IMF says, "Not good enough lads"...

HellFireClub

http://www.rte.ie/news/2011/0412/imf-business.html

Apparently we are not cutting the mustard with the deficit at the moment...

The International Monetary Fund is forecasting slippage in the Government's deficit target for this year. In a new report on fiscal sustainability, the International Monetary Fund says Ireland's fiscal deficit this year will be 10.8%, an increase of 0.8% over the Government's medium term plan.
The IMF also says the Government deficit will not reach the 3% target level in either 2015 as in the new Programme for Government or 2016, when it is forecast to be 3.8%.
The report criticises the US and Japan for not engaging in fiscal tightening, but says Europe is making good progress. Only Japan, the US and Ireland will have budget deficits in excess of 10% this year, out of 59 advanced and emerging economies surveyed by the IMF.
The Fund warns that debt ratios are still rising in most advanced economies, and government borrowing needs are at historic highs.
It says the average government gross debt ratio is projected to breach 100% of GDP for the first time since the aftermath of World War 2, and urges all countries, but especially the US, to do more to reduce debt and deficit levels.

RichardAnd

I saw that article earlier. I think we can hazard a guess as to the contents of the so called "jobs budget".

macannrb

I think labour's idea of pushing out the plan to bring the deficit under control is firmly gone.

Whatever the IMF have said to them on their visit here, was not pleasant, and something along the lines of, you dont bring down your expenditure, you dont get any more cash

It would certainly explain why Howlin, Rabbitte and Quinn have come out making noise about the possibility of more cuts, and i saw today the idea of Croke Park two

I think we have moved from denial to fear



So we have a long way to do

MagicSean

I'm tired of bending over for the German-Franco banking sector. At this rate I'll take a big paycut and default rather than listen to them pontificate about sensible economy while they mess with policies to support their own needs.

th3 s1aught3r

HellFireClub wrote: »

http://www.rte.ie/news/2011/0412/imf-business.html

Apparently we are not cutting the mustard with the deficit at the moment...

.

Theres no 'apparently' about it

sarumite

k_mac wrote: »

I'm tired of bending over for the German-Franco banking sector. At this rate I'll take a big paycut and default rather than listen to them pontificate about sensible economy while they mess with policies to support their own needs.

They are an easy (and at time legitimate) target to complain about, though our inability to get our deficit in order is our own problem. I am tired of people conflating deficits with debts.

sheesh

macannrb wrote: »

I think labour's idea of pushing out the plan to bring the deficit under control is firmly gone.

Whatever the IMF have said to them on their visit here, was not pleasant, and something along the lines of, you dont bring down your expenditure, you dont get any more cash

It would certainly explain why Howlin, Rabbitte and Quinn have come out making noise about the possibility of more cuts, and i saw today the idea of Croke Park two

I think we have moved from denial to fear



So we have a long way to do

we're only at fear? agh! I was hoping for despondency!!

honestly I think we have a lot longer to go on this cycle there is so much money to pay back right now.

Jaysoose

If this finally brings an end to the continued ignoring of our financial problems then it can only be a good thing. How much time has been wasted already with sectors burying their collective heads in the sand?

macannrb

Jaysoose wrote: »

If this finally brings an end to the continued ignoring of our financial problems then it can only be a good thing. How much time has been wasted already with sectors burying their collective heads in the sand?

I only hope its not too late

We should have started trying to make things better in 2008 as the property cash started, not 3 or 4 years later

2k jobs to go in AIB? surely those at the top in 2008 new that there was no return in sight to the good old days. Mortgage lending in Ireland had been falling for the 2 years previous to that.

In 2007 our national debt was 25bn now its 96bn, plus all the off balance sheet debt

dan_d

macannrb wrote: »

I think labour's idea of pushing out the plan to bring the deficit under control is firmly gone.

Whatever the IMF have said to them on their visit here, was not pleasant, and something along the lines of, you dont bring down your expenditure, you dont get any more cash

It would certainly explain why Howlin, Rabbitte and Quinn have come out making noise about the possibility of more cuts, and i saw today the idea of Croke Park two

I think we have moved from denial to fear

So we have a long way to do

Excellent graphic. Can also be used to describe my feelings about the job hunt. I cycle between denial and depression daily. Don't see optimism ahead any time soon...

Anyway. Enough about me. Some interesting stories going around today. The IMF's comments are justified. We haven't done enough.We did a bit to appease onlookers initially. Then we buried our heads in the sand for quite some time. With any look, there's a few people pulling their heads out of the sand and realising the problem hasn't gone away now.

We should have done far, far more in 2008. We just didn't want to hear it then. Or in 2009. Or in 2010....

We've a long way to go yet. Still.

Scofflaw

dan_d wrote: »

Excellent graphic. Can also be used to describe my feelings about the job hunt. I cycle between denial and depression daily. Don't see optimism ahead any time soon...

Anyway. Enough about me. Some interesting stories going around today. The IMF's comments are justified. We haven't done enough.We did a bit to appease onlookers initially. Then we buried our heads in the sand for quite some time. With any look, there's a few people pulling their heads out of the sand and realising the problem hasn't gone away now.

We should have done far, far more in 2008. We just didn't want to hear it then. Or in 2009. Or in 2010....

We've a long way to go yet. Still.

Now there I admit I suspect Fianna Fáil of having left some slack for Fine Gael in the spirit of "feck them". Mind you, you'd wonder whether if Fianna Fáil hadn't taken a more robust approach - actually restructuring the banks, actually making the cuts - they would have been quite as unpopular.

cordially,
Scofflaw

dan_d

I'm a bit confused by how your post is written for some reason but I feel I agree with it, Scofflaw...!:o

im invisible

macannrb wrote: »

I think we have moved from denial to fear

[pic]

looks like a typical friday to tuesday for me

Delancey

Comments in the last 2 days by Pat Rabbitte and Enda Kenny could be interpreted as preparing the ground for a repudiation of Croke Park though it may well prove to be empty threats.
I would like to see the agreement go - we cannot afford it and it seems to have delivered sweet F... All by way of savings.

later12

macannrb wrote: »

So we have a long way to do

One-size fits all graphics like that, with no real reference to our situation and no empirical economic or scientific basis really piss me off.

No offence to you macannrb, I know you're simply illustrating a point, but the above is not the inevitable track that all recessions, credit events, equity crashes or sovereign spending/funding mismatches must inevitably take. They can be double dip, triple dip, stagnant, bell curve, the shape of the radical, and so on. Similiarly, reasonably vague terms and distinctions between those terms, like 'capitulation', 'desperation' and 'despondency' could be repeated many times or be interchangeable and have no real place in providing an updated assessment of the present situation, whose explanation must be more bespoke than simply an 'off the shelf' one-size-fits-all graphic.

kuntboy

The graph isn't meant literally it's sort of tongue in cheek.

ICE HOUSE

IMF says, "Not good enough lads"...

Seriously did any of you think for one minute this was actually going to work.....It was doomed from the start.
Were finished. End of.

Mister men

ICE HOUSE wrote: »

IMF says, "Not good enough lads"...

Seriously did any of you think for one minute this was actually going to work.....It was doomed from the start.
Were finished. End of.

Thing is most lemmings out there think knocking a few quid off social welfare here and a few quid off PS pay there will make a difference, it wont. They need to be slashed big time. Social by 40% and PS pay by 30%-35% across the board. And that's just for starters without getting into education,health job cuts etc... It's simply amazing that 3 years into this crisis people are in such stark delusion about where we are as a country. Even house prices are remaining high when they should be dropping like a brick in a swimming pool.

average_runner

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?

2. Where do we get the money to keep a cash flow in all our banks?

3. Who will give us the money curenntly at a rate of 1%


Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

macannrb

average_runner wrote: »

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?

2. Where do we get the money to keep a cash flow in all our banks?

3. Who will give us the money curenntly at a rate of 1%


Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

Those are the exact reasons that the government will try to do anything to stop default. We go on about the who will fund the government, but the funding gap is only 20bn or so

The gap in the Banks that the ECB is filling is over 100bn in overnight funding

Even Irish people won't put money in Irish banks

syklops

Mister men wrote: »

Thing is most lemmings out there think knocking a few quid off social welfare here and a few quid off PS pay there will make a difference, it wont. They need to be slashed big time. Social by 40% and PS pay by 30%-35% across the board. And that's just for starters without getting into education,health job cuts etc... It's simply amazing that 3 years into this crisis people are in such stark delusion about where we are as a country. Even house prices are remaining high when they should be dropping like a brick in a swimming pool.

And get rid of some of the numerous quangos. The food safety authority, the road safety authority, Irish water safety, Should all be formed into one smaller group. Think of the savings on headed paper alone!

danbohan

average_runner wrote: »

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?

2. Where do we get the money to keep a cash flow in all our banks?

3. Who will give us the money curenntly at a rate of 1%


Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

think of the consequences before we do something!!

valid points all ,
but what are the consequences of not defaulting ? pretty grim too, we are a rabbit on a 12 lane highway

average_runner

danbohan wrote: »

think of the consequences before we do something!!

valid points all ,
but what are the consequences of not defaulting ? pretty grim too, we are a rabbit on a 12 lane highway

Agree but people need to have alternative valid plan before saying we just default and not know what the actual knock on effects are and more than likely worst than our current effects!!

Cookie_Monster

average_runner wrote: »

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?

2. Where do we get the money to keep a cash flow in all our banks?

3. Who will give us the money curenntly at a rate of 1%


Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

1 & 3: imagine we actually ran slight budget surpluses instead of massive deficits...

2: banks problem, not ours.

now in the real world of Ireland 2011 neither are possible anymore but one can dream

Atilathehun

We will wake up one Monday morning, to hear that Ireland Inc, has restructured (defaulted), on its debt. We will be told, that a portion of all deposits in the banks has been seized, by the government, and all private pension funds seized in their entirely.
PS salaries reduced immediatley by 50%. Social welfare likewise.

Kenny and Gilmore will be in government.
FF will sweep back to power.

Life will go on.

average_runner

Cookie_Monster wrote: »

1 & 3: imagine we actually ran slight budget surpluses instead of massive deficits...

2: banks problem, not ours.

now in the real world of Ireland 2011 neither are possible anymore but one can dream

Banks problem is our problem, if we wake up in the morning and no cash in the atm, no transactions can occur and country comes to a standstill.

average_runner

Atilathehun wrote: »

We will wake up one Monday morning, to hear that Ireland Inc, has restructured (defaulted), on its debt. We will be told, that a portion of all deposits in the banks has been seized, by the government, and all private pension funds seized in their entirely.
PS salaries reduced immediatley by 50%. Social welfare likewise.

Kenny and Gilmore will be in government.
FF will sweep back to power.

Life will go on.

So cutting PS is going to sort our problems?

Alot of public sector will then end up defaulting on their mortages, health
service will totally fall apart as alot of staff will jsut head straight to uk as salary difference is not 50%, Gardai will just put down tools.

It be mayhem and we still have a major debt problem and pension problem.

Cutting Social Welfare needs to be done in a proper manner not just slashed!

And yet you still fail to answer the question where do we get money from after defaulting on it and at an interest rate better than what we currently have????

Atilathehun

average_runner wrote: »

So cutting PS is going to sort our problems?

Alot of public sector will then end up defaulting on their mortages, health
service will totally fall apart as alot of staff will jsut head straight to uk as salary difference is not 50%, Gardai will just put down tools.

It be mayhem and we still have a major debt problem and pension problem.

Cutting Social Welfare needs to be done in a proper manner not just slashed!

And yet you still fail to answer the question where do we get money from after defaulting on it and at an interest rate better than what we currently have????

I'm not suggesting cutting either PS pay or SW by a big amount is the answer.
I'm just fast forwarding the video, to the point in time, where everybody including the ECB and the EU and the IMF, and our own government own up to the simple fact, that our debt burden is completely unsustainable.

We cannot get out of the hole we are in unless the economy can grow at a big number. Say 6% or more. We are now projected to grow this year at 0.5%. We cannot borrow from the capital markets at any price. We have been given finance by IMF / EU at almost 6% ................... it's simple logic ................. we are headed for a head on crash.
If that was not enough, there is another juggernought hurtling down the motorway against us, at high speed, in the form of ECB rising interest rates.
There will HAVE to be some sort of restructuring of the bank debt element of our severign debt. It has to happen. There is no other way. We will not be able to pay it back.

The only question is, what form that restructure takes, and what the effects will be on Joe Citizen.

dan_d

average_runner wrote: »

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?

2. Where do we get the money to keep a cash flow in all our banks?

3. Who will give us the money curenntly at a rate of 1%


Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

Was anyone listening to the Last Word yesterday evening??

Michael Noonan's partner in the Dept of Finance - Brian Hayes, is it? - was on. I only came in halfway through the interview. He asked the exact same questions as average_runner. I've listened a few times to Brian Lenihan defending himself and his actions on this show, and trying to explain the consequences of what might happen if we defaulted, etc. I thought this guy's method was far more effective. He literally said (and I'm paraphrasing slightly) "With all due respect to the economists who keep preaching default - can they show me where we will get the money from to keep the country running if we do default? None of them have done that. We are basically being kept alive by the money we are borrowing from Europe, at a rate of 1% - there is nowhere else we can get that rate. If there is, show it to me".

When asked did he know what would happen if we did default, he basically said...(paraphrasing again)
"I don't know.... the consequences of a default. Many other countries have defaulted - none of them had an open economy like Ireland's which was export based and part of a single currency. If there are any out there who are like that and did default, then let's look at them.Let's compare. Let's see what could happen"

His attitude was "Bring it on"...rather than "no, but listen while I try and explain". And it was quite effective.

I think - and have thought this for a while - that people just don't have a notion what would happen if we did default. They like the sound of it, because it's a "f&*k you" to the big bad Europeans who are making us behave ourselves. And it screws the banks over, and we all hate them. It's revenge, basically. But the only people who would hurt out of it would be us. Ireland would close for business. And there's no point comparing to Argentina, and Iceland, and all the other countries. It's not comparable. It's like comparing us to the UK for SW rates and PS pay. It's not a comparable situation.

We do however need cuts all over the place. I don't think we can go in and just slice 50% of every single thing in the public sector, but we certainly cut take a few more increments, preferably over 2-3 years, and preferably while avoiding the lower pay scales.(say 35k and less). We could (and probably will) raise taxes another percent or 2. But I doubt they can go much more than that, for obvious reasons. The public service HAS to be completely restructured. If the unions are claiming that a huge amount of money has already been saved in the last year, and the changes aren't obvious (to me anyway), then I can only imagine how much would be saved by changes in efficiencies that could be seen by the public aswell.

We've had it way too good for way too long, and we've ignored mounting problems in the last 2 years. It's coming back to bite us ALL in the a&* big time.

(There might be a link to the Today FM show on their website, for a podcast, but I couldn't find one..)

COYW

Atilathehun wrote: »

We will wake up one Monday morning, to hear that Ireland Inc, has restructured (defaulted), on its debt. We will be told, that a portion of all deposits in the banks has been seized, by the government, and all private pension funds seized in their entirely.
PS salaries reduced immediatley by 50%. Social welfare likewise.

Kenny and Gilmore will be in government.
FF will sweep back to power.

Life will go on.

I don't know if this is tongue-in-cheek but I suspect that you wont be too far off the final outcome with this. I think the above will be the picture in Ireland come January 2014.

Amhran Nua

dan_d wrote: »

I think - and have thought this for a while - that people just don't have a notion what would happen if we did default. They like the sound of it, because it's a "f&*k you" to the big bad Europeans who are making us behave ourselves. And it screws the banks over, and we all hate them. It's revenge, basically.

Its a bit more than mere vindictiveness I'm afraid, people rightly don't want to pay someone else's gambling debts. That the ECB has taken over a lot of those debts is the ECB's lookout, and in fairness the ECB isn't looking out for us.

The effects of default are broadly and arguably that we won't be able to borrow any more money for at least a decade. I would say that default on those portions which were not rightly the state's problem would have much less of an effect on our credit worthiness.

This becomes less of a problem if we don't need to borrow money to keep the lights on. Arguments against cutting the defict savagely include the likes of Brian Lucey who point out that we have already made readjustments larger than almost any country on earth in this recession, and that you lose GDP as public sector wages and welfare drop.

Basically this means that taxes taken from the economy are put back in by public sector spending, which also creates the multiplier effect. However the fact remains that a large amount of public sector spending goes towards sheltered professions like legal and medical, and I would say the bulk of the rest is shunted straight back into the banks as "investment" properties get paid off. None of which is productive. Not to mention that if these taxes weren't taken out of the economy they would have the same multiplier effect anyway.

So here's a question: How much does the GDP shrink as you cut public expenditure? I've seen figures of a 3:4 ratio of cuts to drops over three years, but I don't really think that represents reality, for the abovementioned reasons.

Another side effect is that we'd probably have to recapitalise the banks further as mortgage defaults increase - however first of all this is only neccessary if we want to maintain the banks as functional entities (we don't, we only want to protect economically vital agents like retail deposits) and it's only neccessary if we don't intend to give guillotine-like haircuts to the investments of those who gambled and lost.

It would need careful timing and wide cooperation from the public sector, but I think that the neccessary cuts in the deficit could be made in a timely fashion, while scaling back repayments of debts which are not our own.

Really the whole shambles can be seen through the lens of what's happening to AIB at the moment. Having received billions in state support and being largely state owned, they are now talking about debt forgiveness for some, while out of the other sides of their mouths they say they expect to be able to repay the capital influx with interest. This is not of course debt forgiveness, but rather you and I taking on someone else's mortgage. In a similar manner, Labour wants to extend the pain on the back of higher payments for taxpayers to protect their own constituency, while ultimately the end result is the same, only more expensive.

The banks and specuvestors gambled and lost, now they are throwing their toys out of the pram in a tantrum, trying to make citizens of various countries cover their losses, aided and abetted by the garish pronouncements of provincial politicans across Europe trying to save their political careers and the wagon circling of Trichet, himself no stranger to banking scandals. I don't think that's acceptable.

Jaysoose

average_runner wrote: »

For the people saying we should default can you answer these questions and non of the experts that are saying we should default can answer either:

1. Where do we get the money to keep the country running after we default?


2. Where do we get the money to keep a cash flow in all our banks?


3. Who will give us the money curenntly at a rate of 1%



Thought so, ye cant answer it but yet we say we should default without thinking of the consequences, so once in our lives lets think of the consequences before we do something!!

Nice populist soapboxery there.

1. at this rate we are defaulting anyway, we are borrowing at 6% and growing at best .5% per year so there is no way we can afford to service the debt in its current form so default is inevitable. The money to run this country is gone the previous goverment decided to do nothing for 3 years and effectivey flushed the country down the toilet.

2. What cash flow? the banks are taking taxpayers money in and are NOT lending to anybody so there is no cash flow to speak of except into the black hole that is bank debts.

3. Where are you getting 1% from?

Its to late to call for foresight in this almighty mess as the horse has already bolted, we are paying to much money for our public service, we are paying to much on the interest for the bailout and we are not growing quickly enough...ALL of these factors are ensuring that default is a certainty.

The time to have foresight was 3-4 years ago but unfortunately the reality of the situation was ignored by all the people in a position to do anything about it. For gods sake we still havent addressed the public service wage bill due to this insanity of the croke park agreement.

Amhran Nua

Another question: who here would mind paying a once-off, one year sharp tax increase to build up a war chest to deal with the problems created by default and deficit reductions? I wouldn't mind, as long as it meant closing the book on these problems once and for all, and we didn't have to cover the gambling debts of speculators. Might be an implement worth considering, one which might even survive a referendum.

Jaysoose

Amhran Nua wrote: »

Another question: who here would mind paying a once-off, one year sharp tax increase to build up a war chest to deal with the problems created by default and deficit reductions? I wouldn't mind, as long as it meant closing the book on these problems once and for all, and we didn't have to cover the gambling debts of speculators. Might be an implement worth considering, one which might even survive a referendum.

An interesting concept alright, it would have to clear and transparent with defined results...something which unfortunately the irish political classes have no grasp of.

mickoneill30

Amhran Nua wrote: »

Might be an implement worth considering, one which might even survive a referendum.

Ah but the

unions,
vulnerable,
single income families,
families with kids,
people with large mortgages,
old people,
public sector,
people with low incomes,
students,
people complaining that they didn't cause the problem so why should they pay group,
Joeeeeee Duffy brigade
(insert your group here)

lobby groups would be out in force to make sure their group wasn't affected by this tax.

Jaysoose

mickoneill30 wrote: »

Ah but the unions, vulnerable, single income families, families with kids, people with large mortgages, old people, public sector, people with low incomes, students, people complaining that they didn't cause the problem so why should they pay group, (insert your group here) lobby groups would be out in force to make sure their group wasn't affected by this tax.

Sadly this is true, the sooner the vested interests and the "wheres my nama's" wake up and realise whats going on the better. Personal responsibility for financial choices in this country is seen as a bad thing and people are hoping that this whole mess goes away..unfortunately it isnt going anywhere.

Amhran Nua

mickoneill30 wrote: »

Ah but the unions, vulnerable, single income families, families with kids, people with large mortgages, old people, public sector, people with low incomes, students, people complaining that they didn't cause the problem so why should they pay group, (insert your group here) lobby groups would be out in force to make sure their group wasn't affected by this tax.

That's why you'd probably need a referendum on it. Maybe. I'd be alright with waving goodbye to a decent lump of my annual disposable if it meant seeing the back of these bastards, but you'd still need the deficit cuts. Mind you when you think about it, if we start giving a short back and sides to upstream lenders there exists the real possibility of being able to reduce mortgage amounts on the backs of none other than the very people foolish enough to lend the money in the first place, which would be alright.

Thats a hell of a carrot.

Tipp Man

Amhran Nua wrote: »

Another question: who here would mind paying a once-off, one year sharp tax increase to build up a war chest to deal with the problems created by default and deficit reductions? I wouldn't mind, as long as it meant closing the book on these problems once and for all, and we didn't have to cover the gambling debts of speculators. Might be an implement worth considering, one which might even survive a referendum.

Sounds like a nice idea but in reality a few people would pay a load more tax and the "war chest" the government would receive would be a few hundred million if they were lucky. We need to think billions

Expenditure has to be cut dramatically

Atilathehun

COYW wrote: »

I don't know if this is tongue-in-cheek but I suspect that you wont be too far off the final outcome with this. I think the above will be the picture in Ireland come January 2014.

Read this http://www.safehaven.com/article/19231/american-retirement-funds-at-serious-risk-of-being-seized

American Retirement Funds at Serious Risk of Being Seized

The news of Hungary effectively seizing private pension fund assets to pay for the debt obligations of the state last week should come as yet another reminder of the urgent need to get tax-sheltered retirement savings away from the clutches of the state before it's too late. Hungary is just the latest country to decide that it's citizens retirement savings are the property of the state.
The last major country to use similar tactics was Argentina who confiscated about $3.2 billion of pension savings in 2001 before the country stopped servicing its debt and then nationalized the $24 billion industry two years ago to compensate for falling tax revenue after a 2005 debt restructuring.
On November 24th the Hungarian government gave its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension. Economy Minister Gyorgy Matolcsy announced the policy, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.
Americans who think "this can't happen here" may want to think again.
In September of this year the US Treasury investigated the possibility of requiring retirement funds to hold a percentage of government securities in their investment portfolio. That, in effect, would be a nationalization of 401ks and IRAs.
And don't think for a second that the US is in better financial shape than Hungary.
The moves in Hungary were prompted by large annual budget deficits and a large debt to GDP ratio. So, let's compare Hungary's deficit and debt to that of the US.
First, a warning: Accept the US governments own financial statistics at your own risk. Federal debt, unemployment and CPI, just to name a few, bear no resemblance to reality.
The federal debt, as proclaimed by the US government is stated to be $13.8 trillion but just subjecting federal government numbers to Generally Accepted Accounting Principles (GAAP) shows a true debt, if accounted for properly, of $71 trillion as of 2009.

Amhran Nua

Tipp Man wrote: »

Sounds like a nice idea but in reality a few people would pay a load more tax and the "war chest" the government would receive would be a few hundred million if they were lucky. We need to think billions

Expenditure has to be cut dramatically

Have you ever seen a voluntary tax? You'd get a severe shrinkage in GDP and GNP for a couple of years, but you'd potentially gain a lot more from it. Expenditure does indeed need to be cut quite a bit, I've discussed that above. You might find the unions more amenable to such reductions if you could promise equivalent reductions in mortgages as well.

Tipp Man

Amhran Nua wrote: »

Have you ever seen a voluntary tax? You'd get a severe shrinkage in GDP and GNP for a couple of years, but you'd potentially gain a lot more from it. Expenditure does indeed need to be cut quite a bit, I've discussed that above. You might find the unions more amenable to such reductions if you could promise equivalent reductions in mortgages as well.

So do you agree the amount raised would be small?? And why is everybody so bloody bothered by the unions? I didn't vote for any union in the election, I don't give a damn about the unions. I want the government of this country to take responsibility for the mess that is the current a/c budget in this country

ardmacha

public sector,

The public sector as no problem paying the same tax as everyone else. The issue arises when the public sector are targeted to rectify these problems when it should be an issue for everyone in society.

Atilathehun

Tipp Man wrote: »

So do you agree the amount raised would be small?? And why is everybody so bloody bothered by the unions? I didn't vote for any union in the election, I don't give a damn about the unions. I want the government of this country to take responsibility for the mess that is the current a/c budget in this country

The wife reckons Enda Kenny has aged 15 years since to got the top job:rolleyes:
The thing is .............. women's instinct is never far off.
The big bang is coming on Enda's watch

Amhran Nua

Tipp Man wrote: »

So do you agree the amount raised would be small??

The amount raised would depend entirely on the raise we're talking about. I could see the NPRF being refilled at least. Again this wouldn't be the linchpin of any plan, just a security net.

Tipp Man wrote: »

And why is everybody so bloody bothered by the unions? I didn't vote for any union in the election, I don't give a damn about the unions. I want the government of this country to take responsibility for the mess that is the current a/c budget in this country

Agreed, but a side effect of FF ankle grabbing over the last ten years is that the unions can strike and paralyse the country, a no doubt treasonous act, but nonetheless a situation to be avoided.

Jaysoose

ardmacha wrote: »

The public sector as no problem paying the same tax as everyone else. The issue arises when the public sector are targeted to rectify these problems when it should be an issue for everyone in society.

Oh christ here we go, the public sector is part of the larger problem so it has to be mentioned when talking about this issue.

Tipp Man

Amhran Nua wrote: »

The amount raised would depend entirely on the raise we're talking about. I could see the NPRF being refilled at least. Again this wouldn't be the linchpin of any plan, just a security net.


Agreed, but a side effect of FF ankle grabbing over the last ten years is that the unions can strike and paralyse the country, a no doubt treasonous act, but nonetheless a situation to be avoided.

That's governing by fear though, we can't put the unions out for fear of "paralising the country". That's why the finances are in the mess they are in - pandering to the unions

Let them strike - when the pay packets dry up lets see how many of them are still willing to strike

Amhran Nua

Tipp Man wrote: »

That's governing by fear though, we can't put the unions out for fear of "paralising the country". That's why the finances are in the mess they are in - pandering to the unions

Let them strike - when the pay packets dry up lets see how many of them are still willing to strike

On the balance though, I'd say the consequences of my suggestion are less severe than the consequences of your suggestion. Say what you like about the Irish, we've a knack for spotting the loopholes when the chips are down.

HellFireClub

average_runner wrote: »

Agree but people need to have alternative valid plan before saying we just default and not know what the actual knock on effects are and more than likely worst than our current effects!!

I think you are missing the point that for many people, a default in all but name has already occurred for them.

All the people who have lost their jobs, because their private sector employer has "defaulted", and that's more or less what an insolvency or business failure situation amounts to at the end of the day, they have had to take the pain and the very harsh, often savage lifestyle adjustments that comes as a sure and certain consequence of that default.

I think it's fair to ask, when private sector businesses that are not lean enough to to survive the recession, or are just not viable (and my viable I mean necessary), have to default and close, and people such as employees have to suffer extreme hardship, why it is acceptable that we should borrow tens of billions of Euro to essentially protect highly paid public sector workers that have effectively been completely protected from the real business end of this recession, and before someone attacks me, saying that there have been two PS pay cuts, there is a big big difference in my opinion between having a full-time state guaranteed job with a union to represent you, albeit after having to take two rounds of pay cuts, and being in a situation of unemployment without any real prospect for gaining employment in the near term.

Tipp Man

Amhran Nua wrote: »

On the balance though, I'd say the consequences of my suggestion are less severe than the consequences of your suggestion. Say what you like about the Irish, we've a knack for spotting the loopholes when the chips are down.

The consequences of your suggestion are less severe because they go nowhere near addressing the issue, you have no idea how much tax you could raise? I would say that most people would pay a 1 off tax if it would fix the country but this 1 off tax simply wouldn't raise enough money to come anywhere near solving our issues. No matter how high you made it.

to use some numbers I think the income tax target for 2010 was about 11.5b. Lets say you got another 10% onto this (and remember the tax increases to achieve this would be much higher than 10%). so we have an additional 1.15billion. Thats wonderful but we still have a deficit of circa 17 or 18 billion even after this HUGE income tax increase. and the tax was a one off so we have done nothing to actually address the deficit issue which means the year following we are back to square 1

HellFireClub

I also think we should be asking where the IMF, the EU and the ICB were when our deficit cruised past 3%, past 5%, broke the 8% gap, the 10% gap, the 12% gap???

It didn't go from 3% to 12% overnight, so where were the angels of austerity when the situation was very clearly going off in the wrong direction some years ago??? Why wasn't it pulled in at 6% when it was at that stage, 100% in excess of what it ought to have been under the Stability & Growth Pact?

View

Jaysoose wrote: »

2. What cash flow? the banks are taking taxpayers money in and are NOT lending to anybody so there is no cash flow to speak of except into the black hole that is bank debts.

The cash-flow out of ATMs every day and the cash-flow out of accounts to pay bills every day.

Hate the banks if you want but suddenly finding that they aren't there to provide these services would not be funny at all.