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Good economic news thread

Godge

Now that we are at the very least bumping along the bottom rather than falling into a chasm where the economy is concerned, we should probably have a thread that discusses some of the relatively good economic news that appears and whether it represents a trend upwards or a blip in the bumping.

Today we had some Q1 results. First up is the Exchequer Returns:

http://www.rte.ie/news/business/2014/0402/606262-exchequer-returns-march/

for the news item

http://www.finance.gov.ie/news-centre/press-releases/end-march-exchequer-returns

for the actual figures.

Quite good news. Tax is higher than last year and higher than expected. Spending is lower than last year and lower than expected. Taken together that means the budget deficit is lower, down from €3.7 bn to €2.4 bn. We are not out of the woods yet but the outlook is positive.

One of the reasons for the improved performance is that less people are on the dole:

http://www.rte.ie/news/business/2014/0402/606175-live-register-figures-fall-again-in-march/

http://www.cso.ie/en/releasesandpublications/er/lr/liveregistermarch2014/#.UzwylPldW1c

The annual decrease is nearly 34,000 or 8%, the real question is are they taking up jobs? Well, as income tax is up, this may well be the case.

Property prices appear to be on the way up as well,

https://www.daft.ie/report/

but whether this is good or bad news remains to be seen.

All in all, those of us who predicted in the second half of last year that green shoots were appearing and things were about to get better may well be right. Still too early to be definitive about that as the economy is still vulnerable to external shocks and to slack domestic demand.

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eire4

Avatar MIA wrote: »

Speaking of classical lines. What does "live on" mean?

Are there many minimum wage workers expiring?

It means a wage that allows an individual who is working not be be living at or below the poverty line.

I do not know the answer to your second question but I would venture to say those who live in or at the poverty line probably have lower life expectancies.

eire4

Suryavarman wrote: »

"Pouring more money into the economy" possibly the most meaningless phrase ever. What do rich people do with their money? Set it on fire?

Why are you being so stingy by only increasing the minimum wage to ?12 an hour? Why not ?40 p/h? Why not ?100 p/h? If someone isn't productive enough that they can be profitably employed at a higher wage then they aren't going to get that higher wage. It really is that simple.

You also seem to think that people earning minimum wage are poor which isn't correct. The main beneficiaries of minimum wage increases are people in middle and high income households.

Rich people tend to stockpile extra income they get rather then spend it as being rich they already have lots. They tend to hide money off shore in tax havens to avoid taxes. They buy real estate, they buy stocks etc. None of which stimulates the economy where as putting extra money into the pockets of lower income people will see they actually go out and spend a much higher percentage of that extra money in their local economy which does stimulate economic activity.

Certainly a significant number of people are living in or at the poverty line

http://www.irishtimes.com/news/social-affairs/the-living-wage

Suryavarman

Sam Russell wrote: »

The cost of living needs to be reduced and this can be achieved by reducing costs under the control of the state. Bus fares, postage rates, road tax, etc. are all under state control yet they rise and rise because they are cash cows. That is all true, but the argument about minimum wage is another aspect.

However, the lower decile of incomes need more income because they are poor. There is no getting away from that. By increasing the minimum wage these low paid will be better off. There is no reason to suppose much will change if the minimum wage increased because the cost of employing this group at higher earning cannot have a large effect on overall earning because they only represent 10% of the whole population and are paid the least. Lawyers, doctors, accountants and other professionals charge out their time at more per hour than the workers get per week for 40 hours.

The top 10% are paid substantially (hugely) more than the bottom 10%, and a small reduction in their pay would more than pay for the increase of minimum wage. Now I am not suggesting they take a real cut, but it shows the twisted thinking by the wealthy that the minimum wage hits their pockets and it cannot be afforded.

With all due respect you need to get yourself an economics textbook because you're so far off the mark that it'd be impossible to correct you in a Boards post.

eire4 wrote: »

Rich people tend to stockpile extra income they get rather then spend it as being rich they already have lots. They tend to hide money off shore in tax havens to avoid taxes. They buy real estate, they buy stocks etc. None of which stimulates the economy where as putting extra money into the pockets of lower income people will see they actually go out and spend a much higher percentage of that extra money in their local economy which does stimulate economic activity.

Inestment stimulates the economy.

Certainly a significant number of people are living in or at the poverty line

http://www.irishtimes.com/news/social-affairs/the-living-wage

Which isn't an argument for raising the minimum wage if most workers benefiting from a minimum wage increase aren't anywhere near living in poverty.

Charles Babbage

Sam Russell wrote: »

The cost of living needs to be reduced and this can be achieved by reducing costs under the control of the state. Bus fares, postage rates, road tax, etc. are all under state control yet they rise and rise because they are cash cows. .

Is motor tax higher than it used to be? Bus fares rise because the subsidy is reduced, not necessarily because the service costs more.
The State must ensure that its services are efficiently provided, and they are notably more efficient than a decade ago. But they must also ensure competition, Aldi and Lidl have done more for the purchasing power of an Irish salary than a lot of government policies. The government should aim to have Irish prices competitive and they have not done this.

eire4

Suryavarman wrote: »

Inestment stimulates the economy.

QUOTE]

Investment does indeed stimulate the economy when it is money being put into a company as a way or expanding, improving the service product etc. However as I said above rich people when given extra money tend to hide it in tax havens, put it in the stock market, buy real estate etc. rather then spend it in the economy directly. Unlike people of lower incomes who when given extra money will spend a large percentage of that extra money directly in the economy thus making a direct stimulus to the economy.

mickoneill31

So is there any good economic news

This thread seems to be about wages and taxes.

Suryavarman

eire4 wrote: »

Investment does indeed stimulate the economy when it is money being put into a company as a way or expanding, improving the service product etc. However as I said above rich people when given extra money tend to hide it in tax havens, put it in the stock market, buy real estate etc. rather then spend it in the economy directly.

Everything you listed is a form of investment that stimulates the economy.

eire4

Suryavarman wrote: »

Everything you listed is a form of investment that stimulates the economy.

Really, wow so hiding money in tax havens is a form of investment that stimulates the economy. Interesting view you have on what stimulates the economy.
Never mind that putting money into stocks does not stimulate economic activity directly nor does buying real estate. Where as clearly the average person spending extra money directly is a direct stimulus to the economy.

Suryavarman

eire4 wrote: »

Really, wow so hiding money in tax havens is a form of investment that stimulates the economy. Interesting view you have on what stimulates the economy.
Never mind that putting money into stocks does not stimulate economic activity directly nor does buying real estate. Where as clearly the average person spending extra money directly is a direct stimulus to the economy.

Money in a tax haven generally isn't just thrown into a vault, it's invested to earn a return.

Of course buying stocks stimulates the economy. Do you honestly believe that giving companies cash to expand doesn't stimulate the economy?

If nobody bought real estate then builders wouldn't have jobs and there wouldn't be any office space for companies to rent.

eire4

Suryavarman wrote: »

Money in a tax haven generally isn't just thrown into a vault, it's invested to earn a return.

Of course buying stocks stimulates the economy. Do you honestly believe that giving companies cash to expand doesn't stimulate the economy?

If nobody bought real estate then builders wouldn't have jobs and there wouldn't be any office space for companies to rent.

Like I said a very interesting view of how to stimulate the economy you have when you think the rich hiding money in tax havens is a stimulating the economy. Personally I will go with actual direct stimulation of the economy by giving the average person more money in his pocket which he will spend in much higher percentages directly in the economy.

Buying sticks is not a direct stimulus to the economy no. Companies do lots of different things with investments not all of which stimulate the economy never mind direct stimulation. Same applies for buying real estate. If I buy a house or piece of property there were no builders needed if the property is already there.

Again the reality is putting extra money in the pockets of rich people does not directly stimulate the economy as much as putting extra money in the pockets of those on much lower incomes as they will spend directly into the economy a much higher percentage of the extra money then the rich.

Sam Russell

Suryavarman wrote: »

Money in a tax haven generally isn't just thrown into a vault, it's invested to earn a return.

Of course buying stocks stimulates the economy. Do you honestly believe that giving companies cash to expand doesn't stimulate the economy?

If nobody bought real estate then builders wouldn't have jobs and there wouldn't be any office space for companies to rent.

Sorry, that is nonsense. Only buying NEW stocks has any chance of stimulating the economy as in an offering of new shares to fund expansion. If I buy existing Ryanair shares, then only the seller benefits. None of the money transfers to Ryanair. If the seller then buys other shares or simply puts the money into a bank account, then again no money enters the economy (apart from fees) but the share prices of any company involved might rise or fall as a result of these transactions, but again no direct economic activity results.

However, giving someone on the dole or on a SW pension an extra €5 a week will almost certainly be spent immediately in the real economy, giving rise to further economic activity.

Geuze

Suryavarman wrote: »

Of course buying stocks stimulates the economy. Do you honestly believe that giving companies cash to expand doesn't stimulate the economy?

I.

The purchase of shares on the secondary market is simply the transfer of an asset from one person to another.

It is not expenditure.

It is not investing.

It has no direct impact on the economy.

Suryavarman

And people wouldn't buy shares in an IPO if they couldn't later sell them again. Saying that the purchase of shares doesn't play an important role in investment in the economy(and then stimulation of said economy) is just patent nonsense.

Avatar MIA

Has this thread lived beyond its useful life?

FreudianSlippers

Sam Russell wrote: »

Sorry, that is nonsense. Only buying NEW stocks has any chance of stimulating the economy as in an offering of new shares to fund expansion. If I buy existing Ryanair shares, then only the seller benefits. None of the money transfers to Ryanair. If the seller then buys other shares or simply puts the money into a bank account, then again no money enters the economy (apart from fees) but the share prices of any company involved might rise or fall as a result of these transactions, but again no direct economic activity results.

However, giving someone on the dole or on a SW pension an extra €5 a week will almost certainly be spent immediately in the real economy, giving rise to further economic activity.

Geuze wrote: »

The purchase of shares on the secondary market is simply the transfer of an asset from one person to another.

It is not expenditure.

It is not investing.

It has no direct impact on the economy.

Jesus. The grasp on economics is very loose in this thread; I thought this was supposed to be the serious politics forum?

Kitsunegari

Geuze wrote: »

The purchase of shares on the secondary market is simply the transfer of an asset from one person to another.

It is not expenditure.

It is not investing.

It has no direct impact on the economy.

Companies don't own their own shares anyway. So the buying of shares is always just the transfer of an asset from one person to another. The transfer of assets impacts the economy becuase it stimulates it. You also don't typically just buy a share directly from the owner. Brokers are involved who also get their cut. The transaction of shares on the secondary market creates a lot of jobs. How can you say it has no direct impact on the economy at all?

blanch152

Avatar MIA wrote: »

Has this thread lived beyond its useful life?

In a way. In 2014 when it started, good economic news was rare, now it is every week. Some day the tide will turn again and good economic news will be rare again.

fxotoole

Live register sees one of the largest recorded drops: http://www.irishtimes.com/business/economy/live-register-sees-second-largest-monthly-drop-on-record-1.3212807

We're also set to repay €5.5bn to various creditors: http://www.irishtimes.com/business/economy/ireland-to-repay-5-5bn-in-bailout-related-loans-1.3212780

However year-to-date tax take is lower than expected: https://www.irishtimes.com/business/economy/irish-tax-revenue-for-first-eight-months-of-year-200m-below-target-1.3209191

Avatar MIA

fxotoole wrote: »

Live register sees one of the largest recorded drops: http://www.irishtimes.com/business/economy/live-register-sees-second-largest-monthly-drop-on-record-1.3212807

We're also set to repay €5.5bn to various creditors: http://www.irishtimes.com/business/economy/ireland-to-repay-5-5bn-in-bailout-related-loans-1.3212780

However year-to-date tax take is lower than expected: https://www.irishtimes.com/business/economy/irish-tax-revenue-for-first-eight-months-of-year-200m-below-target-1.3209191

I wonder why they've not paid back the UK loans ?

eire4

Avatar MIA wrote: »

I wonder why they've not paid back the UK loans ?

My understanding was there was no benefit financially to doing so. The way those loans were put together we would not save any money with an early re payment.

Sam Russell

Avatar MIA wrote: »

I wonder why they've not paid back the UK loans ?

I think the UK loan in denominated in GBP which has lost 25% in the last two years with more to go. Whatever the interest rate ( I think 5% or so), 12.5% depreciation is much higher. So until GBP sees some upside, we will sit it out.

Avatar MIA

Avatar MIA wrote: »

I wonder why they've not paid back the UK loans ?

https://www.irishtimes.com/business/economy/state-averts-200m-uk-penalty-amid-bailout-refinancing-1.3212780

The Brits would have hit us with 200m early payment penalty. Jeeze, that was nice of them when loaning us as a friendly gesture :pac:

Villa05

Avatar MIA wrote:

The Brits would have hit us with 200m early payment penalty. Jeeze, that was nice of them when loaning us as a friendly gesture

I believe at the time the U.K.loan was at or near the best value

Others have been 're negotiated