Defying the Laws of Economics - would you jump from a plane to defy gravity

CDfm

Maybe I have been sleeping during this Election but I havent heard anyone saying we are going to spend Billions on job creation.

We need cuts and Ronan Lyons in his blog gives some good pointers

http://www.ronanlyons.com/2010/11/02/where-should-ireland-cut-its-public-spending-thoughts-for-budget-2011-ii/

But where is the kick ass right this is what we are going to do to create employment and promote growth.

I hear soundbites but I dont hear balanced clear thought. I hear crap being spouted about creating a development bank and siphoning money of here and there but no real credible thought.

By definition all tax revenue is generated from the private sector -in some way or other. The euro that a public sector worker pays his tax & prsi from could have started its life as a cow sold at a Mart in Trim Co Meath or a rewound electric motor somewhere in the County Waterford or assembling a computer in Kildare.

So essentially our taxes come from making things and providing services other people want to buy. So what are we voting for to do for that.

Without the EU/IMF bailout there is a huge risk that the money to pay public service wages etc would have run out.

So the bailout out is a deferal of the inevitable if we do not focus on economic growth. That means industry -making goods that people want to buy-and where is that going to come from.

ei.sdraob

:eek:

i didnt know we where so far out of whack when it came to health, whats scary is that we have one of the youngest populations too with such high spending, something is seriously wrong somewhere in our health sector

CDfm

absolutely - we are an economic basket case.

one of the reasons our EU partners are so pissed of with us has been our approach to public service pay.

this fuelled the housing boom as did very lax banking regulation with an orgy of borrowing.

stamp duty was paid from borrowed money as was the VAT , CAT etc.

Imagine a conversation

Secretary at the Dept of Finance

Hello Hans - I am calling about the money for economic growth

ECB BANK GUY

(hysterical laughter)

Its in your pay cheque

DOF

But thats my pay

ECB

Stop whingeing Paddy you get paid more than me

(call ends)

johnnyskeleton

CDfm wrote: »

But where is the kick ass right this is what we are going to do to create employment and promote growth.

Face it. Irish wages, rents, rates, utilities, red tape and other expenses, together with our poor infrastructure and our mistargeted education system, make Ireland a fairly poor place to locate labour intensive work. It is a great place to base your billion dollar transfer pricing initiative, and it is a great place to set up a subsidised call centre, but outside of that, it isn't that great.

So there is little that can be done at the moment to create employment except cuts. I think the obsession with growth is also a poor policy to adopt, but even on that it is difficult to see how we can grow when we are already overbloated.

CDfm wrote: »

By definition all tax revenue is generated from the private sector -in some way or other. The euro that a public sector worker pays his tax & prsi from could have started its life as a cow sold at a Mart in Trim Co Meath or a rewound electric motor somewhere in the County Waterford or assembling a computer in Kildare.

No its not. Tax revenue is generated from many different things. Semi state companies who sell their products abroad and pay tax on these products and on profits are public sector, but still generate tax revenue.

CDfm wrote: »

So essentially our taxes come from making things and providing services other people want to buy. So what are we voting for to do for that.

That's more like it. But I don't get your point. On the one hand you maintain that the private sector is the main generator of wealth, but on the other you want the state to do something to generate wealth. If, by your thesis, the state cannot create wealth, why do you want the state to have a policy on creating wealth that isn't "reduce costs to encourage competition"?

CDfm

johnnyskeleton wrote: »

Face it. Irish wages, rents, rates, utilities, red tape and other expenses, together with our poor infrastructure and our mistargeted education system, make Ireland a fairly poor place to locate labour intensive work. It is a great place to base your billion dollar transfer pricing initiative, and it is a great place to set up a subsidised call centre, but outside of that, it isn't that great.

No it isn't a great place to locate a business and we need to get out of thinking of ourselves as world class.

So there is little that can be done at the moment to create employment except cuts. I think the obsession with growth is also a poor policy to adopt, but even on that it is difficult to see how we can grow when we are already overbloated.

But we need to go for consistant growth.

Lack of an indigenous capital base means that we have not fostered a culture in the 90 years since independence.

Now if we could get a hundred thousand off the dole queues it would not be a bad thing.

No its not. Tax revenue is generated from many different things. Semi state companies who sell their products abroad and pay tax on these products and on profits are public sector, but still generate tax revenue.



That's more like it. But I don't get your point. On the one hand you maintain that the private sector is the main generator of wealth, but on the other you want the state to do something to generate wealth. If, by your thesis, the state cannot create wealth, why do you want the state to have a policy on creating wealth that isn't "reduce costs to encourage competition"?

Accepted - but the Semi State Sector as a model was there to do what private enterprise could not -at that time. Take Bord na Mona -it was born out of a co-op idea AFAIK. I doubt if you could do a Semi State Structure now within the EU.

We need to have short, medium and long term goals.

The short term result with the Celtic Tiger was the wealth that was created went into a bubble that burst.

We do need to say right 450,000 unemployed and some of the jobs will be dirty low paying jobs.

450,000 is an awful lot of dole cheques, add pensioners and unmarried mothers to that and the scale is huge.

CDfm

I met up with some marketing types this evening and the articles that were being talked about were

Vanity Fairs " When Irish Eyes Are Crying "

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103

The Economist - Meltdown

http://www.economist.com/blogs/newsbook/2011/01/irelands_political_chaos

And

The Lessons of Ireland

http://www.economist.com/blogs/democracyinamerica/2011/01/austerity_measures

An interesting comment often made by one of the guys was how there had been a huge difference between the real economy & the boom economy during the Celtic Tiger.

The Vanity Fair article is an important one because it shows us what other people think of us. An outsiders view -not how we see ourselves.

Short term the price of gold, silver, and oil are up and these are a safe haven for speculators in turbulent political times.

When Irish Eyes Are Crying
First Iceland. Then Greece. Now Ireland, which headed for bankruptcy with its own mysterious logic. In 2000, suddenly among the richest people in Europe, the Irish decided to buy their country—from one another. After which their banks and government really screwed them. So where’s the rage?

So where is the rage.