Public sector pay increase

KomradeBishop · 07-05-2015 05:49PM

awec wrote: »

Imagine you earn 100 quid a month (just a random number). You take out a Sky tv package that costs 50 quid a month.

In 6 months time, all of a sudden you are only earning 40 quid a month because the arse has fallen out of things.

By your logic, you should not cut back on your Sky cause it's not their fault your earnings reduced.

Do you see how insane that idea is?

As explained in my previous post, business/personal finances, are in no way comparable to government/national finances...they work in a completely different manner, this is a false comparison.

KomradeBishop · 07-05-2015 05:52PM

awec wrote: »

If you can't afford something then you can't afford something.

Call a spade a spade and don't try and bury it in a essay full of waffle.

Read up the basics of how macroeconomics work - you don't understand how government debt works. You have an amateur level of understanding, which confuses government debts with personal/business debts.

Government debts are currently at their lowest interest rate ever (i.e. spending based on debt is more affordable than ever), meaning there's more than enough room for sustainable expansion of public debt.

Iwasfrozen · 07-05-2015 05:54PM

KomradeBishop wrote: »

This has been covered elsewhere in other threads: Increases in debt don't matter if they are sustainable at low interest rates - newly issued public-debt/government-bonds carry the lowest interest rate ever right now, so it's the perfect time to be running a deficit.

Oh good lord Komrade, I don't want to get into another economics debate with you. It's like arguing with a convert.

BoatMad · 07-05-2015 05:56PM

KomradeBishop wrote: »

Excellent post - rare that you see anyone on Boards take not of Sectoral Balances.

its backs up what I was saying too

According to the sectoral balances framework, budget surpluses remove net savings; in a time of high effective demand, this may lead to a private sector reliance on credit to finance consumption patterns. Hence, continual budget deficits are necessary for a growing economy that wants to avoid deflation. Therefore budget surpluses are required only when the economy has excessive aggregate demand, and is in danger of inflation.

however as per your wealth creation

In essence , paradoxically government generated private wealth creation only exists where spending is greater then taxes. i.e. in a deficit. when a government runs a surplus it actually can reduce wealth.

hence a euro of wealth is not always the same

if one where to accept the theory of sectoral balances, the GoV should be engaged in massive deficit creation and hence spending at the moment , while lowering taxes

KomradeBishop · 07-05-2015 05:56PM

Iwasfrozen wrote: »

Oh good lord Komrade, I don't want to get into another economics debate with you. It's like arguing with a convert.

Convert to what, exactly? If you (and others) can't understand the basic mathematics/accounting of debts and interest rates, and instead have an ideological fetish for 'balanced budgets at all costs' or 'surplus at all costs', then you're beyond reason/basic-mathematics, and are just spouting the same political view again an again, out of ideological conviction.

Do the math.

07-05-2015 05:57PM

If anything there's a "profit" to be made in borrowing money right now as the rates are at effectively 0 while we'll likely see inflation over the term of the loans.

I'm not suggesting that money should be handed out willy-nilly, now's really the time to be building infrastructure, but modest pay increases for low-paid workers isn't going to wreck the country, there's other policies that are going to have a much bigger effect.

BoatMad · 07-05-2015 06:00PM

awec wrote: »

If you can't afford something then you can't afford something.

Call a spade a spade and don't try and bury it in a essay full of waffle.

actually this is incorrect , look at the theory of broad money supply

its not the same as family budgets

Governments can in a fiat currency , essentially acquire unlimited capital , hence in reality debt is never replayed, merely extended forever.

Iwasfrozen · 07-05-2015 06:01PM

KomradeBishop wrote: »

Convert to what, exactly? If you (and others) can't understand the basic mathematics/accounting of debts and interest rates, and instead have an ideological fetish for 'balanced budgets at all costs' or 'surplus at all costs', then you're beyond reason/basic-mathematics, and are just spouting the same political view again an again, out of ideological conviction.

Do the math.

A religious convert.

I have a good understanding of economics, probably a better understanding of mainstream economics than you do. What I don't subscribe to is your ideological niche, and it's annoying that you must bring it into every discussion you have.

Iwasfrozen · 07-05-2015 06:02PM

BoatMad wrote: »

actually this is correct , look at the theory of broad money supply

its not the same as family budgets

Governments can in a fiat currency , essentially acquire unlimited capital , hence in reality debt is never replayed, merely extended forever.

How? Explain how this would work? And what happens in future when we have to refinance the debt in ten years when interest rates have gone up.

BoatMad · 07-05-2015 06:02PM

Deleted User wrote: »

now's really the time to be building infrastructure, .

yes this is the bit that the Gov dont seem to understand, there should be road, rail, Luas, etc going up all over the place at the moment, but we are locked in this stupid semi-austerity speak.

KomradeBishop · 07-05-2015 06:15PM

BoatMad wrote: »

actually this is correct , look at the theory of broad money supply

its not the same as family budgets

Governments can in a fiat currency , essentially acquire unlimited capital , hence in reality debt is never replayed, merely extended forever.

While this is true for the most part, one caveat worth mentioning, is that we are in the Euro - so we don't truly have full control here, like countries such as the US/UK have; however, with QE in operation at the moment by the ECB, pushing our interest rates more and more towards 0%, we do have a window of opportunity here which we should be making the most of.

Iwasfrozen · 07-05-2015 06:16PM

BoatMad wrote: »

yes this is the bit that the Gov dont seem to understand, there should be road, rail, Luas, etc going up all over the place at the moment, but we are locked in this stupid semi-austerity speak.

Do you ever think maybe government economic planners have a better grasp of this stuff than you do?

Uncle Ben · 07-05-2015 06:17PM

Iwasfrozen wrote: »

It's not the fault of any individual worker when their employer gets into financial trouble but they have to take pay cuts anyway. The government is borrowing money to pay public sector wages, increasing wages at a time like this is against the public interest.

To paraphrase that memorable scene in Kelly's Heroes, 'will you ease it with those negative vibes '. Howlin & Noonan are almost tripping each other up in the race to tell us the good news. Unemployment almost in single figures, more schools being built than ever before, promissory notes and other cans being kicked into the next millennium, emigration has stopped and there is now net inward migration, more nurses, garda, soldiers and I heard today, council workers being hired to make up for those that went to IW. Everything is rosy in this great lil auld country and once those referendums are passed that'll be the icing on the cake.

The emergency is over now where is that €800 and the weekly % increase?

KomradeBishop · 07-05-2015 06:18PM

Iwasfrozen wrote: »

A religious convert.

I have a good understanding of economics, probably a better understanding of mainstream economics than you do. What I don't subscribe to is your ideological niche, and it's annoying that you must bring it into every discussion you have.

You don't have the foggiest clue of what MMT is - you just ignorantly spout it as a label, without any knowledge of what it means.

Tell me, exactly, what I have posted in this thread, that counts as 'MMT'?
If you can't point out precisely, what I have posted, that is MMT - you're just throwing a label around to try and disparage my views.

You yourself, were only yesterday, spouting your religious belief in free-market-economics - so a bit rich for you to attempt to disparage my views, based on a label you have zero understanding of.
When free-market oriented posters run out of actual arguments against my views, the first thing they do is revert to the 'MMT' label - as if that's meant to be somehow discreditable.

BoatMad · 07-05-2015 06:18PM

Iwasfrozen wrote: »

Do you ever think maybe government economic planners have a better grasp of this stuff than you do?

on the basis of 2000-2012 , no

remember i am taking about capital spending

Iwasfrozen · 07-05-2015 06:19PM

Uncle Ben wrote: »

To paraphrase that memorable scene in Kelly's Heroes, 'will you ease it with those negative vibes '. Howlin & Noonan are almost tripping each other up in the race to tell us the good news. Unemployment almost in single figures, more schools being built than ever before, promissory notes and other cans being kicked into the next millennium, emigration has stopped and there is now net inward migration, more nurses, garda, soldiers and I heard today, council workers being hired to make up for those that went to IW. Everything is rosy in this great lil auld country and once those referendums are passed that'll be the icing on the cake.

The emergency is over now where is that €800 and the weekly % increase?

And all the while, tick tock tick...

http://www.financedublin.com/debtclock.php

KomradeBishop · 07-05-2015 06:23PM

Iwasfrozen wrote: »

And all the while, tick tock tick...

http://www.financedublin.com/debtclock.php

:rolleyes: Anyone with even the slightest clue of how accounting/economics works, would know that the interest rate is what matters, not the overall level of debt.

Iwasfrozen · 07-05-2015 06:24PM

KomradeBishop wrote: »

You don't have the foggiest clue of what MMT is - you just ignorantly spout it as a label, without any knowledge of what it means.

Tell me, exactly, what I have posted in this thread, that counts as 'MMT'?
If you can't point out precisely, what I have posted, that is MMT - you're just throwing a label around to try and disparage my views.

You yourself, were only yesterday, spouting your religious belief in free-market-economics - so a bit rich for you to attempt to disparage my views, based on a label you have zero understanding of.
When free-market oriented posters run out of actual arguments against my views, the first thing they do is revert to the 'MMT' label - as if that's meant to be somehow discreditable.

I'm no expert on MMT but I have a fair idea what it is. I'm not disparaging your views I'm just pointing out there's no point in arguing with you. You're not going to change your mind.

BoatMad · 07-05-2015 06:25PM

Iwasfrozen wrote: »

How? Explain how this would work? And what happens in future when we have to refinance the debt in ten years when interest rates have gone up.

Governments can in effect , monitize their debts , simplistically issuing bank notes to themselves . ( This is what QE is in reality), hence Gov can in effect " cancel " debt. excessive use devalues a currency and can cause hyper inflation, but that risk is very low in the Euro zone for a considerable future.

however , we have constraints on this as part of the Eurozone, so that in itself acts as a brake on whats possible.

Idbatterim · 07-05-2015 06:25PM

Anyone with even the slightest clue of how accounting/economics works, would know that the interest rate is what matters, not the overall level of debt.

how can the amount not matter?! if we owed a trillion, the interest rate could be 0% and we would still be screwed...

Iwasfrozen · 07-05-2015 06:26PM

KomradeBishop wrote: »

:rolleyes: Anyone with even the slightest clue of how accounting/economics works, would know that the interest rate is what matters, not the overall level of debt.

The interest rate is a percentage, you're totally right. Anyone with any knowledge knows what it's a percentage of is irrelevant. :rolleyes:

KomradeBishop · 07-05-2015 06:27PM

Iwasfrozen wrote: »

I'm no expert on MMT but I have a fair idea what it is. I'm not disparaging your views I'm just pointing out there's no point in arguing with you. You're not going to change your mind.

You don't have the slightest clue of what MMT is. You're saying I'm posting MMT views in this thread - then what have I posted, exactly, that counts as an MMT view?
If you can't point that out, you're just spouting nonsense - trying to use 'MMT' as a disparaging label, without having any understanding of what it means at all.

Which would be no surprise, given that nobody who throws the 'MMT' label around, actually knows anything about it.

For the record: None of the views that I have posted in this thread, are unique to MMT - they are shared by many economic schools, not limited to MMT at all.
If you were able to point out any specific views I have posted, that you consider as being 'MMT', then you would be able to Google them and find that out - instead, you are bluffing and are just using it as a disparaging label, when your ability to provide coherent counterarguments fails you.

BoatMad · 07-05-2015 06:28PM

Idbatterim wrote: »

how can the amount not matter?! if we owed a trillion, the interest rate could be 0% and we would still be screwed...

see fiat currency , debts can be monitised , in essence , printing money , since paper is cheap , we are never " screwed". but there are risks ( mind you this is MMT, but then ....)

Iwasfrozen · 07-05-2015 06:30PM

KomradeBishop wrote: »

You don't have the slightest clue of what MMT is. You're saying I'm posting MMT views in this thread - then what have I posted, exactly, that counts as an MMT view?
If you can't point that out, you're just spouting nonsense - trying to use 'MMT' as a disparaging label, without having any understanding of what it means at all.

Which would be no surprise, given that nobody who throws the 'MMT' label around, actually knows anything about it.

For the record: None of the views that I have posted in this thread, are unique to MMT - they are shared by many economic schools, not limited to MMT at all.

That's a strawman, I never claimed you posted MMT in this thread. I claimed you had an ideological niche and bemoaned you constantly pull the direction of every conversation in that direction.

Now we're dragging this thread even further off topic so I'll leave it at that.

KomradeBishop · 07-05-2015 06:30PM

Iwasfrozen wrote: »

The interest rate is a percentage, you're totally right. Anyone with any knowledge knows what it's a percentage of is irrelevant. :rolleyes:

Yea anyone with knowledge of how debt works, knows that an interest rate of 0.66% - one of the lowest interest rates ever - gives us extensive room for sustainable debt-based spending. Do the math.

Iwasfrozen · 07-05-2015 06:31PM

KomradeBishop wrote: »

Yea anyone with knowledge of how debt works, knows that an interest rate of 0.66% - one of the lowest interest rates ever - gives us extensive room for sustainable debt-based spending. Do the math.

To "do the math" we need to know what inflation will be and what the ROI will be over the next ten years before the bonds have to be reissued.

KomradeBishop · 07-05-2015 06:36PM

BoatMad wrote: »

see fiat currency , debts can be monitised , in essence , printing money , since paper is cheap , we are never " screwed". but there are risks ( mind you this is MMT, but then ....)

Well, it is and it isn't - many people think this is unique to MMT, but it's actually just basic economics, and even people as diverse as Milton Friedman (of NeoLiberal/Libertarian persuasion) recognized this - MMT is just a Post-Keynesian theory, which a particular focus on how money creation works

(the fact that banks create money when they given loans, and that - for governments with their own currency, i.e. non-Euro countries - it is possible governments to do this too).

However, there is a misconception that this is unique to MMT - it actually isn't.; this is why those who use 'MMT' as a disparaging label, don't actually know anything about MMT.

KomradeBishop · 07-05-2015 06:37PM

Iwasfrozen wrote: »

That's a strawman, I never claimed you posted MMT in this thread. I claimed you had an ideological niche and bemoaned you constantly pull the direction of every conversation in that direction.

Now we're dragging this thread even further off topic so I'll leave it at that.

If you're claiming I constantly pull the direction of every conversation in the direction of MMT, then you're claiming I posted MMT - otherwise, how could I be pulling the conversation in that direction?

You don't seem to know anything about MMT, so you don't have a clue if I'm ever pulling a thread in the direction of MMT.

KomradeBishop · 07-05-2015 06:40PM

Iwasfrozen wrote: »

To "do the math" we need to know what inflation will be and what the ROI will be over the next ten years before the bonds have to be reissued.

No we don't, as you're assuming that the bonds will automatically be reissued, an assumption based on nothing...since you admit you don't know what the rate of inflation will be, or what the growth in GDP will be (which counts as the ROI), you're pretty much admitting you haven't got a clue whether the debt will be sustainable or not.

Other posters have already pointed out, that through sectoral balances, there will automatically be a growth in GDP from government spending through debt, showing that there will automaticaly be a boost in debt sustainability through economic growth.

darkpagandeath · 07-05-2015 06:42PM

Pay increase of up to €1,000 a year according to the news.

Public sector pay increase

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