Roundabouts and circles

you tricked me into a recession thread with promise of roundabouts :mad:

The government need to indicate their intentions

ilovesleep wrote: »

I have something on my mind a lot lately and it leaves me scared for the future.

You know how there will be though budgets coming up to plug the deficit hole. This will mean taxes and charges and cuts. Is this not going to be counter productive because people will have less to spend in the local economy. This coupled with many people in debt with loans to service. Is it not going to lead to higher unemployment?

Apparently, collectively as a nation we have more than enough in savings to dig us out of the financial hole we are in but with the economy being so insecure naturally people are afraid to spend what they have in the event of becoming redundant themselves/some are waiting for prices to fall further. I'm not saying people should rush out and spend their life savings to save Ireland, far from it, but the government need to create a more stable environment before people will splash out and spend, spend, spend.

Also, are roundabouts not circles?

hidinginthebush wrote: »

Last time I was in Paris I spent about half an hour looking at the carnage here. Roughly 6 lanes, no markings, traffic going in literally every direction. I've heard that if you get car insurance in France you're not insured on the roundabout at the Arc de Triumph since it's so mad!

I drove the Champs-Élysées last year.... jaysus was it a nightmare! Got cut up twice on one roundabout. I was in one of the middle lanes and some van man on the outside decided he wanted to be on the inside and vice versa. Me stuck in the middle not knowing what to do so just continued as if nothing happened, seemed to be the done thing.

I've heard stories that the magic roundabout in Galway is to be replaced with a junction using traffic lights. :mad:

If I may get back on topic for a second: one useful concept is called "counter-cyclical fiscal policy". In plain English: the government should do the opposite of what the rest of the economy is doing.

When the economy is booming, more people are working, and so the government can afford to spend less on e.g. social services - which is fine because more people are working and can afford private health insurance. They should raise more in taxes during a boom, which also serves to slow the boom. e.g. higher property taxes might have prevented the housing boom from happening. (No, I'm not saying that was all there was to it!)

Then, when the boom is over, the government has built up a handy surplus on the balance sheet, which it can use for social services and in infrastructure projects. Less traffic on the roads? Good: fix the roads. And so on.

If that doesn't sound like the last decade, you're spot-on. Some countries did get it right, or just about e.g. Germany, Canada, China, Brazil. The governments in Ireland, the UK, USA, and so on did not practice a counter-cyclical fiscal policy: they did not make hay while the sun was shining. Thanks to tax breaks etc. during the booms, they entered recessions already in the red, and it was only going to get worse. So now they have to borrow from outside to try and spend their way out of recession, and we can see how well that's going: downgrades, higher interest rates on new and existing loans, which is lost money flowing out of the country.