What will Ireland look like when we're back in the black?

Sea Sharp

There seems to be a lot of talk about a default lately, but what people are failing to realise is that a default will mean that Europe will stop lending to us over night. This means the government can only spend money earned through tax and VAT so they'll only be able to afford to spend 60% of what they currently are.

Either way, the 4 year budget thing a ma jig says that in 2015 we'll be spending approx 60% of what we are now (excluding bailout loan repayments and interest.)

Where do you think these inevitable cuts are going to come from? What will the average public sector pay check look like when these cuts are in place.
Food for thought: 60% of 200 per week JSA is 120 per week.:eek:

RichardAnd

At the moment, Ireland brings in about 30billion (I could be wrong here) in tax each year. Now 30 billion euro is alot of money for a state of just 4-5 million souls. Remember, the state was run on less than that just over a decade ago and we were hardly eating grass and living in tents.

So let's assume for a moment that Ireland had no out of the ordinary debt and had it's 30 billion a year to live off. Obviously, the PS wage will and SW will have to come down to about 50% of what they are now, that's a given but what would this mean? Well for starters, less money in the economy means things will be cheaper so yes, people on the scratcher would only have 100 euro a week or so but it would go further. Further, people having less money would make the apreciate it more and they'd probably be less likely to take on debt, only a good thing really.

But of course, I could pratter on for a while about this but there's no need. Ireland is a small country with little in the way of home grown industry or resourses. Emigration has always been part of life here and that, once again, is true. SO in my opinion, going forwards IReland will be as it ever was; a little island where some will simply have to leave to build a life for themselves.

ei.sdraob

jesus you swear it be the end of the world

the country would look like it was back in 2002 when it came to public expenses and welfare, things weren't too bad then at all

RichardAnd

ei.sdraob wrote: »

jesus you swear it be the end of the world

the country would look like it was back in 2002 when it came to public expenses and welfare, things weren't too bad then at all

No, BUT we didn't have unemployment back then like we do now and someone coming out of school or college would probably find a job without too much hassle. Granted, that's still possible today for many.

niallers1

if we lived within our means as a country then Public sector would either need to be reduced by a third or wages reduced by a third..

Realistically, we will just keep borrowing to pay the wages...

Sin1981

In a way, a default would be great thing!
Bring down Social Welfare payments,
Bring down PS pay and pensions
Bring down the overall cost of living (this would also help stop the 2 sectors above from throwing a tantrum)
No more borrowing for stuff we cannot afford
Might mean some more inward investment as we'd be cheaper to employ.

Is'nt it time every single person in this country started to live within their means.:cool:
IMO current or any future governments do not have the gumption or courage to tackle the costs of social welfare, pay bills, or even taking on large semi-states, or large retailers that are still ripping the public off. It might be better if all of this was forced on us.

Duke Leonal Felmet

Annnnnnd already the subject has been lost.

Doubtcha boards!

ei.sdraob

RichardAnd wrote: »

No, BUT we didn't have unemployment back then like we do now and someone coming out of school or college would probably find a job without too much hassle. Granted, that's still possible today for many.

True, but if all those crazy inbalances in the economy where allowed to resolve themselves (banking, property and public expenditure) jobs would start appearing

Permabear

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danbohan

Permabear wrote: »

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which would still be € 44 per week more than the rate in UK

jimmycrackcorm

danbohan wrote: »

which would still be € 44 per week more than the rate in UK

You need to quote and adjusted figure to make the comparison valid.

Suryavarman

Permabear wrote: »

This post had been deleted.

While we're on the subject of adjusting in line with inflation, if the same was done with the minimum wage from when it was introduced it would now equal a mind blowing €7.54!

zig

Sea Sharp wrote: »

There seems to be a lot of talk about a default lately, but what people are failing to realise is that a default will mean that Europe will stop lending to us over night. This means the government can only spend money earned through tax and VAT so they'll only be able to afford to spend 60% of what they currently are.

Either way, the 4 year budget thing a ma jig says that in 2015 we'll be spending approx 60% of what we are now (excluding bailout loan repayments and interest.)

Where do you think these inevitable cuts are going to come from? What will the average public sector pay check look like when these cuts are in place.
Food for thought: 60% of 200 per week JSA is 120 per week.:eek:

Theres no real way of answering the question because to be fair, it is the great unknown. I dont like the use of the 2002 figure because even though statistically our economy will be that size, the real life economy wont.
The differences are too big to make it that simple, there'll be higher unemployment, massive negative equity, much stricter access to credit(bad for small business growth, good for making sure people cant get stupid mortgages), there'll be more PS cuts meaning less high spending from low skilled PS workers(probably a good thing), there'll be no housing boom meaning no builders and services for builders etc. Basically it wont be the same as 2002 even if we have the same stats as 2002.

The default people are talking about wont be an overnight drastic decision where we are suddenly short 40%, it will be a gradual thing where the Europeans will be heavily involved. The only way it would be as drastic as you are describing is if we decided to leave the Euro. I dont think that will happen unless the Euro itself collapses and everyone leaves. That would be so extreme that i really don't think anyone would care about us at that stage. THEN the massive instant cuts would have to be made, but we could also print money to help ease the pain a bit. This could possibly be a good thing or it could be a situation where you try and do a shopping but a loaf of Bread starts costing £5 or £6, and something fancier like Kiwis you can forget about. It would really depend on how the inflation would be handled.

zig

However people tend to forget that if we default we wont be paying money to bondholders/ECB etc, thats alot of debt +interest which can be used for spending. I dont think there has ever been talk of us defaulting on our sovereign debt to be fair.

Pharaoh1

Something that some may have missed is the 3% deficit target that will allegedly be reached by 2014 (or 2015/16 depending on who you believe)

Even if we manage to somehow hit this target it still means that we will be adding billions to our national debt each year with the resultant interest payments.
Of course it can be argued that if we were spending more than the borrowings on capital projects we would at least be running a current surplus.

Still piling up the debt though.

hatrickpatrick

Whatever our next Celtic Tiger turns out to be, I really hope it will be something that doesn't leave such hideous scars on the landscape and the environment. Celtic Tiger I, the technology boom in the 90s, was innocent of this, mainly. Celtic Tiger II not only wrecked the economy but it's also left a lot of absolutely obscenely ugly apartment blocks and "post modern architecture" in its wake which will remain as hideous reminders for a long time to come.

Whatever the next boom is, I hope it's something mobile and exportable, so that whatever we end up making, it isn't something which involves utterly defacing the beautiful island we're so lucky to live on.

Spudmonkey

hatrickpatrick wrote: »

Whatever the next boom is, I hope it's something mobile and exportable, so that whatever we end up making, it isn't something which involves utterly defacing the beautiful island we're so lucky to live on.

We don't need any more booms but something sustainable. There will be a lot of people with their eyes open to potential booms in future who will be wary of getting burnt again.

gigino

hatrickpatrick wrote: »

Whatever our next Celtic Tiger turns out to be, I really hope it will be something that doesn't leave such hideous scars on the landscape and the environment. Celtic Tiger I, the technology boom in the 90s, was innocent of this, mainly. Celtic Tiger II not only wrecked the economy but it's also left a lot of absolutely obscenely ugly apartment blocks and "post modern architecture" in its wake which will remain as hideous reminders for a long time to come.

Whatever the next boom is, I hope it's something mobile and exportable, so that whatever we end up making, it isn't something which involves utterly defacing the beautiful island we're so lucky to live on.

+1. There are ugly "developments" ( ghost estates , empty retail parks etc ) miles from major towns in Ireland which should be bulldozed / returned to farmland or forest.

Chuchoter

We won't ever be in the black again, if we were to even try to get there within our lifetimes, it would be like an Eastern Block country here.

Duke Leonal Felmet

crayolastereo wrote: »

We won't ever be in the black again, if we were to even try to get there within our lifetimes, it would be like an Eastern Block country here.

You hear that folks? NEVER.

gigino

Duke Leonal Felmet wrote: »

You hear that folks? NEVER.

As a country we are not trying to get back in to the black.

We are probably the most bankrupt country in the world and yet we still have some of the highest , if not the highest paid public servants, social welfare / lunemployed and pensioners in the world.

Germany just recently ( last year ) paid off the last of the debt it owed as a result of WW1. Honourable people the Germans.

In 90 years time our great-grandchildren will still be paying for the handouts our government is squandering today. For example, to put things in perspective, the tax free "gratuity" many of our retiring public servants are getting today ( eg the average Garda retiring age 49, after 30 years service ) , in addition to their pension, is enough to buy almost two fine 2-bedroom tax incentive apartments in a major town on the lovely river Shannon. The apartments are 55 k each, the 18 months tax free lump sum all public servents get on completion of service is on average not far off double that. This is in addition to the pension equivalent to 50% of FINISHING salary.



No wonder the country is ******.

Duke Leonal Felmet

gigino wrote: »

No wonder the country is ******.

In at number 2 for the most overused statement of 2010/11 is...

maninasia

hatrickpatrick wrote: »

Whatever our next Celtic Tiger turns out to be, I really hope it will be something that doesn't leave such hideous scars on the landscape and the environment. Celtic Tiger I, the technology boom in the 90s, was innocent of this, mainly. Celtic Tiger II not only wrecked the economy but it's also left a lot of absolutely obscenely ugly apartment blocks and "post modern architecture" in its wake which will remain as hideous reminders for a long time to come.

Whatever the next boom is, I hope it's something mobile and exportable, so that whatever we end up making, it isn't something which involves utterly defacing the beautiful island we're so lucky to live on.

I think the tiger certainly helped to improve parts of Dublin and perhaps other cities and towns.

djpbarry

crayolastereo wrote: »

We won't ever be in the black again, if we were to even try to get there within our lifetimes, it would be like an Eastern Block country here.

First of all, several "Eastern Block" countries, such as Czech Republic and Slovenia for example, have infrastructures that could be considered superior to Ireland's. Secondly, making the necessary cutbacks while maintaining a high standard of living is unquestionably possible - the problem is the inevitable public opposition to the cuts.

hatrickpatrick

maninasia wrote: »

I think the tiger certainly helped to improve parts of Dublin and perhaps other cities and towns.

I'm not suggesting the building boom was all bad, but you must admit it has certainly left some God-awful monstrosities in its wake. Like that massive, weird metal/wood hybird block of sh!te which was erected behind Vincent's, rendering a drive home from town through Booterstown an overshadowed and dark experience...



I mean seriously, what the hell is that supposed to be?!

maninasia

Looks kind of funky to me . Seriously at least half of Dublin was a run down kip before the boom..now look at the docklands, city centre, Phoenix Park, Smithfield area and tell me it hasn't been spruced up a bit? (and yes there is still more work to do..look at Parnell Sq up to Phibsboro for example.

The main problem (IMO) is that they overbuilt in some areas and should have allowed more high rise in cetain city centre areas to counteract urban sprawl.

RichardAnd

maninasia wrote: »

Looks kind of funky to me . Seriously at least half of Dublin was a run down kip before the boom..now look at the docklands, city centre, Phoenix Park, Smithfield area and tell me it hasn't been spruced up a bit? (and yes there is still more work to do..look at Parnell Sq up to Phibsboro for example.

The main problem (IMO) is that they overbuilt in some areas and should have allowed more high rise in cetain city centre areas to counteract urban sprawl.

Whilst this is true what you must remember is that modern architecture doesn't age well. Buildings put up in the 70s might have looked fine back now but now, they look absolutly dire. For a fine example of this, go an have a look at the Land Registry offices in Chancery street, they basically plopped a hedious lump of concrete on top of a nice old building.

There are buildings in dublin that have been there for hundreds of years and still look great but sadly, proper craftsmanship and building things to last was one of the many things we lost in the boom. In 30 years time, those steel and glass cages are going to look very dated and very run down.