Could Ireland economy collapse permanently?

kippy wrote: »

FDI is one of the key drivers of this economy over the past 30 years so saying it doesn't come into it is strange.
Excessive is where we are at now - essentially relying on debt forgiveness and/or major increases /stability in GDP/revenue to keep repayments sustainable.


Debt sustainability works assuming GDP and revenue continue to increase. A major issue for us I fear.
I'll review where we are at debt wise in 5 or 6 years and see how sutstainable we are.

You don't seem to know what you're trying to say about FDI then, because you are trying to use it as an example of something that can cause GDP to drop, and are now ignoring the counterexample that GDP can be kept maximized regardless of what FDI does.

GDP has to increase exponentially long term, forever, in the current monetary system. That's simply inescapable. That's not going to change until the monetary system itself changes and is reformed.

What debt forgiveness?

kippy wrote: »

Lad,
you're not debunking anything - you are putting across your points of view I am putting across mine, which is usually what happens when trying to predict the future.
I hope you are right, in that continuing to increase national debt will not have an adverse effect on us as a nation in later years and that GDP/Revenue continues to rise to match it.

I am of a different opinion, that we are totally exposed to GDP falling off a cliff and this alone is reason to be cautious when increasing debt because we know the next crisis is just around the courner (next decade or less) - what happens then IF we continue to increase our debt over that time frame.

Oh, I am done - there's no point sometimes, people (including myself) don't tend to change their viewpoints on platforms like this.

Oh look, you replied again after saying you were done, for the second time. Now saying it again for the third time.

Again as well, you are ignoring that GDP doesn't fall, when governments prop it up with policies of Full Output and Full Employment, like with a Job Guarantee program. You are arguing against public funding of Full-Output/Full-Employment conditions, using arguments based on letting Output and Employment drop enormously.

KyussB wrote: »

We have austerity parties in governmnt, of course they will say that.

Much of our government bonds are in negative interest rates, which makes them inherently sustainable - with no end in sight for negative rates, for at least half a decade, if not a decade or more - eliminating rollover risk.

Lashing billions around the economy hardly seems like austerity to my possibly naive way of thinking.

I don't have the economic knowledge that many sharp well-informed posters here possess but I try to keep up with socio-political trends and issues.
I was puzzled that someone should snipe at teachers because good teaching is crucial in a knowledge based economy and in an ever changing world. Face to face teaching and learning will always be an important element in forming the workers and citizens of the future.
I believe we're still too insular in Ireland -being excessively ( though understandably) immersed in the anglophone world. Our knowledge of European languages is paltry and of other world languages like Chinese , Hindu , Arabic etc. close to non-existent.
Yesterday,in The Times, the head of the Russell university group pleaded for a less narrow specialised curriculum....a blend of Arts/Humanities and Science/Technology. I would agree -in fact decades ago I taught in an Irish university which tried to do this but inexplicably drifted away from it.
I endorse the point made above about the growth mania. There has to be more to life than striving to put another percentage point on to the GDP or GNP or whatever the fashionable metric is.. People need a nobler , more expansive purpose in their lives and job satisfaction is vital to a sense of wellbeing and self worth.
One possible benefit of the shock we 've experienced might be that people would question and re-assess their attitude to incessant materialism.

Geuze wrote: »

Your repeated suggestion of a Job Guarantee program deserves its own thread.

I would like to know more about it.
...

Ireland's ratio of "Unemployed per Job Vacancy" was 26:1 back in 2012 - and in the West of Ireland it's presently 22:1.
Cheap labour will certainly fill that '1' more readily - but there'll still be the other ~20x unemployed.

Long Term Unemployment - and Very Long Term Unemployment - are certainly real things that the majority who experience it, do so from no fault of their own. Unfortunately, economic narratives tend to pile responsibility for this onto individuals, when it is really a macroeconomic problem.

With a Job Guarantee, government expenditure would indirectly boost Aggregate Demand and private sector employment, yes (part of its purpose, in achieving recovery and winding down workers on the JG) - but of course, it's primary ability to create jobs, is through direct public employment - directed into any number of necessary (in many cases urgent) projects that the government can undertake.

Unemployment payments would still exist alongside the JG - so what the JG would do, is provide a far more objective headcount, for people that are voluntarily unwilling to work. From there, more conservative folk than me might advocate cutting their unemployment payments, with easy justification - but that's not what I personally advocate - doing that would, however, perfectly provide a way to end the varieties of welfare fraud you list, permanently.

I haven't read it (there are a bunch of recent prominent books on things I go on about all the time - I should read them to see that they are worth recommending) - but the author who wrote this is a well known one, among economists who champion a JG:
https://www.amazon.co.uk/Case-Job-Guarantee-Pavlina-Tcherneva/dp/1509542108/

Geuze wrote: »

If we had been balancing our budget, we wouldn't have a 200bn public debt, pre-COVID.

The 200bn public debt shows that we have run deficits year after year.

All Govts have a bias towards deficits, due to politics.

Bertie Ahern could not say no to requests from unions.

We have rarely run surpluses.

You seem to be suggesting that we have has austerity very often - this is false.

I would love if we had what you suggest - a sensible fiscal policy, with politicians wanting to balance Budgets. Alas, we do not, as TDs want to be re-elected, and so are happy to run deficits.

We are not Germany.

We have had fiscal deficits most years since 1975, I must check how many years we ran a surplus since 1975.

That's 200 billion in the Private Sector that wouldn't be there otherwise (ignoring foreign sector).

When I say austerity/budget-balancing - I'm including having a tendency towards balancing the budget without reaching it, when the economy is below Full Output.

Deficits are the normal state of affairs, yes - that's the correct way to run the economy. Deficits aren't the goal, though - they should just be an incidental side effect, of maintaining Full Output, Full Employment, and stable inflation.

I don't understand why you would view an arbitrary accounting balance as sensible or a good thing - that would be treating government finances like household/personal finances, when they don't operate like that.

Germany sets economic policy based on having an artificially depreciated currency, Ireland sets economic policy based on having an artificially appreciated currency - that's the imbalance the Euro without a central government creates, as there is no regional redistribution of revenue/spending, proportional to what national governments do - so it would be pretty inadvisable for us to operate government finances the same way as Germany.

Geuze wrote: »

The LT unemployed may refuse to take up jobs, as they currently do.

Bear in mind, the problem isn't a lack of vacancies (pre-COVID).

The problem is the design of the welfare state.

My relations say to my face: "Why work?"

They drive an Audi Q5, want for nothing, and have received 100,000 in taxpayer-financed student grants.

Why would they bother taking up employment?

Will the Job Guarantee replace JSA?

Report them for welfare fraud? More seriously - yes, there are some 'genuine scroungers' out there - the Job Guarantee is for people who want to work, so it doesn't have to solve the problem of scroungers.

It can be used to solve that problem quite easily though (offer them a job and cut their welfare upon repeated refusual), but I don't advocate doing that.

No, I don't want a JG replacing unemployment payments, or being used as an excuse to kick people off of welfare. With a JG though, it will be a lot easier for Revenue to put investigators onto long term unemployed engaging in fraud, as they won't have to filter through all the people who do want work.

A Jobs Guarantee is unlikely to work. Many people on the long term dole have mental health problems. They are only required to take up suitable work, not any and all work. No work is suitable if you have long term untreated mental health problems.

We should just let the people who want to work, work, and those who don't want to work should be left alone pretty much.

There's no point trying to force horses to drink water they don't want to drink.

If we weren't aiming for full employment then we could reach our goal more easily.