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Austerity isn't really working is it?

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    #542
    Bullseye1
    Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    And that's the crux of the matter. Governments in general are incapable of running a country without a deficit even one acceptable to the EU (3%). So not only are they responsible for wasting our taxes but they borrow to waste more.


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    #543
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Anynama141 wrote: »
    Ok Kyuss - to summarise your position:

    1. There is an alternative to austerity - but it requires an organisation that doesn't exist and doesn't seem likely to exist any time soon.

    2. Debt raised through this proposed USE club we would be members of is not debt that we have to repay - someone else will repay it for us.
    No, you're trying to misrepresent me again, and you know it. You know I never said, that we would not have to repay debt.

    Again, from my last post:
    KyussBishop wrote: »
    I've explained in detail the sustainability of EU-wide debts, and how they are not simply like expanding our national debt.

    Do you claim they are unsustainable? (don't bother if you're going to straw-man them as being precisely the same as national debt; I've explained the differences)
    I have explained in detail how EU-wide debts would function, do you claim they are unsustainable, for either the EU or any member states? (and again, please give it an honest answer, not the usual straw-men)


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    #544
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    Bullseye1 wrote: »
    And that's the crux of the matter. Governments in general are incapable of running a country without a deficit even one acceptable to the EU (3%). So not only are they responsible for wasting our taxes but they borrow to waste more.
    Yes, I don't understand this idea that nations should carry such massive debt on a continuous basis - I can understand running up 10-20% debt/GDP during a recession, but only if you pay it back down again as the economy recovers. Running debt at 80%+ of GDP means you are walking a tightrope the whole time.


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    #545
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    KyussBishop wrote: »
    No, you're trying to misrepresent me again, and you know it. You know I never said, that we would not have to repay debt.
    Ok, so you are saying we DO have to repay the EU debt, plus our own debt - and that somehow this adds up to less debt. :confused:
    KyussBishop wrote: »
    I have explained in detail how EU-wide debts would function, do you claim they are unsustainable, for either the EU or any member states? (and again, please give it an honest answer, not the usual straw-men)
    Honest answer - I'm certain a reasonable level of debt would be sustainable, provided that you could convince taxpayers in Germany, Netherlands, Austria, Finland etc. that it's a good idea that they should be put on the hook for money spent on the PIIGS.

    Good luck with that bit. :)


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    #546
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Anynama141 wrote: »
    Honest answer - I'm certain a reasonable level of debt would be sustainable, provided that you could convince taxpayers in Germany, Netherlands, Austria, Finland etc. that it's a good idea that they should be put on the hook for money spent on the PIIGS.

    Good luck with that bit. :)
    Right there we go, the EU-wide debts would be sustainable.

    Moreso, we can pay the full amount of our debts in the end as well (spread out over time if need be), with the EU giving ample tools to make that easier for us.

    This would not be possible with national debt, it is with EU-wide debt; therefore they are both completely different forms of debt, and it is not just like piling on money to our national debt.


    So with that acknowledged, it pretty much makes all debt-based arguments contesting this irrelevant now, since 1: it is inherently sustainable, and 2: still end up being able to pay our whole debt load over time, and 3: even reach economic recovery to boot.


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    #547
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    KyussBishop wrote: »
    Right there we go, the EU-wide debts would be sustainable.
    A certain level of debt would be sustainable for a certain period, assuming you could get the thing off the ground (you can't) and assuming the poorly-managed countries didn't screw over the well-managed countries (and they would).
    KyussBishop wrote: »
    Moreso, we can pay the full amount of our debts in the end as well (spread out over time if need be), with the EU giving ample tools to make that easier for us.

    This would not be possible with national debt, it is with EU-wide debt; therefore they are both completely different forms of debt, and it is not just like piling on money to our national debt.
    Um...it is like it - with the difference that we might have to pay back debts that we never even incurred in the first place!
    KyussBishop wrote: »
    So with that acknowledged, it pretty much makes all debt-based arguments contesting this irrelevant now, since 1: it is inherently sustainable, and 2: still end up being able to pay our whole debt load over time, and 3: even reach economic recovery to boot.
    Nice try. Adding debt to debt still means more debt, and you still have to deal with the fact that such an arrangement is impossible to implement in Europe in the absence of some sort of dictatorship.


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    #548
    Three Seasons
    Banned (with Prison Access) Posts: 548 ✭✭✭Three Seasons


    With this Eurobonds plan which of the following is true?

    1. The Irish government will have extra debt to pay back ( even if it is a Eurobond debt).

    2. The Irish government won't have to pay back extra debt as other governmnents will pay it for us.


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    #549
    darkhorse
    Closed Accounts Posts: 2,274 ✭✭✭darkhorse


    Noreen1 wrote: »
    I doubt it tbh.

    The fact that IBRC was wound up before a challenge to the legality of the Bailout, which was supported by TDs, suggests that the new party doesn't want the status quo interrupted. For all the pre-election waffle they spouted.

    Quite the contrary. If DDI does ever get into power, part of their mission statement is to change the status quo. What waffle did they spout, anyway, to make you think that things would remain the same?


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    #550
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Anynama141 wrote: »
    A certain level of debt would be sustainable for a certain period, assuming you could get the thing off the ground (you can't) and assuming the poorly-managed countries didn't screw over the well-managed countries (and they would).
    If it were implemented, there's not really any reason it wouldn't get off the ground. Poor countries wouldn't be able to screw over other countries either, as the EU is in control of the debt and the investments.
    Anynama141 wrote: »
    Um...it is like it - with the difference that we might have to pay back debts that we never even incurred in the first place!
    No, it isn't, and I've explained in great detail why; achieving the same funding with national debt would be unsustainable, whereas the EU-wide funding/debt is both sustainable, and incredibly flexible as well, making it much more manageable for member states.
    Anynama141 wrote: »
    Nice try. Adding debt to debt still means more debt, and you still have to deal with the fact that such an arrangement is impossible to implement in Europe in the absence of some sort of dictatorship.
    It's not the debt that matters, it's the sustainability; saying it adds "debt on debt", brings to peoples minds our national debt, and how adding to that debt would put us beyond sustainability, when that is not how this would be, when it would make our debts perfectly sustainable and would bring us economic recovery.

    While I agree the EU won't implement such recovery policies, due to Germany, it wouldn't need a dictatorship, it would need member states to mutually agree.


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    #551
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Three Seasons wrote: »
    With this Eurobonds plan which of the following is true?

    1. The Irish government will have extra debt to pay back ( even if it is a Eurobond debt).

    2. The Irish government won't have to pay back extra debt as other governmnents will pay it for us.
    It's actually neither; Europe will have extra debt to pay back, and Ireland will be paying back some of it as agreed with the rest of the EU (both the amounts and timing of paying it back, are very flexibly changeable).

    The entire point, is Ireland can pay back it's portion of the debt, in a way that is sustainable for Ireland, whereas if the money were added to our national debt, it would not be sustainable.


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    #552
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    darkhorse wrote: »
    Quite the contrary. If DDI does ever get into power, part of their mission statement is to change the status quo. What waffle did they spout, anyway, to make you think that things would remain the same?
    DDI are the crowd fronted by that Freeman clown, Ben Gilroy, aren't they?

    Probably better of discussing that in another thread.


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    #553
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Adding discussion beyond a federal EU:
    I don't expect these recovery policies to actually be implemented by Europe, because it is plain countries like Germany will never agree to them or any other recovery policies at this stage; this leaves the situation, where countries will be stuck in austerity for much of the rest of the decade, and this is currently leading to the rise of anti-austerity parties in places like Italy and Greece.

    It is not a certainty, that any of these anti-austerity parties will gain power, but as the crisis goes on, they seem to be gaining greater influence, with the real possibility of attaining power in the coming years; some of these parties (particularly in Italy), want to leave the Euro, and if an EU country does leave the Euro, it is likely to bring the rest of the EU along with it.

    A breakup of the Euro would be a seriously damaging event for most countries involved, and while it is not yet certain this will happen, it is looking increasingly likely, due to the rise of anti-austerity parties, and the probable need for just one country to exit the Euro; if this ends up looking more and more like an inevitability, then it leads to the question, of what is there to gain by delaying a breakup?

    If it becomes inevitable, then the damage taken by countries will not just be that of the exit, but also from the time spent taking damage from austerity, while waiting for the exit.
    Thus, if a breakup starts looking inevitable, it may be better to take the (extraordinarily painful) path of an early exit, rather than delaying the return to recovery even longer by waiting (while also taking damage from austerity), which could take many years yet, before a (possible) breakup would happen by itself.


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    #554
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    KyussBishop wrote: »
    If it were implemented, there's not really any reason it wouldn't get off the ground. Poor countries wouldn't be able to screw over other countries either, as the EU is in control of the debt and the investments.

    Who is 'the EU'?
    KyussBishop wrote: »
    No, it isn't, and I've explained in great detail why; achieving the same funding with national debt would be unsustainable, whereas the EU-wide funding/debt is both sustainable, and incredibly flexible as well, making it much more manageable for member states.
    It is, and we've explained why many times in great detail. And what about having to pay back debts that we never incurred?
    KyussBishop wrote: »
    It's not the debt that matters, it's the sustainability; saying it adds "debt on debt", brings to peoples minds our national debt, and how adding to that debt would put us beyond sustainability, when that is not how this would be, when it would make our debts perfectly sustainable and would bring us economic recovery.
    Sustainability is not helped by adding more debt to a debt burdened system. Your idea is that spreading the risk only benefits the risky countries: it also increases the risk of the safer countries. It's a zero-sum game, at best. Their borrowing would get more expensive because now they are on the hook for the dodgy countries' debt too. Why would turkeys vote for Christmas?
    KyussBishop wrote: »
    While I agree the EU won't implement such recovery policies, due to Germany, it wouldn't need a dictatorship, it would need member states to mutually agree.
    So the EU states would just agree to form a fiscal union without running it past their electorates? Do you think that would be constitutional right across the Eurozone?


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    #555
    Three Seasons
    Banned (with Prison Access) Posts: 548 ✭✭✭Three Seasons


    KyussBishop wrote: »
    It's actually neither; Europe will have extra debt to pay back, and Ireland will be paying back some of it as agreed with the rest of the EU (both the amounts and timing of paying it back, are very flexibly changeable).

    The entire point, is Ireland can pay back it's portion of the debt, in a way that is sustainable for Ireland, whereas if the money were added to our national debt, it would not be sustainable.

    Then number 1 is true. If Ireland has to pay money back then it's debt is increased.



    debt[ det ]
    noun
    1. something that is owed or that one is bound to pay to or perform for another: a debt of $50.
    2. a liability or obligation to pay or render something: My debt to her for advice is not to be discharged easily.
    3. the condition of being under such an obligation: His gambling losses put him deeply in debt.


    Our debt would increase if we owe money even if the specific amount is undetermined.

    We still have to pay back more money. You can call that what you want but we'd still have to pay extra money to other parties, be they the EU or other bond holders.


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    #556
    darkhorse
    Closed Accounts Posts: 2,274 ✭✭✭darkhorse


    Anynama141 wrote: »
    What was the choice with regard to austerity? You have admitted yourself that you can think of no alternative.

    I have? When?


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    #557
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    darkhorse wrote: »
    I have? When?
    I don't have the patience to trawl through the thread - :)

    Apologies if you have indeed got an alternative.

    Care to share it?

    Edit: Oh, I see what happened - I asked you to share your alternative yesterday and you never answered. I took that to mean you had none.


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    #558
    Three Seasons
    Banned (with Prison Access) Posts: 548 ✭✭✭Three Seasons


    darkhorse wrote: »
    I have? When?


    Go on, what's your realistic alternative?


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    #559
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    Three Seasons wrote: »
    Go on, what's your realistic alternative?
    It should be good, because he's been working on it since yesterday.


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    #560
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Anynama141 wrote: »
    Who is 'the EU'?
    The centralized EU institutions, with a mandate given to them collectively by the member states.
    Anynama141 wrote: »
    It is, and we've explained why many times in great detail. And what about having to pay back debts that we never incurred?
    If it would be the same as piling money onto the national debt, then this would also be unsustainable, which you've already agreed it is not.

    The entire EU gains from investments provided by the debts, which we would be collectively paying for with the collectively incurred EU-wide debt.
    Anynama141 wrote: »
    Sustainability is not helped by adding more debt to a debt burdened system. Your idea is that spreading the risk only benefits the risky countries: it also increases the risk of the safer countries. It's a zero-sum game, at best. Their borrowing would get more expensive because now they are on the hook for the dodgy countries' debt too. Why would turkeys vote for Christmas?
    You already said yourself it is sustainable, and there is inherently zero risk in EU-wide bonds, as Europe would have to default on them as a whole, and it also puts Europe right back into recovery.

    You're pretty much trying to backtrack now.
    Anynama141 wrote: »
    So the EU states would just agree to form a fiscal union without running it past their electorates? Do you think that would be constitutional right across the Eurozone?
    I didn't say that at all, it would likely require a treaty to implement.


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    #561
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    KyussBishop wrote: »
    You already said yourself it is sustainable, and there is inherently zero risk in EU-wide bonds, as Europe would have to default on them as a whole, and it also puts Europe right back into recovery.
    I said that a reasonable amount of debt would be sustainable, under certain conditions. Which you are taking to mean 'any amount of debt in any conditions', because otherwise your argument becomes even more shambolic. You ignore risks like moral hazard on the part of beneficiary countries or donor fatigue on the part of contributor countries. And you continue to pretend that Debt + more Debt = less Debt.
    KyussBishop wrote: »
    You're pretty much trying to backtrack now.
    I'm trying to remind you that you can't take a phrase like 'reasonable amount of debt' and then try to make it mean whatever you need it to mean to prop up your circular arguments.
    KyussBishop wrote: »
    I didn't say that at all, it would likely require a treaty to implement.
    And you think that such a treaty would be passed by all the Eurozone member states? Again, good luck with that. :)


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    #562
    joseph brand
    Registered Users Posts: 4,537 ✭✭✭joseph brand


    Three Seasons wrote: »
    If I were on minimum wage my beliefs would remain the same. It's better for society not to have a minimum wage. It's a handicap on our economy, standards of living fall with a minimum wage.

    I don't believe you. You want us to believe, that you would be happy to have your minimum wage slashed, for the benefit of society? Seriously?


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    #563
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Anynama141 wrote: »
    I said that a reasonable amount of debt would be sustainable, under certain conditions. Which you are taking to mean 'any amount of debt in any conditions', because otherwise your argument becomes even more shambolic. You ignore risks like moral hazard on the part of beneficiary countries or donor fatigue on the part of contributor countries. And you continue to pretend that Debt + more Debt = less Debt.
    You're trying to use weasel-words here to back your way out of what you said.

    Seeing as the EU-level debt is infinitely flexible, allowing not just a deferral of payments for a country and even a stretching out of them over an extremely long period, that makes it as sustainable as the total EU debt vs GDP allows.

    That allows trillions in spending throughout the EU before it would reach unsustainable levels; for all intents and purposes, any set of policies that is sustainable for the EU as a whole, is sustainable for each of the member states, due to the flexibility of these debts.
    Anynama141 wrote: »
    I'm trying to remind you that you can't take a phrase like 'reasonable amount of debt' and then try to make it mean whatever you need it to mean to prop up your circular arguments.
    You're just trying to use 'reasonable' as a weasel word, to try and edge enough room for you to back-out of what you said; I've explained at length, how flexible the EU-wide debt is, and how the total EU debt vs GDP determines the sustainability of it.
    Anynama141 wrote: »
    And you think that such a treaty would be passed by all the Eurozone member states? Again, good luck with that. :)
    I don't think such a treaty would even get to the voting stage, due to Germany.


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    #564
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    KyussBishop wrote: »
    You're trying to use weasel-words here to back your way out of what you said.
    You asked for an honest answer, and I gave you one. If you showed a shred of honesty you would admit that your idea is full of holes and would never get off the ground.
    KyussBishop wrote: »
    Seeing as the EU-level debt is infinitely flexible, allowing not just a deferral of payments for a country and even a stretching out of them over an extremely long period, that makes it as sustainable as the total EU debt vs GDP allows.
    What does 'the EU-level debt is infinitely flexible' mean? Is this one of your phrases like 'debts as liabilities' that sounds like finance-talk to you, but is in fact meaningless?
    KyussBishop wrote: »
    That allows trillions in spending throughout the EU before it would reach unsustainable levels; for all intents and purposes, any set of policies that is sustainable for the EU as a whole, is sustainable for each of the member states, due to the flexibility of these debts.
    What is this 'flexibility of debts' that you keep speaking of?
    KyussBishop wrote: »
    You're just trying to use 'reasonable' as a weasel word, to try and edge enough room for you to back-out of what you said; I've explained at length, how flexible the EU-wide debt is, and how the total EU debt vs GDP determines the sustainability of it.
    Yes, I can see how 'reasonable' would appear to be a meaningless word to you.


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    #565
    joseph brand
    Registered Users Posts: 4,537 ✭✭✭joseph brand


    Suryavarman wrote: »
    Obviously it doesn't change the laws of economics. The laws of economics are just like the laws of physics. They apply to everyone and everything.

    I would have thought economics was more like a game of chance. Isn't it more of a social science?


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    #566
    K-9
    Registered Users Posts: 43,311 ✭✭✭✭K-9


    Mod: Right, I think we've had enough discussion of a tool that we all agree is unlikely to occur within a short to medium term. It might be better to discuss things that we can do now rather than get bogged down in details on Eurobonds.

    Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.



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    #567
    darkhorse
    Closed Accounts Posts: 2,274 ✭✭✭darkhorse


    Anynama141 wrote: »
    But most other civilised countries have property tax. It's a progressive tax that hits the wealthier harder, and of course it doesn't (or at least shouldn't) add to the overall tax burden.

    And that makes it right, why? If everybody on here were to put their finger in the fire, should me and you do the same. Oh, and as regards your "It hits the wealthier harder", the guy next door to me earns four times what I earn, but his house is in the same value band as mine. So, how would you explain that, if we are both paying the same for property tax on our family home, it actually hits the wealthier harder? You seem to take the view that because someone is wealthy, then they should have a big mansion of a house, just because some wealthy people do happen to have very big houses.


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    #568
    KyussBishop
    Closed Accounts Posts: 5,797 ✭✭✭KyussBishop


    Moving on from the Eurobonds, here is my post from earlier, about what I view as the possible course of events, as things are now in the EU.
    KyussBishop wrote: »
    Adding discussion beyond a federal EU:
    I don't expect these recovery policies to actually be implemented by Europe, because it is plain countries like Germany will never agree to them or any other recovery policies at this stage; this leaves the situation, where countries will be stuck in austerity for much of the rest of the decade, and this is currently leading to the rise of anti-austerity parties in places like Italy and Greece.

    It is not a certainty, that any of these anti-austerity parties will gain power, but as the crisis goes on, they seem to be gaining greater influence, with the real possibility of attaining power in the coming years; some of these parties (particularly in Italy), want to leave the Euro, and if an EU country does leave the Euro, it is likely to bring the rest of the EU along with it.

    A breakup of the Euro would be a seriously damaging event for most countries involved, and while it is not yet certain this will happen, it is looking increasingly likely, due to the rise of anti-austerity parties, and the probable need for just one country to exit the Euro; if this ends up looking more and more like an inevitability, then it leads to the question, of what is there to gain by delaying a breakup?

    If it becomes inevitable, then the damage taken by countries will not just be that of the exit, but also from the time spent taking damage from austerity, while waiting for the exit.
    Thus, if a breakup starts looking inevitable, it may be better to take the (extraordinarily painful) path of an early exit, rather than delaying the return to recovery even longer by waiting (while also taking damage from austerity), which could take many years yet, before a (possible) breakup would happen by itself.


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    #569
    bgrizzley
    Closed Accounts Posts: 1,641 ✭✭✭bgrizzley


    is there anything to be said for saying another mass?


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    #570
    Three Seasons
    Banned (with Prison Access) Posts: 548 ✭✭✭Three Seasons


    joseph brand wrote: »
    I don't believe you. You want us to believe, that you would be happy to have your minimum wage slashed, for the benefit of society? Seriously?


    When did I say I'd be happy to have my wages slashed?

    Regardless of my happiness levels I'd be aware that the minimum wage harms the economy. I never said I'd be happy to have my wages reduced, I'd do whatever I could to have them increased, tthat doesn't change the fact Inwoulf md be aware that the minimum wage harms society. As an individual I would look out for myself and my interests and I'd expect anyone to do the same.


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    #571
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    darkhorse wrote: »
    And that makes it right, why? If everybody on here were to put their finger in the fire, should me and you do the same. Oh, and as regards your "It hits the wealthier harder", the guy next door to me earns four times what I earn, but his house is in the same value band as mine. So, how would you explain that, if we are both paying the same for property tax on our family home, it actually hits the wealthier harder? You seem to take the view that because someone is wealthy, then they should have a big mansion of a house, just because some wealthy people do happen to have very big houses.
    It doesn't make it right. It just makes it perfectly normal. If we were the only country not to have hospitals, do you think anyone would point that out? :confused:

    As to your neighbour - he doesn't live in an expensive house, so he pays less tax on his house. What's the problem? People who want to live in expensive houses - usually wealthy people - have to pay more. What's the point of picking out the rare case of a rich guy in a small house?

    Should he have to pay extra tax if he drives the same car as you?


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