
- Tax incentives for public investment in the BEC companies, say no taxes at all on profits made from shares in these companies for a period, and make them a tax deductible write off.
- Prior to the company becoming self sufficient, have a reduced tax rate for company income.
- An initial government advertising campaign and funding to provide an incentive for the BECs to be set up, with very limited ongoing involvement. This funding could be taken from the enterprise boards and other services which are no longer required, or whose usefulness is reduced.

ok, another good one. i can feel a party coming...

ArtSmart

ArtSmart wrote: »

excellent.

that's where i was going (honest)

so this is the scenario

buildings (incl LL properties, private households private businesses - everything privately owned) are offered higher re-payable grants/ loans to insulate

their ESB bill = 100 pm

now with the insulation the bill = 90pm

the difference saved e10 -they pay back to the gov for the grant/loan (index linked)
plus a little more - (paying off the 'capital' aspect of the grant)

so, the household has lost little or nothing - ultimately gaining a more valuable , better insulated home

the state are getting a premium on the money invested (grants given)

people are given work

tax receipts increase


cool no?

i hate quoting meself, (really) but a very important aspect of the above is this.

there is money in this country - lots of it.

but there is an accompanying fear of spending it.

most of it is with home owners, most of it with home owners who do not have a major mortgage repayments (yes, i'm guessing, but logically )

so here is a safe, sensible, secure way for them to spend their monies and at a steady, quantified, index-linked rate.

UNLOCK THE DOSH!!!

Another option

Rebate on any renovation work done - householders / businesses get 50% refund over 3-5 years on monies spent on renovation.(from painting to electrical re-wiring etc)

sort of a stimulus in reverse

so some of that inert dosh held by Irish citizens is released into the economy and put to work.

the 50% rebates are paid over 3-5 years, starting a year after application.

construction folk are back in action, but in smaller groups (mostly, bigger ones do businesses) tax revenues increase, properties are improved, work is created.

1/It would have to be 50% to encourage takeup.

2/obviously an eye kept of any possible abuse (which if using registered builders/ tradesmen who issue reciepts at recognised mkt estimates, should be minimal, but would be no more than any similar rebate scheme)