This crisis is NOT the result of government overspending and austerity WONT solve it

murphaph · 01-12-2011 02:07PM

jasonc5432 wrote: »

Cutting lowest income earners takes money out of the economy

Money that has to be borrowed internationally first, of course!

Your solution is boiling down to the old chestnut "tax the rich". The problem is the reverse side of your own coin: poorer people are "trapped" into spending more of their money directly in the Irish economy. Rich people can bugger off to Monaco if the Irish state attempts to remove what they perceive to be too much of their wealth.

You may say "good riddance" but that would be an extreme case of biting off one's nose to spite one's face.

The much maligned Michael O'Leary for example is tax resident in Ireland and pays his income taxes there. The likes of him could easily become another Denis O'Brien off hiding his income somewhere (legally). It's very easy for these people to simply leave.

You want to impose austerity on people who can afford to wave good by to you and go live somewhere warm and pay less tax. The reality is that very wealthy people can't have austerity imposed on them because there's always a country willing to take them in for "modest terms" to get a small slice of their wealth.

Valmont · 01-12-2011 02:10PM

Permabear wrote: »

This post had been deleted.

Says Permabear sitting in his 1970 Dodge Challenger looking at the Cezanne glued to the dashboard... This is getting ridiculous!

Despite the troubles of any and all attempts to 'redistribute' wealth, it is still viewed as a large fixed pie under the control of various persons. Nevermind the oven that gave us this pie or how it works of course, who cares about that, I just want a piece.

jasonc5432 · 01-12-2011 02:11PM

Permabear wrote: »

This post had been deleted.

Right -- as per the emphasis. Nonsense. Re read the post.

As per government wastage -- under FF and FG, yes I fully agree, much money is wasted -- e.g.
-Berties gigantic pension
-bailing out banks
-bailing out unsecured bondholders
-gigantic salaries to those in government
-gigantic salaries to CEOs in semi states
-Nationalised banks paying bank executives GIGANTIC salaries, pension contributions, and bonuses.

As per private sector non-wastage as a rule -- take a look at Anglo irish bank, Quinn insurance, Nationwide, many private pension fund investment companies (private!) etc etc etc

zero_hope · 01-12-2011 02:18PM

Permabear wrote: »

This post had been deleted.

Buying and selling stock creates ZERO new capital for a company to invest. For a company to get more money through equities they have to issue more equities and thereby dilute the stock price.

Permabear · 01-12-2011 02:33PM

This post has been deleted.

jasonc5432 · 01-12-2011 02:40PM

zero_hope wrote: »

Buying and selling stock creates ZERO new capital for a company to invest. For a company to get more money through equities they have to issue more equities and thereby dilute the stock price.

But why let the truth get in the way of a convenient rich-loving lie?

It hasn't been the trend up to now. And I dont see it being the trend from now on.

Just like people saying high income earners pay most tax, even though millions, often times, of their income is not taxed, via pension schemes etc.
Thus-- the portion of income that IS taxed appears high, when in reality, the proportion of their income that is not considered (pension lump sums, expenses) often amount to millions (in bank executive examples). Thus, top earners' REAL incomes, are taxed to considerably smaller proportions than say someone on 60k.

Again though, why let the truth get in the way of handy lies?
Reality does not belong in this discussion, only neoliberal theory and misinformation

Dr Galen · 01-12-2011 03:37PM

jasonc5432 wrote: »

But why let the truth get in the way of a convenient rich-loving lie?

It hasn't been the trend up to now. And I dont see it being the trend from now on.

Just like people saying high income earners pay most tax, even though millions, often times, of their income is not taxed, via pension schemes etc.
Thus-- the portion of income that IS taxed appears high, when in reality, the proportion of their income that is not considered (pension lump sums, expenses) often amount to millions (in bank executive examples). Thus, top earners' REAL incomes, are taxed to considerably smaller proportions than say someone on 60k.

Again though, why let the truth get in the way of handy lies?
Reality does not belong in this discussion, only neoliberal theory and misinformation

I'm not quite sure I follow you tbh?

Can you provide some proof/links/backup to what I think you are asserting in the above post?

Cheers

DrG

Soldie · 01-12-2011 03:37PM

Raskolnikov wrote: »

Our structural deficit is certainly a problem, but it is nothing compared to the sheer size of the banking bailout. Saving the Irish banks and bondholders has cost taxpayers 43% of GDP, an astronomical figure and hasn't been matched by any country in the Western world. The austerity that has brought about increased taxation has also generated a reverse multiplier effect (money ordinarily being circulated in the economy is now leaving the country to pay interest). This itself has fed back on GDP, creating a loop.

Our natural structural deficit is about 5%, a figure that isn't far off the likes of Holland (6%), Germany (4%), etc.

You have it the wrong way around. €50bn of the €85bn bailout was/is to go towards financing the deficit for the next four years, whereas €10bn went towards recapitalising the banks. We weren't bailed out because of the state of our banks; we were bailed out because our public finances were (and still are) in tatters, hence the EU/IMF's oversight of our fiscal policy as a bailout clause. We could have staved off the bailout if the Fianna Fáil/Green Party coalition had implemented the necessary cuts/taxes to narrow the deficit as soon as it became clear our economy had nose-dived. Instead they dithered endlessly, and that's what brought the EU/IMF to our door.

jasonc5432 · 01-12-2011 04:01PM

Soldie wrote: »

You have it the wrong way around. €50bn of the €85bn bailout was/is to go towards financing the deficit for the next four years, whereas €10bn went towards recapitalising the banks. We weren't bailed out because of the state of our banks; we were bailed out because our public finances were (and still are) in tatters, hence the EU/IMF's oversight of our fiscal policy as a bailout clause. We could have staved off the bailout if the Fianna Fáil/Green Party coalition had implemented the necessary cuts/taxes to narrow the deficit as soon as it became clear our economy had nose-dived. Instead they dithered endlessly, and that's what brought the EU/IMF to our door.

The public finances are in tatters because we bailed out the banks

Soldie · 01-12-2011 05:10PM

jasonc5432 wrote: »

The public finances are in tatters because we bailed out the banks

The bailing out of the banks has added to our debt, not to our deficit. And most of our debt can be attributed to money that the government borrowed in order to fund our public finances.

K-9 · 01-12-2011 06:00PM

jasonc5432 wrote: »

The public finances are in tatters because we bailed out the banks

And are running a huge deficit.

It's pointless pretending it has nothing to do with day to day spending.

The proof is that now that it seems all the bank funding has been spent, we are still running a huge deficit every year and its causing big problems to reduce it.

As for McWilliams, he did recommend the guarantee scheme and said Dublin would become a huge international finance centre. The excuses don't make much sense to me, perfect example of why economists usually don't make good politicians.

ed2hands · 01-12-2011 06:22PM

Dr Galen wrote: »

I'm not quite sure I follow you tbh?

Can you provide some proof/links/backup to what I think you are asserting in the above post?

Cheers

DrG

http://www.swp.ie/features/tax-dodges-rich/1708

jasonc5432 · 01-12-2011 06:23PM

K-9 wrote: »

And are running a huge deficit.

It's pointless pretending it has nothing to do with day to day spending.

The proof is that now that it seems all the bank funding has been spent, we are still running a huge deficit every year and its causing big problems to reduce it.

As for McWilliams, he did recommend the guarantee scheme and said Dublin would become a huge international finance centre. The excuses don't make much sense to me, perfect example of why economists usually don't make good politicians.

Our spending is gigantic. I agree. Ways to cut it

-Ministerial pensions
-CEO salaries and bonuses in semi states
-Bailouts
-Bondholder payments, when bonds are unsecured
-Haircuts for senior bonds
-Cutting salaries, pensions to state owned firm execs and boards e.g. banks
-A new top rate band for taxation of top earners (e.g. 150k plus)
-Cut salaries to top earners in health service (e.g. consultants), education (e.g. university deans)
-Nama payments to developers

There are plenty more.

Chucky the tree · 01-12-2011 06:41PM

jasonc5432 wrote: »

Our spending is gigantic. I agree. Ways to cut it

-Ministerial pensions
-CEO salaries and bonuses in semi states
-Bailouts
-Bondholder payments, when bonds are unsecured
-Haircuts for senior bonds
-Cutting salaries, pensions to state owned firm execs and boards e.g. banks
-A new top rate band for taxation of top earners (e.g. 150k plus)
-Cut salaries to top earners in health service (e.g. consultants), education (e.g. university deans)
-Nama payments to developers

There are plenty more.

Can you provide figures of how much it will save?

jasonc5432 · 01-12-2011 06:47PM

Chucky the tree wrote: »

Can you provide figures of how much it will save?

Not paying the recent unsecured bondholder amount of just under 800million would have saved just under 800 million.

K-9 · 01-12-2011 06:47PM

jasonc5432 wrote: »

Our spending is gigantic. I agree. Ways to cut it

-Ministerial pensions
-CEO salaries and bonuses in semi states
-Bailouts
-Bondholder payments, when bonds are unsecured
-Haircuts for senior bonds
-Cutting salaries, pensions to state owned firm execs and boards e.g. banks
-A new top rate band for taxation of top earners (e.g. 150k plus)
-Cut salaries to top earners in health service (e.g. consultants), education (e.g. university deans)
-Nama payments to developers

There are plenty more.

Pensions, yeah a 20% cut saves a few hundred thousand.

There isn't expected to be any more bailouts and most of the bondholder payments are covered from funds already provided.

Cutting exec pay, bonuses, probably save tens of millions alright.

Top rate band, yeah. You realise you're cutting their pay though so you could well end up with less receipts?

Last 2, wont save a fortune really.

So, that's all the populist stuff out of the way. What do we do now?

http://www.irishtimes.com/newspaper/breaking/2011/1104/breaking44.html

Need about €16.2 Billion, near enough the annual Public Sector pay bill.

Permabear · 01-12-2011 06:48PM

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jasonc5432 · 01-12-2011 06:51PM

Permabear wrote: »

This post had been deleted.

Ireland's credibility with the bond markets?
baaaaaaaaaaaaaaaaaaaaaaaahahahahahahahahahahah

I saw it the other day just before flushing the toilet.

I love this nonsense too -- that "ah well, sure if we tax the rich it will only raise X, which is not enough, so lets not bother taxing the richest at all, in fact lets give them money, via bailouts, nama's etc"

Gimme a break lads. Let's continue this discussion in a year's time. We'll have an annual interim report to see just how wrong ye are. It's roughly a decade of right wingers being almost wholly wrong.. sure ye dont fancy stopping now lads?

See ya

Chucky the tree · 01-12-2011 06:53PM

jasonc5432 wrote: »

Not paying the recent unsecured bondholder amount of just under 800million would have saved just under 800 million.

So you basically have no clue how much that will save? Rightio.

jasonc5432 · 01-12-2011 06:57PM

Chucky the tree wrote: »

So you basically have no clue how much that will save? Rightio.

Ermmmm .. on that count... eh... 800 mil... as i quite clearly said.

Anyways, too much right wing unreality in here. Bigger fish to fry

Chucky the tree · 01-12-2011 06:59PM

jasonc5432 wrote: »

Ermmmm .. on that count... eh... 800 mil... as i quite clearly said.

Anyways, too much right wing unreality in here. Bigger fish to fry

€800m of our €16bn deficit is fixed then. Well that's brilliant Jason, all the lower inome people are now saved from cuts because now we only have a €15.2bn deficit.

Permabear · 01-12-2011 07:01PM

This post has been deleted.

K-9 · 01-12-2011 07:08PM

jasonc5432 wrote: »

Ireland's credibility with the bond markets?
baaaaaaaaaaaaaaaaaaaaaaaahahahahahahahahahahah

I saw it the other day just before flushing the toilet.

I love this nonsense too -- that "ah well, sure if we tax the rich it will only raise X, which is not enough, so lets not bother taxing the richest at all, in fact lets give them money, via bailouts, nama's etc"

Gimme a break lads. Let's continue this discussion in a year's time. We'll have an annual interim report to see just how wrong ye are. It's roughly a decade of right wingers being almost wholly wrong.. sure ye dont fancy stopping now lads?

See ya

So you haven't a clue about how much your ideas would save or bring in and when somebody points out it isn't that much in the overall €16 Billion scheme of things, you resort to insults.

I never said I don't agree with your ideas, it just isn't enough, and no amount of moaning about bondholders is going to make it enough.

Liam Byrne · 01-12-2011 07:55PM

Chucky the tree wrote: »

€800m of our €16bn deficit is fixed then. Well that's brilliant Jason, all the lower inome people are now saved from cuts because now we only have a €15.2bn deficit.

Well, logically speaking they'd be saved 5% of the cuts and/or taxes, and when you're on "lower income" every little helps....that 5% could easily be the cost of a healthy meal for the kids.

Add in all of the other unnecessary spending and waste and you'd make a big difference.

But then, any such logical argument is unlikely to register with anyone who can dismiss the complete waste of €800 billion as not being useful.

You do realise that that's €200,000 for everyone in the country, right ? Money that those bondholders lost through their own decisions and which had nothing whatsoever to do with the vast majority of people who are being forced to foot the bill ?

Dr Galen · 01-12-2011 07:58PM

ed2hands wrote: »

http://www.swp.ie/features/tax-dodges-rich/1708

I'd be asking for something a little les biased than that tbh. If this all you can come up with, fair enough, but be prepared to stand over the story and the figures you are providing. Once you can do that, we're golden.

So can further proof be provided?

btw for clarity, I'm not asking as a poster, I'm asking as a Mod of the forum

jasonc5432 · 01-12-2011 08:04PM

Liam Byrne wrote: »

Well, logically speaking they'd be saved 5% of the cuts and/or taxes, and when you're on "lower income" every little helps....that 5% could easily be the cost of a healthy meal for the kids.

Add in all of the other unnecessary spending and waste and you'd make a big difference.

But then, any such logical argument is unlikely to register with anyone who can dismiss the complete waste of €800 billion as not being useful.

You do realise that that's €200,000 for everyone in the country, right ? Money that those bondholders lost through their own decisions and which had nothing whatsoever to do with the vast majority of people who are being forced to foot the bill ?

Liam, you must remember that the right wing will fight TOOTH AND NAIL to have 8Euro taken off the poorest in society -- people who really need that 8euro.

Yet, they dont give a flying fart about 800million to secondary market unsecured bondholders (the equivalent of a 100 to 1 bet in a bookies).

It says it all about their socio-pathology for the most vulnerable, and their servile attitudes towards the richest

Tipp Man · 01-12-2011 08:09PM

Liam Byrne wrote: »

Well, logically speaking they'd be saved 5% of the cuts and/or taxes, and when you're on "lower income" every little helps....that 5% could easily be the cost of a healthy meal for the kids.

Add in all of the other unnecessary spending and waste and you'd make a big difference.

But then, any such logical argument is unlikely to register with anyone who can dismiss the complete waste of €800 billion as not being useful.

You do realise that that's €200,000 for everyone in the country, right ? Money that those bondholders lost through their own decisions and which had nothing whatsoever to do with the vast majority of people who are being forced to foot the bill ?

Liam i think your maths are a little bit off there

Firstly i assume the 800 Billion you refer to is in fact the 800 million (thought it was 750 but whats 50m these days) that was paid to bondholders there a couple of weeks ago

Secondly if this is what you refer to then EUR 800m divided by circa 4.5m people is EUR 177 per person in the country not EUR 200,000 per person

Permabear · 01-12-2011 08:20PM

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Medu · 01-12-2011 08:25PM

All I see is an article arguing about issues that don't really matter anymore- yes they will be important history lessons but not in solving the current crisis. Yes the 'private sector' borrowed too much(mainly driven by government policy) but now governments are also having to taken on too much borrowing to make up for the mistakes of the last 10 years.

He says that austerity isn't the answer but if you could get a straight answer from the guy then he would say austerity for EVERYONE in the eurozone is the answer. His solution: print money, write down debt and make everyone not in debt pay for those that are. Not a very nice solution for a lot of people, great for others and tbh is it's probably what will end up happening but Germany are just trying to get everyone else to get their house in order before they let them off the hook.

jasonc5432 · 01-12-2011 08:34PM

Tipp Man wrote: »

Liam i think your maths are a little bit off there

Firstly i assume the 800 Billion you refer to is in fact the 800 million (thought it was 750 but whats 50m these days) that was paid to bondholders there a couple of weeks ago

Secondly if this is what you refer to then EUR 800m divided by circa 4.5m people is EUR 177 per person in the country not EUR 200,000 per person

The above is correct.

But Liam's principle still stands.

Circa 200 euro for every man woman and child to unsecured bondholders of bonds bought on secondary markets is ludicrous.

This crisis is NOT the result of government overspending and austerity WONT solve it

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