How much is this all going to cost and who will pay for it ?

Plumbthedepths

growleaves wrote: »

They do though. Learning from a screen is a poor substitute for a college or university education.

I love the assumption that every part of the country has fibre boardband to the door.

ThunbergsAreGo

Wanderer78 wrote: »

so implement austerity like measures, thats helped us a lot during this crisis, hasnt it, particularly our health system!



...and reduce the overall money supply, how is that gonna help the economy?

Our health system. Isn't under funded, its mis managed, big difference

bosco12345

[Deleted User] wrote: »

Where are you thinking of going? I'm keeping my eye on a few countries.

Canada / Australia / New Zealand

Geuze

Wanderer78 wrote: »

so implement austerity like measures, thats helped us a lot during this crisis, hasnt it, particularly our health system!

Healthcare expenditure has massively increased in recent years.

The exp is too high, relative to the age profile of our population.

We have too many hosps, and massive waste and duplication.

This is all well known.

Health outcomes have improved.

Access and waiting lists / times are still a massive problem.

This problem is not due to too little expenditure.

Geuze

Wanderer78 wrote: »

please explain how stripping our critical public sectors such as the health system, 'didnt hurt'?

H/C staff in the PS got the same 2-3-4 pay cuts as all public servants, during 2009-2012.

If you want to call that austerity, then go ahead.


Since then, spending has increased.

https://www.cso.ie/en/releasesandpublications/ep/p-sha/systemofhealthaccounts2018/healthexpenditureinireland2018/


2014 = 18,850m

2018 = 22,452m

Multi-billion euro expenditure increases over a few years.

Geuze

Wanderer78 wrote: »

...and reduce the overall money supply, how is that gonna help the economy?

Off-topic, but can you explain (exactly) how running a smaller budget deficit will reduce the money stock?


Money supply M1 = cash + current a/c balances

Money supply M3 = M1 plus deposit a/c balances

KyussB

Rather than focus on the money stock, the focus is on money flows - using Sectoral Balances:
Reducing the deficit reduces the flow of money going into the (already depressed/below-capacity) private sector, which hinders the return to maximum-GDP/Full-Output.

Rodin

Those who always pay will be asked to pay more.
Those who never pay (scroungers of the state) will not be asked for a penny more...

It will be as it ever was/is

wes

Deleted User wrote: »

Congrats to your daughter. I hope she likes the job.

That's something I've been thinking about. If people continue to work from home then that will impact on small businesses such as cafés and newsagents. It would mean fewer people would be going to those places for a coffee or for lunch. David Solomon, the chief executive of Goldman Sachs called WFH an 'aberration' the other day and said the plan was to get people back in the office as soon as possible: https://www.prdaily.com/goldman-sachs-chief-calls-wfh-an-aberration-zoom-adds-closed-captioning-and-mckinsey-ousts-global-managing-partner/. I imagine there will be companies that go for a mix of WFH and work from the office and others such as Goldman Sachs that don't. It'll be interesting to see what happens.

I think some employers are going to be in for a bit of a rude awakening, as those who offer the flexible option to work some days from home, will have an easier time of hiring staff.

Company I work for had hybrid before the pandemic, and even the lads who would usually come in 5 days a week, liked that they could do the occasional day from home if they needed to.

I know people who turned down job offers (including myself), as they did not allow at least some days working from home. It really is a very useful option to have.

Geuze

KyussB wrote: »

Rather than focus on the money stock, the focus is on money flows - using Sectoral Balances:
Reducing the deficit reduces the flow of money going into the (already depressed/below-capacity) private sector, which hinders the return to maximum-GDP/Full-Output.

I would be careful with those balances, as Inv is massively distorted by MNC activities.


(S - I) + (T - G) = (Current a/c balance CA BoIP)

I will take an example.

2019

(S - I) + (small GG surplus +1.9bn) = (massive CA deficit of 40,404m)

So (S - I) was -42.3bn in 2019, that is a massive negative figure. This means private inv was way bigger than private saving.

Moving to 2020

(S - I) + (estimated 20bn fiscal deficit) = (CA surplus 16,924m)

So it looks like (S - I) will swing from -42.3 bn to 36.9bn.


MNC activities are causing huge inv flows, as IP is onshored here.

Geuze

KyussB wrote: »

Reducing the deficit reduces the flow of money going into the (already depressed/below-capacity) private sector, which hinders the return to maximum-GDP/Full-Output.

A rebounding economy in the second half of 2021, and 2022 will cause the fiscal deficit to fall.

As we move back towards full output, the deficit will naturally fall.

Tax revenues will rise, expenditure on PUP, EWSS, etc. will fall.

KyussB

What is important in the context of sectoral balances, is that the fiscal deficit is directly related to the speed at which the economy recovers - you reduce the fiscal deficit, you reduce the flow of money going into the private sector, you slow down the recovery.

That the budget is affected by automatic stabilizers like unemployment payments and PUP, and increasing revenue as the economy recovers, doesn't matter. They don't define the budget, the budget still has to be manually managed.

We have ~25% covid-adjusted unemployment. We are nowhere near recovery. We need a bigger fiscal deficit than we currently have, not a smaller one - in order to recover faster. When we're near Full Output i.e. Full Employment, then we pull back the deficit (to inflation target levels).

Jim2007

Deleted User wrote: »

Congrats to your daughter. I hope she likes the job.

That's something I've been thinking about. If people continue to work from home then that will impact on small businesses such as cafés and newsagents. It would mean fewer people would be going to those places for a coffee or for lunch.

It just means they will got to different establishments and probably the rebirth of smaller towns and villages.

Hotblack Desiato

punisher5112 wrote: »

Huge tax increases on their way.... USC will never leave us and more levies upon levies and anything else they can think up.....

It will get to the point nobody will be able to afford to retire.....

There will not be huge tax increases, once businesses are open again the government finances will be close to balance, and yes some businesses won't reopen but others will take their place

There is a huge amount of pent-up demand for socialising, eating out, hotel stays etc which people are dying to do (no pun intended) but for much of the last year couldn't! All of these will raise a lot of excise duty and VAT as well as getting people back into work

USC should be kept as it hits unearned income, give workers an increase in the PAYE allowance instead of cutting USC.

As for nobody being able to afford to retire, the issue of pensions needs to be tackled. We still have no auto-enrolment, very poor pension coverage in the private sector, and the issue of pension age needs to be tackled, SF and FF think this issue can be wished away but it can't. The idea isn't that people should get an alternative benefit at 65 until they qualify for OAP, that's still being on social welfare so is only a fudge. The idea behind raising the OAP age is that people will be able to work longer and nobody should be forced to retire at 65 any more.

KyussB

KyussB wrote: »

We need a bigger fiscal deficit than we currently have, not a smaller one - in order to recover faster. When we're near Full Output i.e. Full Employment, then we pull back the deficit (to inflation target levels).

What if we don't get to the point of Full Output due to some other economic shock? How can we pull back the deficit?

What if the virus struck in 2012 while we were up to our necks in debt, how would we have been able to borrow?

The suddenness of this economic shock should have made clear to you why debt should be kept as low as possible to allow for borrowing capacity at times of crisis.

Geuze

KyussB wrote: »

Reducing the deficit reduces the flow of money going into the (already depressed/below-capacity) private sector, which hinders the return to maximum-GDP/Full-Output.

This seems to be based on the presumption that the fiscal expenditure multiplier is high in Ireland.

The evidence on the size of the multipliers here is mixed:

https://www.fiscalcouncil.ie/wp-content/uploads/2019/01/Ireland%E2%80%99s-Spending-Multipliers-Final.pdf


Our findings suggest that there is some evidence of positive, significant initial impacts on economic activity associated with fiscal policy, yet
these effects disappear over the longer term.

The estimated impacts are wide-ranging and uncertain, with limited evidence of positive impacts on the economy from government consumption as a whole. Within this, we find broadly negative—though insignificant effects—from public sector wages.

Investment spending tends to have higher short-term multipliers, but the significance disappears over the medium to long term. This is
consistent with theory and with the fact that Ireland’s relatively large dependence on imports leads to high leakages of income (Cronin and
McQuinn, 2014).

KyussB

Geuze wrote: »

This seems to be based on the presumption that the fiscal expenditure multiplier is high in Ireland.

The evidence on the size of the multipliers here is mixed:

https://www.fiscalcouncil.ie/wp-content/uploads/2019/01/Ireland%E2%80%99s-Spending-Multipliers-Final.pdf


Our findings suggest that there is some evidence of positive, significant initial impacts on economic activity associated with fiscal policy, yet
these effects disappear over the longer term.

The estimated impacts are wide-ranging and uncertain, with limited evidence of positive impacts on the economy from government consumption as a whole. Within this, we find broadly negative—though insignificant effects—from public sector wages.

Investment spending tends to have higher short-term multipliers, but the significance disappears over the medium to long term. This is
consistent with theory and with the fact that Ireland’s relatively large dependence on imports leads to high leakages of income (Cronin and
McQuinn, 2014).

Multipliers don't come into it, there is no such assumption. The national current account (representing foreign trade) does not matter (particularly in the Euro) - it is a meaningless number of no consequence - we can drive it as far into deficit as we want, and that is a good thing, as it means we have a net-gain of real material assets.

Reducing the government deficit still reduces the flow of money going into the private sector, no matter how much of the money indirectly goes into the foreign sector.

Danzy

lawred2 wrote: »

It's been printing money pretty much non stop for the last decade.

Yet no inflation!?

It's about stopping the Eurozone sinking in to deflation.

Is there a level of printing we'll see that will create problem inflation, probably not, it's years of stimulation now and growth and inflation are weak.

That's frightening.

Geuze

KyussB wrote: »

The national current account (representing foreign trade) does not matter (particularly in the Euro) - it is a meaningless number of no consequence - we can drive it as far into deficit as we want, and that is a good thing, as it means we have a net-gain of real material assets.

This statement is false.

If we drive our current account of the BoIP into deficit, we are borrowing from the rest of the world.

We would be accumulating debt, and reducing our assets.

Countries that run CA deficits are spending more than their income, and so are accumulating liabilities.

KyussB

The current account deficit is merely a tally with no specific limit or due date, it is wrong to compare it to private sector or even public sector debt, despite being a net liability. Every note and coin in your wallet is a net liability to the state, yet pushing to 'balance the books' there would eliminate all currency, which would obviously be silly.

Debt is defined by the legal contract we associate with it. A debt with no contract can remain unbalanced forever with no legal consequence.

Current account 'debt' has no associated contract, it's just a tally. Private sector debts typically have a contract specifying terms of repayment. Government debts have their own type of contract specifying separate terms of repayment. Money is a net liability to the state i.e. debt and has a contract defining it as legal tender, allowing its use as a means of exchange and for paying taxes/debts etc..

We gain material assets with a current account deficit, we don't reduce our assets.

There are good macroeconomic reasons not to run up a large imbalance of payments with the current account long-term - but the same way you let the fiscal deficit wax and wane to allow the economy to recover, you let the balance of payments wax and wane to allow the economy to recover as well.

The US, having the worlds reserve currency, is able to run a permanent current account deficit - and if the US suddenly balanced that deficit, the world economy would collapse because exporting nations depend on the US/reserve-currency running a massive deficit.

Fairly impressed with the responses here.

GazzaL

Any chance the pro lockdown crowd would agree to pay say 60-70% tax for the foreseeable future to cover the economic cost of the lockdowns? Chances are this crowd have been earning full whack for the duration so it's time for them to put on the green jersey and think of what they can do for their country. Any volunteers on here?

I was disappointed that more people, including the NPHET and TDs, didn't forfeit their salaries to take home just €350 in solidarity with the people that they forced out of work.

Red Silurian

I don't think there will be much of a bill to pay. When we exit this lockdown we will have a substantial public debt for sure but it will be an almost immediate case of everybody going back to work in the space of 6 months, wage subsidy and PUP figures will mostly be gone other than for certain industries such as international tourism of course...

This means we will go back to 100% employment and those who were unemployed will have been supported in some way all along. By comparison after the money was spent on the bank bailout in 2008 we had an almost 30% unemployment figure

is_that_so

One interesting effect of COVID and no construction, low supply and higher house prices.

House prices in Ireland have increased by an average of €20,000 in the past year, according to property website Daft.ie.

https://www.irishtimes.com/business/economy/house-prices-jump-by-20-000-amid-covid-supply-shock-1.4524301

Plumbthedepths

Red Silurian wrote: »

I don't think there will be much of a bill to pay. When we exit this lockdown we will have a substantial public debt for sure but it will be an almost immediate case of everybody going back to work in the space of 6 months, wage subsidy and PUP figures will mostly be gone other than for certain industries such as international tourism of course...

This means we will go back to 100% employment and those who were unemployed will have been supported in some way all along. By comparison after the money was spent on the bank bailout in 2008 we had an almost 30% unemployment figure

Your optimism is endearing, sadly reality will not be as rosy.

Danzy

Red Silurian wrote: »

I don't think there will be much of a bill to pay. When we exit this lockdown we will have a substantial public debt for sure but it will be an almost immediate case of everybody going back to work in the space of 6 months, wage subsidy and PUP figures will mostly be gone other than for certain industries such as international tourism of course...

This means we will go back to 100% employment and those who were unemployed will have been supported in some way all along. By comparison after the money was spent on the bank bailout in 2008 we had an almost 30% unemployment figure

There are reasons to be optimistic but the debt is already massive

The wider continental EU attitude to Vaccination rollout means that much of the EU will be enduring restrictions for months to come.

It's going to take massive stimulus from the ECB to solve the debt crisis incurred.

In some ways the prognosis is much better than the last crash but in others there is a compounding.

That said a boom decade is also possible.

alentejo

The main issue is that all EU countries will be massively in debt this time round.

Pussyhands

https://www.rte.ie/news/business/2021/0331/1207173-brendan-mcgrath-on-covid-spending/

Covid spending will reach 28bn at the end of 2021.

This is horrific news lads and it's frightening that most people don't know what's coming down the tracks.

Government are announcing millions a day in funding for groups. 17 million yesterday willy nilly for outdoor dining.

Squeezed middle are going to be shafted again paying for this.

screamer

alentejo wrote: »

The main issue is that all EU countries will be massively in debt this time round.

Which might mean they won’t crucify uswith rules and demands this time as they’re up **** creek themselves

is_that_so

Pussyhands wrote: »

https://www.rte.ie/news/business/2021/0331/1207173-brendan-mcgrath-on-covid-spending/

Covid spending will reach 28bn at the end of 2021.

This is horrific news lads and it's frightening that most people don't know what's coming down the tracks.

Government are announcing millions a day in funding for groups. 17 million yesterday willy nilly for outdoor dining.

Squeezed middle are going to be shafted again paying for this.

We, the public, have €128bn in the bank, so I wouldn't be too concerned just yet! It's good to point it out but I doubt they have plans to reach the total if they can avoid it.