The Recession......your solutions?

Suryavarman wrote: »

What about peoples savings?

I am sick of people using this as a cop out tough in my opinion.When you deposit money in a bank your making an investment that is why you get paid interest.If the bank collapsed tough keep your money in a safe next time

Hold all foreigners hostage and sell them back to their country for €500,000 each, problem solved.

Not so much of a Solution as Prevention: for the government economic types to have a general understanding of Keynes' ideas. Particularly the need for a countercyclical fiscal policy. In plain English, you'd say "make hay while the sun shines".

• The first step is recognise that "the sun is shining". In other words, for the government to understand that a boom is underway, and be prepared to say so.
• What should the government do in a boom? "Make hay" i.e. that is the time for them to build up their reserves, in anticipation of the coming bust. That means increasing taxes, of course.
• Working against the boom can also serve to moderate the boom - take some of the wind out of its sails. For example: had banks been taxed more, they would have increased their mortgage rates, and slowed down the reckless lending we had.
• Then, when the inevitable bust comes, the government has the resources to step in and keep the economy going, as the private sector withers. That is the time to fix the bridges, build rail lines, and all those other "big jobs" we expect governments to do for us.

I know there's a problem with that: saying "we're in a boom" carries the (justified) implication that there will be a "bust". Not what people want to hear from the government in the good times, is it? Even if it is the right thing to say. There is another reason why "laissez-faire" economists and conservative politicians don't like such theories: they require a government that is large enough, and with enough control, to actively intervene in the economy. The "Tea Party" in the USA want no such government at all, and no taxes; Ron Paul wants the US Federal Government to disappear entirely.

I can see their point, but the alternative is the "natural" cycle of boom and bust". Yes, "natural", since that's what happens in nature too, with populations of predators and prey e.g. foxes and rabbits. Or the plagues of locusts that occasionally ravage huge swathes of Australia. It happens to human populations, too - what is a Famine other than the Bust after the population Boom?

Had the Irish government called "boom!" in 2004, and started preparing for a bust by building up a surplus, we could have avoided the bust, or at least made it much less severe. Prevention is always better than cure - and if you can't prevent, prepare. The Irish government, like so many others, did neither.

Benny_Cake wrote: »

In 2004 the government could have taken steps such as banning 100% mortgages, and could have avoided additional cuts in non-property related taxes. This would have taken some of the heat out of the boom, instead they did the exact opposite.

I don't think 100% mortgages were a direct cause of trouble, but rather a symptom of a more serious problem: the Commoditisation of mortgages. This led to a disconnect between the sellers of mortgages (banks and mortgage brokers) and the final owners of the mortgage debt (buyers of mortgage-backed securities). It meant that mortgage sellers could see immediate profits, and were thus had the incentive to sell more and larger mortgages, to customers who would not have qualified under the "old" rules. As I keep having to say: the value of something is what someone is willing and able to pay for it - and so house prices went through the roof. The willingness to pay inflated prices was not new, but the ability to pay those prices was new.

Yeah, stop paying debts to bailout the banks/bondholder thieves.

We need to create an indigenous economy, somethign that will generate money through export. We need it to be 100% Irish and that large numbers of Irish people will be emnployed and return home to get work in it. Microcosmically Aberdeen, due to oil, is a wealthy town it is in some ways self sustaining, the people spend their money in Aberdeen and the town thrives.

Ireland has a population that is the same as the greater Manchester area, it's not huge.

I think Ireland needs to shut down all the science Departments in the Universities and IT's over time and open a dedicated University geared only top scientific study, like MIT in Boston. Ensure that the graduatesa nd thier work stays within Ireland through all possible means, because those breakthroughs will power the economy into the future. Look at food tech in Cork, it's amazing now but in a few years due to it's small size all that knowledge will be lured away and the programme will atrophy. If that programme was happening in a dedicated, massive campus you could potentially build an industry on it. Ireland is too small to have sometihng as important as the study of science decentralised.

I am an Arts graduate by the way, I have no vested interest save for the good of the state.

bnt wrote: »

Not so much of a Solution as Prevention: for the government economic types to have a general understanding of Keynes' ideas. Particularly the need for a countercyclical fiscal policy. In plain English, you'd say "make hay while the sun shines".

• The first step is recognise that "the sun is shining". In other words, for the government to understand that a boom is underway, and be prepared to say so.
• What should the government do in a boom? "Make hay" i.e. that is the time for them to build up their reserves, in anticipation of the coming bust. That means increasing taxes, of course.
• Working against the boom can also serve to moderate the boom - take some of the wind out of its sails. For example: had banks been taxed more, they would have increased their mortgage rates, and slowed down the reckless lending we had.
• Then, when the inevitable bust comes, the government has the resources to step in and keep the economy going, as the private sector withers. That is the time to fix the bridges, build rail lines, and all those other "big jobs" we expect governments to do for us.

I know there's a problem with that: saying "we're in a boom" carries the (justified) implication that there will be a "bust". Not what people want to hear from the government in the good times, is it? Even if it is the right thing to say. There is another reason why "laissez-faire" economists and conservative politicians don't like such theories: they require a government that is large enough, and with enough control, to actively intervene in the economy. The "Tea Party" in the USA want no such government at all, and no taxes; Ron Paul wants the US Federal Government to disappear entirely.

I can see their point, but the alternative is the "natural" cycle of boom and bust". Yes, "natural", since that's what happens in nature too, with populations of predators and prey e.g. foxes and rabbits. Or the plagues of locusts that occasionally ravage huge swathes of Australia. It happens to human populations, too - what is a Famine other than the Bust after the population Boom?

Had the Irish government called "boom!" in 2004, and started preparing for a bust by building up a surplus, we could have avoided the bust, or at least made it much less severe. Prevention is always better than cure - and if you can't prevent, prepare. The Irish government, like so many others, did neither.

Who the fcuk is Keynes?