Repay bank debt over 90 years, says ICTU

Permabear

This post has been deleted.

Sleepy

*IF* we're to pay off the gambling debts of the banks, this path actually makes sense to me. That doesn't, however, mean I don't think we should be fixing our current defecit problem by bringing the public sector pay and conditions into line with reality, reducing welfare to sustainable levels etc.

ressem

Isn't that going to be the case though as things stand? I believe that we paid off little of the '80s debt.

We'll spend a substantial percentage of tax revenue on interest payments, but the actual debt will end up being rolled over for decades.
http://www.ntma.ie/NationalDebt/historicalData1.php

A 90 year repayment does nothing to alleviate the requirement to get the deficit below 3% in the near term.

There is a question of whether we'll be fined under clause of the stability and growth pact setting debt to 60% max that Belgium/Italy/Germany/France seem to ignore.

I guess that Permabear is setting the question, after achieving 3% deficit how far should we continue to cut in the hope of improving the economy in the longer term and reducing the interest payments in the long term.

Once that number is reached the politicians will want to return to the old habits of silly unnecessary projects to pull in votes.
Avoiding a broadband quango in 2017 might save resources enough for a hospital in 2040.
The voters will probably be sick of belt tightening talk and forget about the past and future.

'I don't think we can pay this off in any short period of time.

No, David, not when you insist on keeping everything else exactly as it is.
I would suppose the Germans didn't take so long to pay it back just to indulge in more 'we want our cheque-cashing half hours'!

Valmont

When are we going to see the government take on the public sector unions? Will it actually ever happen? Looking at our debt and revenue prospects, when will we hit a wall with them?

Back in 2008, I would never have thought they would still be on their cushy wages in 2011. I don't want to start a bashing of the PS, but am very curious as to when large scale cutting and slashing has to begin, because surely we can't carry on spending this sort of money on them?

Maybe they're right and we can, sure it's been over two years since the economy tanked!

Jaysoose

Who cares what begg thinks at this stage?

Denerick

But surely the next generation are going to be screwed either way? As our population ages and the demographic timebomb (The retirement of the baby boomers) hits the entire western world will go into economic shock, as they will be unable to sustain the huge unfunded pension entitlements promised by government after government after government. Our politics will be in gridlock, as pensioners will not move an inch towards compromise, and so the remaining workforce will be smothered by huge taxes that will be thrown away on lavish pensions, instead of sensible investment or education.

Sooner or later we'll have to come up with a bright solution to make our system workable. I've a feeling that new technology may provide many answers, as technology still has the potential to dramatically increase productivity.

Taxi Drivers

I didn't know we had a plan to pay it off! I thought we were never going to pay it off. Governments don't pay their debts. Isn't that what has most countries hurtling to bankruptcy?

Denerick

Valmont wrote: »

When are we going to see the government take on the public sector unions? Will it actually ever happen? Looking at our debt and revenue prospects, when will we hit a wall with them?

Back in 2008, I would never have thought they would still be on their cushy wages in 2011. I don't want to start a bashing of the PS, but am very curious as to when large scale cutting and slashing has to begin, because surely we can't carry on spending this sort of money on them?

Maybe they're right and we can, sure it's been over two years since the economy tanked!

Their pay packets have been cut by 15% on average. How deep do you want to go? 30%? 50%? We'll only create a deflationary spiral if we cut with reckless abandon. Phase it out over a longer period of time.

tayto lover

Valmont wrote: »

When are we going to see the government take on the public sector unions? Will it actually ever happen? Looking at our debt and revenue prospects, when will we hit a wall with them?

Back in 2008, I would never have thought they would still be on their cushy wages in 2011. I don't want to start a bashing of the PS, but am very curious as to when large scale cutting and slashing has to begin, because surely we can't carry on spending this sort of money on them?

Maybe they're right and we can, sure it's been over two years since the economy tanked!

You are obviously not aware that deductions of 14% (two pay cuts) have already being made by the Public Sector workers plus the U.S.C. They also pay income tax believe it or not and have bills, mortgages, childcare etc just like those in the Private Sector. Many of them are in negative equity and have trouble paying their mortgage just like members of the Private Sector too. Would you like them to work for nothing?

Valmont

tayto lover wrote: »

Would you like them to work for nothing?

Are you suggesting that the public sector cannot sustain another pay cut? They still maintain a very handsome premium over private sector workers, who seem to be scraping by.

Regarding the gradual phasing in of cuts and savings, can we afford to delay? And regarding the risks of a deflationary spiral, a reduction in the supply of money can only be welcomed after the inflationary splurge of the last decade.

tayto lover

Valmont wrote: »

Are you suggesting that the public sector cannot sustain another pay cut? They still maintain a very handsome premium over private sector workers, who seem to be scraping by.

Regarding the gradual phasing in of cuts and savings, can we afford to delay? And regarding the risks of a deflationary spiral, a reduction in the supply of money can only be welcomed after the inflationary splurge of the last decade.

No there will be cuts everywhere Private as well. What i am saying is that we will not cut our way out of this. The people in the Public Sector have the same problems as those in the Private Sector i.e. unable to pay bills with all the cuts. Even if they are earning more (which i dispute) they have probably gone for bigger homes with bigger mortgages so are in the same boat.
Cutting numbers and wages will just lead to more bill paying problems, more on dole, pensions etc and no way can we continue to keep paying back the I.M.F./E.U. loans. Something will give and there will eventually be civil disorder. A bleak future lies ahead whichever sector you work in, thats for sure.

RichardAnd

Denerick wrote: »

But surely the next generation are going to be screwed either way? As our population ages and the demographic timebomb (The retirement of the baby boomers) hits the entire western world will go into economic shock, as they will be unable to sustain the huge unfunded pension entitlements promised by government after government after government. Our politics will be in gridlock, as pensioners will not move an inch towards compromise, and so the remaining workforce will be smothered by huge taxes that will be thrown away on lavish pensions, instead of sensible investment or education.

Sooner or later we'll have to come up with a bright solution to make our system workable. I've a feeling that new technology may provide many answers, as technology still has the potential to dramatically increase productivity.

This is something I often wonder about myself. Currently, we have something like five people working for every one retired and, apparently, in about 50 odd years, this will be down to 2 working for every one retired. This isn't a time-bomb however, it's a problem that will get gradually worse as years pass.

Technology is a double edged sword. Whilst it can make things more efficient, it also makes jobs redundant as computers take the place of people. Granted, the jobs of creating and maintaining the machines themselves are created, but one engineer can look after a server that could deal with thousands of customers and not everyone can be an engineer at all.

We're at a very nasty cross roads right now. On one hand, our population is living longer than ever before but, as is becoming blatantly clear, the cost of that feat is becoming too much to bare.

On top of this, we are coming out of a baby boom in that we have thousands of children who are going to grow up in a depressed economy that will not be able to provide jobs for many of them.

This can be summed up simply; we have too many people on this little blue marble and there is no easy solution to that

Valmont

When I think about the looming pensions crisis, I really hope that my life misses the brunt of the disaster although I hope there is a heaven so that I can keep an eye on things and read the paper as it's happening.

sarumite

Denerick wrote: »

Their pay packets have been cut by 15% on average. How deep do you want to go? 30%? 50%? We'll only create a deflationary spiral if we cut with reckless abandon. Phase it out over a longer period of time.

I thought their gross pay was reduced by 7.5% on average?

gurramok

Denerick wrote: »

Their pay packets have been cut by 15% on average. How deep do you want to go? 30%? 50%?

Their wages rose ahead too far in the boom times so that 15% is not as painful for the still overpaid sectors. There is more room for cuts in this section.

fliball123

sarumite wrote: »

I thought their gross pay was reduced by 7.5% on average?

It was the public sector seem to think that a 7% pension levy which is "a contribution to a defined benefit" not a pay cut...People in the private sector now have to pay tax on benefits in Kind ..such as a company car...its the same thing

sollar

fliball123 wrote: »

It was the public sector seem to think that a 7% pension levy which is "a contribution to a defined benefit" not a pay cut...People in the private sector now have to pay tax on benefits in Kind ..such as a company car...its the same thing

The pension levy is a deduction from public servants wages that goes into the general coffers. The public servants will never see this money again and it does not improve their pension one jot. There was an agreement on pensions in place already. The pension levy adds nothing to their pension but reduces their weekly pay. Its a fancy Fianna Fail cut.

BTW i agree with david begg, if we are to take on this debt then better to stretch it out so its managable. In a few decades the repayments will seem very very small and they will be smaller now too. Alot of the people shouldering the debt today are no more culpable than the nations grandchildren of the future.

Yitzhak Rabin

Well I believe the enormous debt is unpayable under the current conditions, and would probably think that stretching it out is a good idea. Not for the reasons that parasite Begg suggest though. We still need to cut our PS and reform our political system. The only reason I am in favour of a longer term to pay it back, is because I don't think we possibly can pay it back in the short term without annihilating the economy.

fliball123

sollar wrote: »

The pension levy is a deduction from public servants wages that goes into the general coffers. The public servants will never see this money again and it does not improve their pension one jot. There was an agreement on pensions in place already. The pension levy adds nothing to their pension but reduces their weekly pay. Its a fancy Fianna Fail cut.

BTW i agree with david begg, if we are to take on this debt then better to stretch it out so its managable. In a few decades the repayments will seem very very small and they will be smaller now too. Alot of the people shouldering the debt today are no more culpable than the nations grandchildren of the future.

And quite rightly so it shouldnt increase an already impressive pension package for the majority in the ps...This is an attempt by the gov to take money for this impressive pension in retospect...Therefore it is a contribution to a defined benefit which the p.s were already for years getting this overly generous benefit.........By your logic all my taxes I pay are pay cuts .....The money I pay into my pension is a pay cut I doubt if I will see that money again......Sorry but it doesnt work like that and Pensions (especially the gold plated ps ones need the person actually getting the pension to pay a fairer proportion of it) I will never see my taxes again but thats the way things are...

As for Beggs and OConner and his ilk I cannot wait for these strikes to happen and they will ... There will be absolutely no public support for the unions or anyone going on strike..Especially in a time were we are all in the mire...I reckon Kenny should give Thatcher a ring and see how the iron lady sorted out Neil Kinnock...

Beggs wants my grand kids to pay for the banks, for overly generous ps pay and pensions and for overly generous welfare...thanks but no thanks...I would rather we cut spending back to where it was a decade ago.....

sollar

fliball123 wrote: »

This is an attempt by the gov to take money for this impressive pension in retospect....

Yes a cut

fliball123 wrote: »

As for Beggs and OConner and his ilk I cannot wait for these strikes to happen and they will ... There will be absolutely no public support for the unions or anyone going on strike....

I think the need for public support is overstated sometimes. Its not that important.

fliball123

sollar wrote: »

Yes a cut



I think the need for public support is overstated sometimes. Its not that important.

No its a contribution to a defined benefit not a cut..You did get a seperate 7.5% cut on your gross wage...


As for public support...well when you guys are pickoting and the general public are fcuking out buckets of p1ss at you and tell you were to go when your on day 50 off your strike and you have not got paid.....As I say there is no stomach or room in modern day Ireland for vested interest groups..

We are all going to be taxed more
Social welfare is going to be cut as will public services...why should the public sector be left with their overly generous wage when it comes to balancing the books....

As for the p1ss thing it has happened in other parts of the world..I will make sure I drink a shed load of beer to make it nice and froathy for you

sollar

sollar wrote: »

The pension levy is a deduction from public servants wages that goes into the general coffers. The public servants will never see this money again and it does not improve their pension one jot. There was an agreement on pensions in place already. The pension levy adds nothing to their pension but reduces their weekly pay. Its a fancy Fianna Fail cut.

BTW i agree with david begg, if we are to take on this debt then better to stretch it out so its managable. In a few decades the repayments will seem very very small and they will be smaller now too. Alot of the people shouldering the debt today are no more culpable than the nations grandchildren of the future.

Their pensions are already expensive enough and they were not meeting the full cost - so no, it doesn't improve the pension, it goes some way toward paying the cost of them. It is not a "fancy cut". It is exactly the same situation in which many DB schemes are finding themselves.
But better not get me on the subject of PS DB pensions again...

ressem

sollar wrote: »

The pension levy is a deduction from public servants wages that goes into the general coffers. The public servants will never see this money again and it does not improve their pension one jot. There was an agreement on pensions in place already. The pension levy adds nothing to their pension but reduces their weekly pay. Its a fancy Fianna Fail cut.

The cost of providing the public service pension has jumped from 2.569 billion to 2.924 billion from 2009 to 2011 estimate, due to increasing numbers and other increases. So it can be argued that your deductions are preventing cuts to your predecessors.

BTW i agree with david begg, if we are to take on this debt then better to stretch it out so its managable. In a few decades the repayments will seem very very small and they will be smaller now too. Alot of the people shouldering the debt today are no more culpable than the nations grandchildren of the future.

Unfortunately it's not up to us, it's up to the lenders. Just as you can't walk into your car finance provider and tell him that you are changing the terms of your car loan repayments from 5 years to 50 years.

Sooner or later the loans will have to be rolled over. And every time that this happens, we will be vulnerable to usurious rates being imposed by the markets, various speculators and commentators manipulating media commentary to gain a 1/4 % on the rate, and leaving generations of our kids with zero room for error.

And the loans, denominated in euros, will not deflate at anything like that rate that helped us before. Unless you would like to speculate on putting the loans in dollar denominations.