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IMF: social welfare benefits 'too high'

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Comments

  • #182
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Farmer Pudsey wrote:
    No the point is that we should not have a overly free supply of credit. twenty years ago you had to save for 2-3 years before you got a loan, you had to save about 20% of the price of the house. When you bought/build the house you then painted it and furnished it in stage not with borrowed money you knew the scarfices you had to make before you started
    Ya that's what I've been saying; that's not incompatible with affordable housing, and keeping that sorted goes a significant way towards reducing the cost of housing.
    AlekSmart wrote:
    I'm afraid that having to "explain" the reality of our current "situation" indicates that our respective positions are poles apart.
    No that indicates condescension whilst deliberately ignoring much of my post, to repeat the same unbacked assertions whilst avoiding any substance.
    AlekSmart wrote:
    I don't "Want" houses to cost more.
    Right, I guess then you didn't say earlier in the thread that property prices are "Not high enough IMO.", no?
    https://www.boards.ie/vbulletin/showpost.php?p=79852661&postcount=83
    AlekSmart wrote:
    And,yes KyussBishop,you are absolutely correct,I do believe that if some astute Politician can magic Ireland out of this morass,then a new generation of the plain Irish people will enthusiastically grasp the Golden Opportunity to "get on the property ladder".

    I don't feel any requirement to support my contention with rafts of statistics,particularly as the fall-out from the failed property-ownership experiment is being more than adequately documented each day in the various Courts dealing with repossessions and commercial judgements.

    It's there,in hi-definition detail for all who wish to see.
    Yes you've completely failed to engage in a substantive debate here, just are repeating the same talking points.

    The high price of property partly had cheap credit as one of the factors, i.e. loans being given out too easily and irresponsibly; that had a direct effect on the price of houses.

    Somehow, you either think prices closer to their base cost are out of most peoples price range (which I don't believe, particularly if you factor in apartments), or that the price of houses will rise far beyond their base value (through a mechanism you have not explained).

    AlekSmart wrote:
    I agree,BUT I suggest that KyussBishops vision will,if taken to it's limits see the Irish State having to continue with various Private Property Ownership rescue packages,and almost certainly having to increase the scope of these to maintain the illusion ?
    This in particular just shows you fail to understand the role of improper lending by banks in the crisis; that is what allowed the massive property bubble, and that is what needs to stay in check in the future to stop another bubble.


  • #183
    djpbarry
    Registered Users, Registered Users 2 Posts: 13,104 ✭✭✭✭djpbarry


    Farmer Pudsey wrote: »
    Yes we do and the biggest offender is the public service devaluing to a punt would not make us poorer yes we would get a short sharpe shock but after that people that are involved ib the export economy would start to make money...
    What about those involved in importing?


  • #184
    djpbarry
    Registered Users, Registered Users 2 Posts: 13,104 ✭✭✭✭djpbarry


    General Atomic wrote: »
    You might make the argument that this measure results in inflation, but given that the money is basically going into bank capital reserves and not into general circulation, this does not end up being the case.
    UK inflation has been well above the EU average for the last 3-4 years.


  • #185
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    djpbarry wrote: »
    What about those involved in importing?

    Wealth is not created by importing and if you are importing raw material and processing it and reexporting the product the value of your currency has no impact on you profits. People bring up the issue of Fuel however any product exported would get back the value of the imported fuel.

    Where we would be ahead is in Tourism a strong euro against sterling and the dollor has decimate this market over the last ten years. Also we export agriculture and fish product which would again rine in value in the new currency.

    I am not saying a devaluation would solve all our problems but handeled in the right way it woul allow us to regain compeditiveness. Also England is our export market and US multinationals firms some of our biggest employers. Multinationals would find it easier to invest as we would have cheaper indigenous costs.


  • #186
    Whiskeyjack
    Registered Users, Registered Users 2 Posts: 277 ✭✭Whiskeyjack


    Cuts to social welfare would be a lot easier to take - prehaps not even needed - if our social welfare system was better implemented. In many areas there are far too many people waiting on payments and far too many others exploiting the system, and just an unnecessary amount of beaurocracy.


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  • #187
    AlekSmart
    Registered Users, Registered Users 2 Posts: 14,002 ✭✭✭✭AlekSmart


    KyussBishop wrote: »
    Ya that's what I've been saying; that's not incompatible with affordable housing, and keeping that sorted goes a significant way towards reducing the cost of housing.

    No that indicates condescension whilst deliberately ignoring much of my post, to repeat the same unbacked assertions whilst avoiding any substance.

    Right, I guess then you didn't say earlier in the thread that property prices are "Not high enough IMO.", no?
    https://www.boards.ie/vbulletin/showpost.php?p=79852661&postcount=83

    Yes you've completely failed to engage in a substantive debate here, just are repeating the same talking points.

    The high price of property partly had cheap credit as one of the factors, i.e. loans being given out too easily and irresponsibly; that had a direct effect on the price of houses.

    Somehow, you either think prices closer to their base cost are out of most peoples price range (which I don't believe, particularly if you factor in apartments), or that the price of houses will rise far beyond their base value (through a mechanism you have not explained).

    This in particular just shows you fail to understand the role of improper lending by banks in the crisis; that is what allowed the massive property bubble, and that is what needs to stay in check in the future to stop another bubble.

    KyussBishop,I'm not sure that "substantive debate" can ever be about anything else other than "talking points".

    You perhaps,may see it as about "winning" or something,but all I'm concerned about is how,if not somehow or other unchecked,Ireland is headed right back towards the universal property ownership principles which figure so largely in our particular version of the recession/depression.

    Your inclusion of the Apartment vs House arguement also appears to be somewhat needless as the issue is primarily about why we "need" to own our own residence.

    Ownership brings with it responsibility,and that responsibility,in residential terms is ongoing and most likely increasing as time passes.

    Large sectors of young Irish people jumped willingly into this property ownership pond,not because they needed to own a home,but because they had been treated to a total-immersion of property ownership marketing which convinced them that serious profit was a racing certainty.

    It appears now to have been all about an absolutely foolproof method of buying an asset,then flipping it on toute-sweet in order to repeat the process on a never ending upward curve.

    The notion that Property Ownership,Irish Style,can be simplified down to a nice low "base value" to recognize the reduced earning capacity of prospective purchasers is worth considering,in a nice fuzzy kind of way,but it's not real.

    I would also take substantive issue with the contention that it all revolves around "Improper Lending" by the banks.

    It remains clear,that by Government Policies of the day,and by the actual demands of their,at times,frenzied customer base Irish Banks lending policies were very "Proper" indeed.

    I guess,it's just not realistic of me to expect any real sea-change in our attitude,as perhaps this is a far deeper issue revolving around some underlying need for the comfort of "our own place",whilst coincedentally failing to realize that ownership of that "own place",and all which that entails,is actually pulling one deeper into the morass.


    Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

    Charles Mackay (1812-1889)



  • #188
    southsiderosie
    Closed Accounts Posts: 6,565 ✭✭✭southsiderosie


    MOD NOTE:

    Can folks drop the housing issue please? It is dragging the thread off-topic.


  • #189
    djpbarry
    Registered Users, Registered Users 2 Posts: 13,104 ✭✭✭✭djpbarry


    Farmer Pudsey wrote: »
    Wealth is not created by importing and if you are importing raw material and processing it and reexporting the product the value of your currency has no impact on you profits. People bring up the issue of Fuel however any product exported would get back the value of the imported fuel.
    But most of the fuel being imported is being consumed in the domestic economy?
    Farmer Pudsey wrote: »
    Where we would be ahead is in Tourism a strong euro against sterling and the dollor has decimate this market over the last ten years.
    Was the entire eurozone’s tourist market decimated, or was it just Ireland’s?
    Farmer Pudsey wrote: »
    Also England is our export market...
    The Eurozone is Ireland’s largest export market.
    Farmer Pudsey wrote: »
    ...and US multinationals firms some of our biggest employers. Multinationals would find it easier to invest as we would have cheaper indigenous costs.
    For a time. But those costs will rise again (pretty quickly if an increase in money supply pushes up inflation) if structural issues are not addressed. Then what? Devalue again? Repeat ad nauseam?

    Devaluing should be considered a last resort – it does nothing other than push problems further down the road. As you’ve hinted at yourself, it doesn’t actually change anything.


  • #190
    General Atomic
    Registered Users, Registered Users 2 Posts: 37 ✭General Atomic


    djpbarry wrote: »
    UK inflation has been well above the EU average for the last 3-4 years.

    2-3% is pretty much exactly what the Euro area inflation rate has been, we're not looking at a Zimbabwe-style problem here. Would it have been better for the UK to go to the IMF looking for bailout money and being saddled with austerity just so they could avoid quantitative easing?


  • #191
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    djpbarry wrote: »
    But most of the fuel being imported is being consumed in the domestic economy?
    Was the entire eurozone’s tourist market decimated, or was it just Ireland’s?
    The Eurozone is Ireland’s largest export market.
    For a time. But those costs will rise again (pretty quickly if an increase in money supply pushes up inflation) if structural issues are not addressed. Then what? Devalue again? Repeat ad nauseam?

    Devaluing should be considered a last resort – it does nothing other than push problems further down the road. As you’ve hinted at yourself, it doesn’t actually change anything.

    I will deal with your reply as a whole rathe that the junivile way people debate/discuss by extract birs and replying in one liners,

    Yes most fuel is used in the domestic economy but the domestic economy would have to adjust, The reason the rest of the eurozone tourism was not effected there two biggest tourist markets was not GB and USA.

    The eurozone as a whole may be our biggest export market now but if we have a weaker currency compared to it then we win.

    If you cared to read the orginal posts on this I made the point that it should be used to imporove our compeditivness, and as a way to cut public sector pay and health and welfare cost in Ireland seeing as how the government is unwilling and has ruled out same.

    The reality is that our indigenour Industries are suffering because of high governmebt costs if we are unwilling to carry out structural changes and we are then we should use a one off devaluation that a move to a new currency would give.


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  • #192
    sarumite
    Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    General Atomic wrote: »
    2-3% is pretty much exactly what the Euro area inflation rate has been, we're not looking at a Zimbabwe-style problem here. Would it have been better for the UK to go to the IMF looking for bailout money and being saddled with austerity just so they could avoid quantitative easing?

    UK inflation has been closer to 3-5% for much of the crisis. Furthermore, the UK may not have called in the IMF, however under their current government they are undergoing austerity measure which aren't far off what Ireland is doing.


  • #193
    Scofflaw
    Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    djpbarry wrote: »
    But most of the fuel being imported is being consumed in the domestic economy?
    Was the entire eurozone’s tourist market decimated, or was it just Ireland’s?

    The world's tourism market has fallen. And the UK is our largest single market in terms of spending, but, again, it's actually secondary to the aggregate European figures, particularly in revenue terms (2011 figures):

    Revenue (€mn) Generated by Overseas Visitors by County – 2011

    County |Total |Britain |Mainland Europe |North America |Other Areas
    Dublin |1220|248|551|228|192
    Carlow |29|7|15|3|3
    Kilkenny |29|8|9|10|1
    Tipperary(South) |41|12|19|7|2
    Waterford |41|15|12|11|3
    Wexford |42|22|12|5|3
    Cork |432|137|153|94|48
    Kerry |186|55|53|55|24
    Clare |99|35|27|33|4
    Limerick |151|36|46|65|5
    Tipperary(North) |17|9|6|2|1
    Offaly (West) |3|1|1|1|0
    Galway |345|38|177|112|18
    Mayo |83|34|29|19|2
    Roscommon |21|10|3|8|1
    Cavan |24|14|3|6|2
    Donegal |54|24|15|14|2
    Leitrim |11|8|2|1|1
    Monaghan |13|9|2|2|0
    Sligo |51|18|26|6|1
    Kildare |47|20|20|5|3
    Laois |11|6|4|0|1
    Longford |7|4|2|1|0
    Louth |36|14|11|4|8
    Meath |51|20|16|7|8
    Wicklow |62|23|21|13|6
    Offaly (East) |15|8|5|1|0
    Westmeath |39|22|10|3|4
    |3160|857|1250|716|343


    Source: http://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/3_Research_Insights/2_Regional_SurveysReports/COUNTY_Numbers_Revenue_11P.pdf?ext=.pdf

    cordially,
    Scofflaw


  • #194
    General Atomic
    Registered Users, Registered Users 2 Posts: 37 ✭General Atomic


    sarumite wrote: »
    UK inflation has been closer to 3-5% for much of the crisis. Furthermore, the UK may not have called in the IMF, however under their current government they are undergoing austerity measure which aren't far off what Ireland is doing.

    Fair enough, it's only recently dropped to EU levels. The UK undertaking austerity measures makes no sense though and it's damaging their economy at the worst possible time. Austerity and deficit reduction are poorly-veiled attempts to pushing conservative ideals with regards to small government and the undercutting of public services.


  • #195
    golden lane
    Registered Users, Registered Users 2 Posts: 1,364 ✭✭✭golden lane


    sarumite wrote: »
    UK inflation has been closer to 3-5% for much of the crisis. Furthermore, the UK may not have called in the IMF, however under their current government they are undergoing austerity measure which aren't far off what Ireland is doing.

    not quite.....pensions and social secutity payments have risen.....so has the tax threshold....

    so they are all slightly better off.......of course there is the employment issue....but the uk is still producing jobs (see how many irish is going there)
    but it is a mistake to compare such a lartge economy....with such a small one...

    there is still a recession......but that is only one of many...


  • #196
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    sarumite wrote: »
    UK inflation has been closer to 3-5% for much of the crisis. Furthermore, the UK may not have called in the IMF, however under their current government they are undergoing austerity measure which aren't far off what Ireland is doing.

    Which is better 3-5% inflation or 3-5% deflation because that is what is staring us in the face unless and is happening in Greece unless either the government starts to do it job or we looks for other ways out.


  • #197
    coolshannagh28
    Registered Users, Registered Users 2 Posts: 1,491 ✭✭✭coolshannagh28


    We urgently need either inflation or a currency devaluation . The structural reforms our economy requires are being ruled out however if push came to shove we would be better to cut PS pay than welfare as far as the indigenous economy is concerned . Most social welfare comes straight back into the economy where PS pay is stored as indicated by the very high rate of saving in the economy 17 % . This storage of capital is postponed demand but in our economy right now stored demand is useless .


  • #198
    ardmacha
    Registered Users, Registered Users 2 Posts: 7,476 ✭✭✭ardmacha


    Most social welfare comes straight back into the economy where PS pay is stored as indicated by the very high rate of saving in the economy 17 % .

    Most PS pay is returned in income tax, levies and the like. Welfare recipients pay no direct taxes, in general. People in the PS might save less, and spend more, if everyone wasn't trying to cut their pay.


  • #199
    djpbarry
    Registered Users, Registered Users 2 Posts: 13,104 ✭✭✭✭djpbarry


    Farmer Pudsey wrote: »
    The eurozone as a whole may be our biggest export market now but if we have a weaker currency compared to it then we win.
    So why isn’t every single country in the world undergoing constant currency devaluation to make itself more competitive?
    Farmer Pudsey wrote: »
    If you cared to read the orginal posts on this I made the point that it should be used to imporove our compeditivness, and as a way to cut public sector pay and health and welfare cost in Ireland seeing as how the government is unwilling and has ruled out same.
    That doesn’t make any sense. All other things being equal, how would currency devaluation make government spending cheaper when government revenue is received in the same devalued currency from the taxpayer?
    Farmer Pudsey wrote: »
    The reality is that our indigenour Industries are suffering because of high governmebt costs...
    Are they? What costs are these?


  • #200
    ardmacha
    Registered Users, Registered Users 2 Posts: 7,476 ✭✭✭ardmacha


    The Euro has devaluated against the dollar, sterling and other world currencies and Irish costs have moderated. Consequently, Irish competitiveness has improved. External factors prevent a rapid growth in trade at present, but perhaps we will again take off like a rocket?

    from Brendan Walsh on Irisheconomy.ie
    Competitiveness%202.png


  • #201
    Farmer Pudsey
    Registered Users, Registered Users 2 Posts: 6,326 ✭✭✭Farmer Pudsey


    djpbarry wrote: »
    So why isn’t every single country in the world undergoing constant currency devaluation to make itself more competitive?
    That doesn’t make any sense. All other things being equal, how would currency devaluation make government spending cheaper when government revenue is received in the same devalued currency from the taxpayer?
    Are they? What costs are these?

    Countries do constantly devalue by letting there currency float as the USA and GB did at the start of this crisis. If we had a currenct that we could float up and down as exporting firms be more compeditive and employ more worker's, there by reducing the cost of welfare and increasing the tax base. The massive cost of highly paid government civi servants which cause us to have high rates and excessive costs of compliance where employers have to deal with lots of difference agencies . The high cost of welfare which makes it very expensive to employ workers.


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  • #202
    djpbarry
    Registered Users, Registered Users 2 Posts: 13,104 ✭✭✭✭djpbarry


    Farmer Pudsey wrote: »
    Countries do constantly devalue by letting there currency float as the USA and GB did at the start of this crisis. If we had a currenct that we could float up and down as exporting firms be more compeditive and employ more worker's, there by reducing the cost of welfare and increasing the tax base. The massive cost of highly paid government civi servants which cause us to have high rates and excessive costs of compliance where employers have to deal with lots of difference agencies . The high cost of welfare which makes it very expensive to employ workers.
    What has the devaluing of sterling done for the UK economy? It's given us inflation and little else. In many ways, the Irish economy is in a better state than the British.

    I am not at all convinced that devaluing a currency yields any significant economic benefit - you can't just conjure prosperity out of thin air. Furthermore, I really don't think that handing control of a currency back to an Irish government is a particularly good idea.

    I'm going to leave this here as it's not entirely relevant to the original topic of the thread.


  • #203
    sarumite
    Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    General Atomic wrote: »
    The UK undertaking austerity measures makes no sense though and it's damaging their economy at the worst possible time. Austerity and deficit reduction are poorly-veiled attempts to pushing conservative ideals with regards to small government and the undercutting of public services.

    The UK can still borrow at a reasonable rate to fund their deficit, partly because they are undertaking efforts to reduce their budget deficit. I am sure they will push their conservative agenda no less than Hollande in France will use 'economic stimulus' to push his liberal agenda. Its what governments do. However, the current state of austerity in the UK is out of necessity, not political convenience.


  • #204
    ardmacha
    Registered Users, Registered Users 2 Posts: 7,476 ✭✭✭ardmacha


    The UK can still borrow at a reasonable rate to fund their deficit, partly because they are undertaking efforts to reduce their budget deficit

    They are not reducing their deficit any more than Ireland is. They have a lower rate of interest because they can print money to repay the loans and because higher inflation is increasing nominal GDP and so mitigating the increase in the debt/GDP ratio.


  • #205
    Tipp Man
    Closed Accounts Posts: 4,025 ✭✭✭Tipp Man


    ardmacha wrote: »
    Most PS pay is returned in income tax, levies and the like. Welfare recipients pay no direct taxes, in general. People in the PS might save less, and spend more, if everyone wasn't trying to cut their pay.

    This had been said a million times but evidently that is not enough

    The PS don't generate tax revenues - that is merely a recycling of the tax revenue generate by the non government economy


  • #206
    sarumite
    Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    ardmacha wrote: »
    They are not reducing their deficit any more than Ireland is. They have a lower rate of interest because they can print money to repay the loans and because higher inflation is increasing nominal GDP and so mitigating the increase in the debt/GDP ratio.

    My reply was relating to whether the UK is undergoing austerity for political or economic reasons. I believe it is the former. The rate at which they are closing their deficit is unrelated to that.

    That said, Ireland cost of borrowing has steadily decreased, whereas the UK is already very low so it doesn't have room to move downwards any more however both have generally been going in the right direction.

    QE was justified under the believe that they could improve liquidity within the economy and by doing so, that it could help get the economy moving again and not as a way of paying back their debt. Deflating the value of ones currency via QE to pay off debts can only work for so long.


  • #207
    Geuze
    Registered Users, Registered Users 2 Posts: 14,529 ✭✭✭✭Geuze


    http://www.oecd.org/document/28/0,3746,en_2649_33729_50404572_1_1_1_1,00.html

    The OECD publish comparative data on benefits and wages, see above.


  • #208
    sarumite
    Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    ardmacha wrote: »
    Most PS pay is returned in income tax, levies and the like. Welfare recipients pay no direct taxes, in general. People in the PS might save less, and spend more, if everyone wasn't trying to cut their pay.

    Its a good thing you are not into making broad stroke generalisations :rolleyes:

    I personally am not in favour of across the board pay cuts in the PS and have never advocated for them on boards.ie. I would prefer the government to abandon the shameful CPA and reintroduce benchmarking. A third round of benchmarking within the PS the long long overdue. The unions have agreed with the principle of benchmarking, the government agreed to it, the general population didn't make any major objections to it twice before. Its a fair and reasonable approach that avoids the moral quagmire of guaranteeing jobs and pay in a recession.


  • #209
    ardmacha
    Registered Users, Registered Users 2 Posts: 7,476 ✭✭✭ardmacha


    Shock 0.7% fall in UK GDP deepens double-dip recession

    The UK is not really a success story. The main difference is that here people know there is a problem. Ireland's construction/house prices have already collapsed and construction will show modest gains in the future, post Olympics UK construction may well reduce significantly. Sterling's increase re the Euro will not help things in Britain either.


  • #210
    sarumite
    Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    ardmacha wrote: »
    Shock 0.7% fall in UK GDP deepens double-dip recession

    The UK is not really a success story. The main difference is that here people know there is a problem. Ireland's construction/house prices have already collapsed and construction will show modest gains in the future, post Olympics UK construction may well reduce significantly. Sterling's increase re the Euro will not help things in Britain either.
    I never said it was a success story. Perhaps it would be nice if you read my posts before posting knee jerk responses.


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  • #211
    Gumbo
    Moderators, Society & Culture Moderators Posts: 40,921 Mod ✭✭✭✭Gumbo


    coolshannagh28 wrote: »
    Most social welfare comes straight back into the economy where PS pay is stored as indicated by the very high rate of saving in the economy 17 % . This storage of capital is postponed demand but in our economy right now stored demand is useless .

    Anything to back this up?
    My PS pay is gone by the night before the next pay day and im afraid i have no savings at present, not even a rainy day fund :(

    But on the bright side, my bills are paid and im paying my mortgage, so im better off than alot of others.


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