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Inflation - What do you think the Government should do?

  • 25-01-2022 3:29pm
    Registered Users Posts: 1,710 ✭✭✭ highgiant1985

    Listening to the Leaders' Question and the focus of the discussion so far has been about inflation. Source:

    I'm definitely noticing the pinch recently in terms of costs increases and I'm sure others are the same. The discussion is quite depressing to be honest though with a lot of posturing and hot air from both sides but very little in the way of ideas.

    So I wanted to open it open here for discussion and see what others think, what practical measures do people think the Government could or should take to tackle the issue of inflation?

    It's easy to say the Government should do more but what does that mean specifically. Being honest I've no idea myself so I'm just interested in hearing ideas from others on what might be practical solutions to the issue.



  • Registered Users Posts: 1,532 ✭✭✭ Multipass

  • Registered Users Posts: 32,140 ✭✭✭✭ is_that_so

    CB governor looking at it being above 2% for the year and likely to go below 2% in 2023 and 2024. Interest rates are traditionally an option but ECB have bigger fish to fry and post-COVID a rate hike would be slightly insane. So in answer to the OP, nothing but definitely look at easing off on that very high spending.

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  • Registered Users Posts: 683 ✭✭✭ TallGlass2

    Abolishing USC be a start....

  • Registered Users Posts: 9,049 ✭✭✭ buried

    Wealth Tax on the super rich including corporates.

    "Lunar South is Solar East" - W. B. Yeats

  • Registered Users Posts: 901 ✭✭✭ usernamegoes

  • Registered Users Posts: 11,367 ✭✭✭✭ Danzy

    The interest rates from the ECB are already insane, have been for years, a giant financial experiment and a story of significant global importance. Hikes being insane is only in response to the previous madness.

    It's become a roundabout that the Eurozone will find hard to get off.

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  • Registered Users Posts: 11,367 ✭✭✭✭ Danzy

    Nuclear has one big problem.

    Its cost, every other source of energy is improving in cost and is already cheaper. Nuclear remains stupidly expensive and appears to be getting worse.

    People who argue for nuclear as an energy security issue or because it is a source of vast and low carbon energy, have points, the cost is then secondary and in that regard a very strong argument can be made and is worth considering but the financial side would still be insanely expensive.

    Germany closing it's Nuclear and coal plants so quickly was a significant mistake.

  • Registered Users Posts: 200 ✭✭ Perseverance The Second

    At the sametime it's also fairly consistent energy source especially from a price perspective. You are not at the whims of international markets for Gas price fluctuations. It helps a lot of businesses and people in general if they can have consistency.

    We could have made the same argument about sustainable energy sources in terms of initial expense. Chances are that with more investment comes with greater efficiency down the line.

    Nuclear can at least step in when renewables are impacted by fluctuations.

  • Registered Users Posts: 4,426 ✭✭✭ maestroamado

    do nothing... the market will decide...

  • Competitiveness due to wage increases was not a issue in the boom as much as the employers representatives wanted you to believe it was

  • Registered Users Posts: 4,864 ✭✭✭ c.p.w.g.w

    The last time we have inflation of this nation, didn't the government do saving schemes to remove money from the economy to brings inflation under control...

    But is current inflation being driven by world wide supply chain and post/current pandemic issues

  • Registered Users Posts: 854 ✭✭✭ Viscount Aggro

    Easiest way is for individual households to cut back, consume less of whats driving inflation.

  • Registered Users Posts: 388 ✭✭ tommybrees

    The less government do the better. Unless they wanna reduce taxes.

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  • Registered Users Posts: 11,367 ✭✭✭✭ Danzy

    Nuclear has a place in a continental market, it's consistently the dearer option bar none and it's not even close, with subsides removed it's still the worst cost wise.

    Sustainable energy is fine but the speed of transition but no speed in the sustainability of the energy network, ie back up, Infrastructure, planned phasing out of old plants not gimmicks for headlines that's been a disaster.

  • Registered Users Posts: 819 ✭✭✭ Citrus_8

    That would enable purchasing power which would fuel inflation more. We need the opposite now to stabilise the economy. There are a few approaches. Ireland is a small market, influenced by bigger markets - it's possible to leave things as they are and they will stabilise in time. It's a conservative way, usually, taking longer to see the result but also less risky.

    A problem is that Irish culturally are very low in Long Term Orientation and also low in Uncertainty Avoidance, comparing to other European countries. So, a quick result but also uncertain future is ok for Irish. Which is not good for future planning. It doesn't encourage politicians to make some drastic decisions even if a result these days would be negative for a short period of time but in a long term it would bring a positive result.

    We can increase VAT to reduce purchasing power (would help to reduce demand which would help for supply and deflate prices a bit) but that's currently too risky as it would also create problems for those businesses which have suffered during the lockdowns.

    We have a problem that people have a lot of savings. Preferably, we want this money to circulate in the market to keep the economy going. However, when inflation is high, that's opposite - we want to slow down spendings to stabilise demands and help for supply.

    It's a bit like a devils circuit at the moment, until supply will feed a demand and until covid will not make such a big impact for global economies. This may take 1-2 years, depending on the industry and subject to any further lockdowns, disturbances etc. I would predict that overall for economy to settle it could take 3-5 years from the end of the first lockdown.

    Post edited by Citrus_8 on

  • Registered Users Posts: 819 ✭✭✭ Citrus_8

    How reducing VAT would help? If that would reduce prices, it would increase a demand and further increase the inflation. We need an opposite result now. Carbon tax increase was planned and known to everyone for a long time already. This to reduce demand for products, harmful to the planet. This is one of the long term decisions, which gives us a negative result in a short term. But in the long term it's a positive tax.

    Lots of NGOs are doing a great job, many of them are vital to poor and more vulnerable members of society. Better to increase governments' spendings to the health and educations systems, also to the infrastructure, especially a public transport. But again, that's too hard to understand to some who are too much focused to the short term "solutions".

  • Registered Users Posts: 4,002 ✭✭✭ enricoh

    Leo today called on employers to increase wages. The minimum wage is gone up again this year, an extra bank holiday from now on too for employers also.

    It all feeds into making us uncompetitive. Was reading today a coalman in Wexford saying with carbon tax increasing lads will head north and load up vans. If lads will go from Wexford there's no hope for lads near the border

  • Registered Users Posts: 3,647 ✭✭✭ joseywhales

    I think you need to account for timing. If we invest in nuclear now, it may be online in 20-30 years. By that time I think the economics of energy will look very different.

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  • Registered Users Posts: 11,367 ✭✭✭✭ Danzy

    It will but the long term picture is worse for nuclear. Solar energy costs are dropping exponentially and they are already cheap.

    There are many experimental Nuclear reactors offering hope for the sector and sound promising but commercial application, if possible, is not going to happen in the next 20 years.

    Wouldn't it be Great though, China have a new Thorium reactor, powers 2k houses but it is experimental, who knows.