Balance the books overnight

088 Mobile phone

The only way we can really be all in this together is if the government do an overnight adjustment, At the moment i think some people have not got the message that this country is f&cked. An overnight adjustment would be very painfull but the pain will have come anyway so like taking of a sticky plaster getting the pain over and done with and throwing the eu/imf/ecb out of the country is the right thing to do.

pconn062

Just wondering what "overnight adjustment" do you think would be sufficient enough for us to cut off the funding from the ECB etc.?

088 Mobile phone

pconn062 wrote: »

Just wondering what "overnight adjustment" do you think would be sufficient enough for us to cut off the funding from the ECB etc.?

About 20 billion

pconn062

No I meant where would the 20 billion come from and why do you think that would be sufficient to cut the funding from the ECB etc.?

Gumbo

088 Mobile phone wrote: »

About 20 billion

sure that wouldnt even cover the bank bailout????

Pete_Cavan

Never mind the bitching that is being done now about "attacks on the most vunerable in society", an overnight adjustment would be 10 times worse for the so called "vunerable". It would require all social welfare payments to be slashed immediately. It is ironic that the only politicians who are advocating "throwing the eu/imf/ecb out of the country" are the same politicians who do all the bitching about the "vunerable".

Scofflaw

Government budgets are not the same as household budgets. Government spending supports a good chunk of the economy - either directly or indirectly - so the sudden withdrawal of it from the system is a huge shock to the economy.

When you cut, say, government spending on printing, you cut the amount of money printing firms in Ireland can earn. The result will be the loss of companies and jobs.

When you cut social welfare, or PS payroll, you cut the amount of spending into the domestic economy by that amount. The result will be the loss of companies and jobs.

When you raise taxes, you make otherwise profitable occupations and companies unprofitable. The result will be the loss of companies and jobs.

When companies and jobs disappear overnight, other companies are unable to fill in the gaps, and many of them, which depended for their earnings on the companies or jobs that have disappeared, will also disappear. The result will be the further loss of companies and jobs. And that loss of companies will lead to further losses.

With a big enough shock to the system, your economic contraction can really take off, with each round of company losses leading to further company losses, while the government's social welfare spending rockets - or else is capped, which means poverty...and yet further job losses.

If it could be done, it would be being done. Unfortunately, as an option, it's a good deal more destructive than simply blowing up the entirety of Leitrim.

cordially,
Scofflaw

088 Mobile phone

pconn062 wrote: »

No I meant where would the 20 billion come from and why do you think that would be sufficient to cut the funding from the ECB etc.?

It would mean that ALL welfare payments would have to go back to 2003 rates (dole 138pw oap 158pw) alot of state assets would have to be 100% sold, 350 garda stations would be closed, Public service numbers would be cut 35% and pay brought back to 2003 levels.

Gumbo

088 Mobile phone wrote: »

It would mean that ALL welfare payments would have to go back to 2003 rates (dole 138pw oap 158pw) alot of state assets would have to be 100% sold, 350 garda stations would be closed, Public service numbers would be cut 35% and pay brought back to 2003 levels.

somehow, i dont think that would work im afraid. cost of living is still rising no end at present.

hmmm

All this "we're f****d", "ireland is obviously going to default", "we need to abandon the Euro and run" stuff seems to miss a small point. We're on the mend, the deficit is reducing, exports are increasing, unemployment has leveled off, banks are not increasing default provisions and the economy is growing (slowly).

088 Mobile phone

hmmm wrote: »

All this "we're f****d", "ireland is obviously going to default", "we need to abandon the Euro and run" stuff seems to miss a small point. We're on the mend, the deficit is reducing, exports are increasing, unemployment has leveled off, banks are not increasing default provisions and the economy is growing (slowly).

Lol you sound like the late brian lenihan

maninasia

hmmm wrote: »

All this "we're f****d", "ireland is obviously going to default", "we need to abandon the Euro and run" stuff seems to miss a small point. We're on the mend, the deficit is reducing, exports are increasing, unemployment has leveled off, banks are not increasing default provisions and the economy is growing (slowly).

Deficit- I assume by this you mean the rate at which we adding on debt has decreased. We are still going to add on 13-15 billion Euro debt in 2012.
You could read this article- http://www.bloomberg.com/news/2011-12-02/irish-fiscal-deficit-widens-on-banks-tax-take-misses-target.html


Exports are increasing- Wrong, read the latest:http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148051.html
http://www.finfacts.ie/irishfinancenews/article_1023674.shtml


Unemployment has leveled off- Wrong, read the latest
http://www.finfacts.ie/irishfinancenews/article_10235889.shtml

Banks are not increasing default provisions because they already have had mountains of money shovelled into them in case you haven't noticed, they are called banks but barely functioning as banks.

Economy is growing slowly- Yes but is it growing fast enough?
http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148122.html

Spinning bad news into good is so old fashioned my friend. Yes the world may not end but neither is the picture rosy at this point in time.

femur61

maninasia wrote: »

Deficit- I assume by this you mean the rate at which we adding on debt has decreased. We are still going to add on 13-15 billion Euro debt in 2012.
You could read this article- http://www.bloomberg.com/news/2011-12-02/irish-fiscal-deficit-widens-on-banks-tax-take-misses-target.html


Exports are increasing- Wrong, read the latest:http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148051.html
http://www.finfacts.ie/irishfinancenews/article_1023674.shtml


Unemployment has leveled off- Wrong, read the latest
http://www.finfacts.ie/irishfinancenews/article_10235889.shtml

Banks are not increasing default provisions because they already have had mountains of money shovelled into them in case you haven't noticed, they are called banks but barely functioning as banks.

Economy is growing slowly- Yes but is it growing fast enough?
http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148122.html

Spinning bad news into good is so old fashioned my friend. Yes the world may not end but neither is the picture rosy at this point in time.

I wish others would take note of these figures, everyone I talk to seems to have their heads in the sand.

n97 mini

Didn't Eoghan Harris say that we would balance the books overnight if our Social Welfare was at the same rate as it is in NI, and if our Public Sector were paid the same rates as the Public Sector in NI.

As someone else said if you take a large chunk of money out of the economy there will be knock on effects, so I don't think it's quite that simple.

It is true that our two biggest heads of expenditure are Social Welfare and Public Sector pay and pensions, and as one is protected from cuts I think we need to resort to magic to fix the deficit, either that or cut SW payments by 90%.

robd

088 Mobile phone wrote: »

It would mean that ALL welfare payments would have to go back to 2003 rates (dole 138pw oap 158pw) alot of state assets would have to be 100% sold, 350 garda stations would be closed, Public service numbers would be cut 35% and pay brought back to 2003 levels.

OP. I guess you've never read about the Great Depression then. Most economic policy (i.e. slowly slowly with regard to cuts and tax increases) is based around avoiding such a scenario.

The left alliance's policies are populist vote grabbing rubbish. Sinn Fein as part of the ruling coalition in NI for example, implement the same policies as they apose here.

Seriously, spend some time reading up on macro economics to at least try to understand what would happen if we did that.

robd

maninasia wrote: »

Deficit- I assume by this you mean the rate at which we adding on debt has decreased. We are still going to add on 13-15 billion Euro debt in 2012.
You could read this article- http://www.bloomberg.com/news/2011-12-02/irish-fiscal-deficit-widens-on-banks-tax-take-misses-target.html


Exports are increasing- Wrong, read the latest:http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148051.html
http://www.finfacts.ie/irishfinancenews/article_1023674.shtml


Unemployment has leveled off- Wrong, read the latest
http://www.finfacts.ie/irishfinancenews/article_10235889.shtml

Banks are not increasing default provisions because they already have had mountains of money shovelled into them in case you haven't noticed, they are called banks but barely functioning as banks.

Economy is growing slowly- Yes but is it growing fast enough?
http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148122.html

Spinning bad news into good is so old fashioned my friend. Yes the world may not end but neither is the picture rosy at this point in time.

Removing 3.8 billion a year from the economy tends to do that and in reality will continue to do that for the next few budgets which do the same.

Changing tack and deciding overnight to bridge the deficit would send unemployment sky rocketing, would spook foreign companies and likely completely collapse our export sector.

In regard to borrowing, western economies continue to borrow and as long as current economic policy/thinking is followed, will always borrow. The key is, growing the economy at a faster rate then borrowing growth. The key in Ireland's case is reducing the increase in borrowing year on year till we reach that situation again. The plan for example, is to continue to borrow €6 billion per year when austerity is finished.

Taxi Drivers

maninasia wrote: »

Deficit- I assume by this you mean the rate at which we adding on debt has decreased. We are still going to add on 13-15 billion Euro debt in 2012.
You could read this article- http://www.bloomberg.com/news/2011-12-02/irish-fiscal-deficit-widens-on-banks-tax-take-misses-target.html


Exports are increasing- Wrong, read the latest:http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148051.html
http://www.finfacts.ie/irishfinancenews/article_1023674.shtml


Unemployment has leveled off- Wrong, read the latest
http://www.finfacts.ie/irishfinancenews/article_10235889.shtml

Banks are not increasing default provisions because they already have had mountains of money shovelled into them in case you haven't noticed, they are called banks but barely functioning as banks.

Economy is growing slowly- Yes but is it growing fast enough?
http://www.irishtimes.com/newspaper/finance/2011/1216/1224309148122.html

Spinning bad news into good is so old fashioned my friend. Yes the world may not end but neither is the picture rosy at this point in time.

You are also selectively choosing figures. The General Government Balance was €49 billion in 2010. This year it will be around €22 billion. If you're going to include the banks in the 2011 figure you have to include them in the 2010 figure.

Unemployment was 14.8% in November last year. This year it is 14.5%. There might have been a slight monthly increase in November but over the year it has "leveled off". See here.

Exports in the first nine months of 2011 exports are 4% larger than they were in the first nine months of 2010. See here.

Your link on growth is to a forecast. No one knows what will happen. The data we have show that the economy grew in the first two quarters of 2011. This was driven by the export sector and the domestic economy is still contracting but it is growth nonetheless.

pog it

088 Mobile phone wrote: »

The only way we can really be all in this together is if the government do an overnight adjustment, At the moment i think some people have not got the message that this country is f&cked. An overnight adjustment would be very painfull but the pain will have come anyway so like taking of a sticky plaster getting the pain over and done with and throwing the eu/imf/ecb out of the country is the right thing to do.

Morgan Kelly gave the people that option. Only 25% agreed with him in a Sunday Independent poll conducted soon after.

That leaves behind a stunning majority (of course polls are not exact but it was a random sample of the population) so truly, people have got what they voted for and what they wanted.

My advice to anyone who finds themselves in that 25% is to look after themselves from now on. The rest of the country ... well. What's the point in worrying about them, they're just going to be even more f$$$$ in the years to come, and it's getting harder and harder to have any sympathy for them.

antoobrien

kceire wrote: »

somehow, i dont think that would work im afraid. cost of living is still rising no end at present.

Not true, since 2007 GDP has dropped by about €35 billion. Inflation peaked in June 2008 with prices being 10% higher than they were in December 2006. Since then they have fallen off by about 6% (but you can't tell that near Dublin where it's still a massive rip off).

Just imagine what would happen if we take > €10 billion spending power out of the economy - bye bye domestic sector and hope (pray if you're that way inclined) that the exporter sector can carry the slack (the export sector is the only reason we're just about above water right now).

View

088 Mobile phone wrote: »

The only way we can really be all in this together is if the government do an overnight adjustment,

You are presuming that people want us to "really be all in this together". There are probably large chunks of society who are quite happy to not be all in this together and are happy enough to see others "in this" while they watch from the sidelines.

088 Mobile phone wrote: »

An overnight adjustment would be very painfull but the pain will have come anyway so like taking of a sticky plaster getting the pain over and done with and throwing the eu/imf/ecb out of the country is the right thing to do.

In olden times, a skilled surgeon could amputate a leg without an anesthetic in a minute or so. Today, most of them prefer to use an anesthetic and take a bit longer. Which option would you prefer if you were having your leg amputated?

Debtocracy

GNP down 4% on an annual basis. I don't know why this policy of expansionary contraction is not working.

Godge

Debtocracy wrote: »

GNP down 4% on an annual basis. I don't know why this policy of expansionary contraction is not working.

Have you a link to an official statistic for this figure?

The latest one I checked was the Department of Finance Monthly Economic Bulletin and it suggested that growth in real GNP was 1.1% in the year to November - see link.


http://www.finance.gov.ie/documents/publications/meb2011/december.pdf

Manach

I'd be one of those who'd favour the dealing with the budget all at once. To borrow an earlier analogy re amputation. In the midst of an economic battlefield there is no time for nicities and the sooner the action is done the better. As it is, the State's grand plan seems to be hope the global economy improves so as the export sector can lead the recovery - the section of the economy which is least dependent on State budgetary handouts.

Godge

Manach wrote: »

I'd be one of those who'd favour the dealing with the budget all at once. To borrow an earlier analogy re amputation. In the midst of an economic battlefield there is no time for nicities and the sooner the action is done the better. As it is, the State's grand plan seems to be hope the global economy improves so as the export sector can lead the recovery - the section of the economy which is least dependent on State budgetary handouts.

Yes, I think the amputation analogy is a good one.

The short sharp correction is the one most likely to wreck the economy the same way the quick amputation is most likely to kill the patient.

The long surgery requires skill, patience, experience and knowledge and results in a better prognosis for the patient - sometimes part of the limb can be saved. Similarly, the corrective action the current government is taking requires patience and gives a better prognosis for the economy. Just hope they are skilled enough to pull it off.

Solair

The problem with that proposal is the overnight adjustment would be followed by a complete collapse of society the following morning!

Government, particularly in a country like Ireland, is only achievable by a general consensus. If the Government really did something deeply unpopular, I don't think they would be able to implement it.

We do not live in a dictatorship and the organs of the state would not really be able to implement dictatorship-like policies as they simply would not have the authoritarian ability, the fire power, the support of the public service employees, law enforcement etc. not to mention that Dail and the Cabinet would not hold together on such a proposal.

I mean, you could equally just ask people to pay off their entire credit card / personal loan balance tomorrow morning. They might be able to do it, but they would probably starve.

You cannot really adjust huge budgetary systems overnight without causing absolute mayhem.

Geuze

Godge wrote: »

Have you a link to an official statistic for this figure?

http://www.cso.ie/en/media/csoie/releasespublications/documents/economy/2011/qna_q32011.pdf

K-9

A €20 Billion adjustment would mean roughly a pro rata a cut of €9/10 Billion to SW, €6/7 Billion to PS pay and the rest on general stuff.

Tax receipts would fall, self employed business would go bust, unemployment would rise and services would be drastically cut.

Its estimated for each 1% cut in GDP by cutting Govt. expenditure, .5/.6% of growth is cut.

You'd have to keep cutting, it wouldn't be an overnight cut, it would keep going on.

Gumbo

antoobrien wrote: »

Not true, since 2007 GDP has dropped by about €35 billion. Inflation peaked in June 2008 with prices being 10% higher than they were in December 2006. Since then they have fallen off by about 6% (but you can't tell that near Dublin where it's still a massive rip off).

The inflation rate in Ireland was last reported at 2.9 percent in November of 2011. From 1976 until 2010, the average inflation rate in Ireland was 5.49 percent reaching an historical high of 23.15 percent in October of 1981 and a record low of -6.56 percent in October of 2009

Source

Boskowski

It wouldn't work. For starters people are coddin themselves about the state of the nation. Ireland is pretty unequal in society terms. The protected pockets would fight tooth and nails to prevent this especially the very upper end like the political class. The more they have to lose the more they'd obstruct. Only people with little or nothing tonlose think this is a good idea. And even those would be surprised how much they would actually lose. It's a complete non-runner. People are much closer to their their warm homes and their two cars - even if they're two ten year old hyundais and the home is heated in fuel allowance - than to some idealistic notion about sovereignty and the nation and such. Especially when most of that is scaremongering anyways.

Head The Wall

kceire wrote: »

Source

Inflation was near 5% in July 2008 and it's 2.9% now. I suppose we have the govt to thank for that though, increasing costs and reduced services.

DUBLIN — Ireland's inflation rate has risen to 2.9 percent as the cost of state-regulated services lead the way up.

The Central Statistics Office says annual price rises increased in November from October's rate of 2.8 percent.

Irish prices overall have been climbing since August 2010 following 20 straight months of falls.

While the cost of many imported goods and tourist-related businesses has continued to weaken slightly, that is more than offset by sharp rises in government-controled sectors of the economy.

Thursday's report says the cost of utilities has risen 8.4 percent over the past year, education 8.9 percent, transport 3.7 percent and health 2.6 percent. All are funded or regulated by Ireland's debt-fighting government.

Gumbo

Head The Wall wrote: »

Inflation was near 5% in July 2008 and it's 2.9% now. I suppose we have the govt to thank for that though, increasing costs and reduced services.

yes but in 2008, i got a 5k pay rise in my previous job, so all was merry.
Currently, inflation is rising and the money left in your pocket every week is dropping sharpely.

antoobrien

kceire wrote: »

Currently, inflation is rising and the money left in your pocket every week is dropping sharpely.

That'll happen when you're paid by the month

Gumbo

antoobrien wrote: »

That'll happen when you're paid by the month

but not when your paid by the week

BluntGuy

Pete_Cavan wrote: »

Never mind the bitching that is being done now about "attacks on the most vunerable in society", an overnight adjustment would be 10 times worse for the so called "vunerable". It would require all social welfare payments to be slashed immediately. It is ironic that the only politicians who are advocating "throwing the eu/imf/ecb out of the country" are the same politicians who do all the bitching about the "vunerable".

It was with a large amount of embarrassment I watched Mr Higgins give probably his worst performance of all time on Vincent Browne, I think on the 30th, when something like €10 billion came from absolutely nowhere to fix the deficit. I do not find it so much "ironic", as I do despicable, that the politicians who advocate such a drastic course of action, in full knowledge that it would cause unbearable hardship for people, continue to peddle such... frankly insane proposals.

hmmm

BluntGuy wrote: »

I do not find it so much "ironic", as I do despicable, that the politicians who advocate such a drastic course of action, in full knowledge that it would cause unbearable hardship for people, continue to peddle such... frankly insane proposals.

It suits certain individuals and parties to ferment chaos, as they espouse ideologies that would not get electoral success in normal times. It's the only scenario where a hard left socialist party can reach real power, so I doubt the collateral damage they cause is of any concern.

nesf

Godge wrote: »

Have you a link to an official statistic for this figure?

The latest one I checked was the Department of Finance Monthly Economic Bulletin and it suggested that growth in real GNP was 1.1% in the year to November - see link.


http://www.finance.gov.ie/documents/publications/meb2011/december.pdf

It depends. If you count from Q4 2010 our GNP is up, if you count from Q3 2010 it's down. Personally I only care that it's down 2% or so this quarter after two quarters of growth and whether this is the beginning of a trend or a momentary blip.

WalterMitty

The reality of the Irish economy and its prospects from Dr Gurdgiev.
http://www.villagemagazine.ie/index.php/2011/12/constantin-gurdgiev-our-celtic-unicorn-economy/

n97 mini

WalterMitty wrote: »

The reality of the Irish economy and its prospects from Dr Gurdgiev.
http://www.villagemagazine.ie/index.php/2011/12/constantin-gurdgiev-our-celtic-unicorn-economy/

Bloody hell! Doesn't make for pleasant reading.

nesf

WalterMitty wrote: »

The reality of the Irish economy and its prospects from Dr Gurdgiev.
http://www.villagemagazine.ie/index.php/2011/12/constantin-gurdgiev-our-celtic-unicorn-economy/

Jesus the formatting is so bad on that page. I'd like to read it but **** that.