Could Ireland economy collapse permanently?

lightspeed · 18-07-2020 5:34pm #1

Hi

All just wondering what are people's thoughts on the risks of a permanent crash?

By permanent I mean more specifically will our economy deteriorate inthat we may be more like an eastern European country. The likes of Poland, Hungary etc dont appear to be poor like Bangladesh or the like but there is a reason so many immigrants from eastern Europe need to come to ireland and uk etc for employment.

I'm struck that Ireland is probably the most at risk country right now in western world for a economic shock.

I'm concluded this based on potential impact from

1.Coronavirus global depression
2. No deal Brexit
3. Significant movement on the cards for measures to be taken by EU Commission to harmonise corporation tax. This may mean sales are taxed in the country where they occur and not where company is headquartered. Hence we would see huge dip in Corp tax receipts and huge loss of low Corp tax advantage that attracts the multinationals.

At some point the impact of depression or recession will pass at some point but issues resulting from Brexit and any corp tax harmonisation could be permanent.

I've a child on the way and looking to buy a house soon presuming my job remains intact. It's a worry to think though that so much could change in the long term.

Is my outlook too pessimistic or realistic?

Geuze · 19-07-2020 12:10am

Too pessimistic.

These are all challenges, yes.

A hard Brexit, no FTA, with WTO trading means something like the following:

"your income is 100 now, instead of growing to 130 in ten years time, it will grow to 120"

Bad, but not a disaster.

Geuze · 19-07-2020 12:12am

The COVID recession will be three months long, maybe six months, (2020 Q2 and maybe Q3) then a recovery.

Yes, it will take much longer to get back to the previous peak, yes.

http://econbrowser.com/archives/2020/07/recessions-vs-negative-output-gaps

The negative output gap will last much longer than the recession.

kippy · 19-07-2020 12:17am

Geuze wrote: »

The COVID recession will be three months long, maybe six months, (2020 Q2 and maybe Q3) then a recovery.

Yes, it will take much longer to get back to the previous peak, yes.

http://econbrowser.com/archives/2020/07/recessions-vs-negative-output-gaps

The negative output gap will last much longer than the recession.

We are nowhere near being able to say that.
Covid is going to have a major effect on the global economy until a vaccine is found and/or some level of herd immunity is achieved.
Ireland's biggest issue in the short term is our reliance on tourism be it international, retirees, students. That industry is decimated for the next 6 to 12 months at a minimum.

I don't think things are as bad as the OP may be thinking but I believe they are bad and some of the effects will be worse than 2008 and effect far more people.

yoke · 19-07-2020 12:24am

Regarding multinationals/tax , the only thing I can see that could mess it up for ireland would be if ireland voted to increase its corporate tax rate by itself, due to stupidity.

If it was as simple as taxing sales where the buyer was headquartered, then you would lose some tax/business based on that, but you'd probably make a net gain, because a lot of the buyers would just open a new "European HQ" in an office in Dublin.

That would actually create a new tax loophole in fact - you could have like a bank in Germany which has a European hq in dublin, but does all its business in Germany, paying tax in ireland.

lalababa · 19-07-2020 12:30am

Sure , what ya gonna do. If you're not a properties or markets investor it really doesn't matter to ya. Only worry about what's inside your own job and door. Because they're the only places where you can do something.

BillyBiggs · 19-07-2020 10:51am

A lot of businesses will go to the wall, unable to pay creditors and retail landlords. That will have a knock on effect on house prices and emigration. Ireland is probably too small a country to take such a heavy hit. Our government having the horn for lockdown doesn’t help. Can you imagine if you were a pub owner anywhere in Ireland at the moment?

Hairy Japanese BASTARDS! · 19-07-2020 10:54am

Geuze wrote: »

Too pessimistic.

These are all challenges, yes.

A hard Brexit, no FTA, with WTO trading means something like the following:

"your income is 100 now, instead of growing to 130 in ten years time, it will grow to 120"

Bad, but not a disaster.

You can be guaranteed teachers' income won't be curtailed though.

nthclare · 19-07-2020 11:06am

BillyBiggs wrote: »

A lot of businesses will go to the wall, unable to pay creditors and retail landlords. That will have a knock on effect on house prices and emigration. Ireland is probably too small a country to take such a heavy hit. Our government having the horn for lockdown doesn’t help. Can you imagine if you were a pub owner anywhere in Ireland at the moment?

I think they jumped the gun too without the lockdown, it would have been easier to make masks mandatory and sanatize the hands regularly and follow the hygiene guidelines.

But some people are stubborn and there's a lot of anti establishment around and conspiracy theories etc

Even if one had it in their head's to fake it to make it and go along with the suggestions it would have been a softer blow.
And when it blows over people could get back to normal again.

There's a thin line between sanity and insanity.

Driving through Kilkee, Spanish Point and Lahinch yesterday I notice that people don't give a toss and it's the same as it ever was...

They're entitled to do as they like, but for the sake of getting rid of this situation people should be more observant of the guidelines.

Being a lone wolf, I find it easier to do my own thing and avoid the mainstream places.

KyussB · 19-07-2020 8:22pm

It's a bit of an open-ended question OP, leaving a lot of guesswork as to what 'permanent' means.

Output Gaps (GDP being below its full potential - analagous to being below Full Employment) always have a permanent affect on the size of GDP, as even when the gap is closed, GDP permanently remains below what it potentially could have been.

That means every single day that we are below Full Employment, permanent harm is done to our economy and to many of the affected people within it (e.g. to the unemployed and their lifetime finances, most visibly).

As for Ireland's economy collapsing in a permanent way, so that e.g. we could probably never expect a return to Full Employment...the main way I could see that happening, is if Ireland kept our Public Debt denominated in a foreign currency (e.g. kept it denominated in Euro's), while switching back to the Punt - that's one of the most dangerous possible ways to mismanage a countries finances, as a collapse in the exchange rate, can quickly make the debt unsustainable and set in motion a negative feedback loop, where austerity is forced, which worsens the exchange rate further, worsening debt sustainability further in a loop etc. etc. (this is one of the most common ways that hyperinflation occurs).

Neon_Lights · 19-07-2020 8:26pm

Well the question there lightspeed is that you know, that well somebody obviously didn't make sure to buy the gas for the balloon during the boom and when the bubble burst they were just all our of €2 shop balloons.

I reckon the answer to the question would be to get another balloon and try and inflate it, using some form of gas which expends outward pressure in an equal manner to the inward pressure pushed in towards it. I believe it's a Keynesian theory but don't quote me.

19-07-2020 8:38pm

nthclare wrote: »

I notice that people don't give a toss and it's the same as it ever was...

They're entitled to do as they like, but for the sake of getting rid of this situation people should be more observant of the guidelines.

Such people are more omnipresent than you'd think.

As observed last week on two buses, (one go ahead the other Dublin Bus) travelling through bray and dun laiogre.

Fast forward today, Sunday 19th I was on a Dublin Bus, heading towards city centre.

Middle Eastern version of Beavis and Butthead boarded, drivers asked them to put on their masks. They didn't, still allowed to board though. Talking loudly as well. Meh.

Wanderer78 · 19-07-2020 8:55pm

lightspeed wrote:

Is my outlook too pessimistic or realistic?

A bit too pessimistic for my liking, I'd like to think eu institutions would kick in before things went down the tubes, then again......

Tis always good to try not over extend yourself too much with things such as debt, and save whenever you can. recessions come and go, the global economy could completely collapse in the next 5 mins, nobody knows, and it can't be accurately predicted, and the details of each downturn can never be accurately predicted either, such as length of time etc

Best of luck with the baby, and try not to be too stressed about the economy

NIMAN · 19-07-2020 8:59pm

Hairy Japanese BASTARDS! wrote: »

You can be guaranteed teachers' income won't be curtailed though.

Quick, time now for you to train up for this cushy job with the amazing wages.

What's delaying you?

saabsaab · 19-07-2020 10:05pm

Any economy could collapse if enough critical areas come under pressure at the same time. If the country can adapt to new situations and remain flexible it can mitigate the downsides. Overall I think a massive collapse is unlikely.

Markcheese · 20-07-2020 12:10am

Commercial rents are a big issue ,( at least where I'm from ) ,the multinational type companies are reasonably okay ,and some of them are thrilled with the home working and less meetings ,but property developers we're counting on these guys to buy Into their new developments ...
Cafes and restaurants are feiced ... You can't really expectl to survive paying the same inflated rents with low footfall, and social distancing , expect the bigger chains to renegotiate and the small guys to go to the wall unless they've a sympathetic landlord , I've heard of guys with large commercial portfolios who rather have empty buildings than accept a rent reduction,
Shops are the same ...

Hairy Japanese BASTARDS! · 20-07-2020 12:18am

NIMAN wrote: »

Quick, time now for you to train up for this cushy job with the amazing wages.

What's delaying you?

Taking two years out to do my hdip and be qualified to teach maths, physics and chemistry would cost me over €100,000 with lost salary, student tuition fees, loss of pension and employer health insurance.

It's a very financially rewarding job if you go straight in after college or do a degree where the teaching element is already combined (science teaching in DCU for example).

If you do science teaching in DCU, the teaching HDIP is combined. Start at 17 and you'll be a qualified teacher at 21 on a permanent job pulling in €34,000.

Wanderer78 · 20-07-2020 9:39am

Hairy Japanese BASTARDS! wrote:

If you do science teaching in DCU, the teaching HDIP is combined. Start at 17 and you'll be a qualified teacher at 21 on a permanent job pulling in â‚¬34,000.

And fair play to them, college is far from easy, and in some ways it's a better career path than many private sector ones. I do believe it can be very difficult to be made full time in teaching though, I hear many have to sign on during the summer due to the temporary nature of many posts, so I'm not sure where you're getting that info

saabsaab · 20-07-2020 7:32pm

The Irish economy is a bit like a small boat on the big sea. It needs to ride the waves as they make it bob up and down in a storm unlike a large ship that can cut through the storm.

Wanderer78 · 20-07-2020 7:33pm

saabsaab wrote: »

The Irish economy is a bit like a small boat on the big sea. It needs to ride the waves as they make it bob up and down in a storm unlike a large ship that can cut through the storm.

dont mind that rising tide nonsense, thats more neoclassical ****eolgy

saabsaab · 20-07-2020 7:38pm

Wanderer78 wrote: »

dont mind that rising tide nonsense, thats more neoclassical ****eolgy

No I don't believe in the rising tide raising all boats. Many are holed below the waterline.

Limpy · 20-07-2020 7:38pm

Eventually if covid19 stays around the older people or vunerable will have to stay cocooned, take a vaccine or die.

Wanderer78 · 20-07-2020 7:39pm

saabsaab wrote: »

No I don't believe in the rising tide raising all boats. Many are holed below the waterline.

or i like to say, the tide has a tenancy to become a tsunami....

Wanderer78 · 20-07-2020 7:40pm

Limpy wrote: »

Eventually if covid19 stays around the older people or vunerable will have to stay cocooned, take a vaccine or die.

the elderly are clearly vulnerable in all of this, but this thing is killing relatively healthy young people as well

Geuze · 20-07-2020 10:46pm

Markcheese wrote: »

Commercial rents are a big issue ........ , I've heard of guys with large commercial portfolios who rather have empty buildings than accept a rent reduction,
Shops are the same ...

Why would a landlord leave a building empty?

One solution is to charge some % of the rates to the owner if the building is empty.

Wanderer78 · 21-07-2020 7:05am

Geuze wrote:

Why would a landlord leave a building empty?

Plenty of properties empty around the country, it's sometimes best to do so in the eyes of the landlord.

Correct me if I'm wrong, but wouldn't a land value tax reduce this likely hood?

eddie73 · 21-07-2020 7:47am

Wanderer78 wrote: »

the elderly are clearly vulnerable in all of this, but this thing is killing relatively healthy young people as well

Not in significant numbers.

Every death is a tragedy, but media likes to focus on grim headlines, even if they do not represent the norm. The result of this is the general public's belief that younger people are dying in bigger numbers than they actually are. Factor in co-morbid conditions and this fact is exaggerated even more.

This virus may be a threat to all of our health, but it is a threat to older people's mortality rather than everyone's.

We need to calm down about this.

Wanderer78 · 21-07-2020 7:51am

eddie73 wrote:

We need to calm down about this.

That's fair enough, the media does have a tendency to sensationalise things, but I have heard interviews from relatively young and healthy people that got it, it's a nasty one, with some resulting in serious mental health issues and possibly long term serious physical issues

Dempo1 · 21-07-2020 7:57am

Probably not but it will be a very, very different economy. High Street in particular is pretty much on its last legs and the Covid-19 crisis has essentially pushed forward its demise by 15 years with online the new norm.

I'm not entirely convinced the governments propping up of businesses with the wage subsidy scheme TWSS is a sensible approach, I understand restart grants, loans etc to make up for losses during lockdown but paying 85% of payroll for businesses now reopened and trading normally seems bizzare, more alarming however is the scheme also pays 85% payroll of businesses still closed. This is essentially creating a serious false economy. I don't begrudge and supports but they need to be coherent, sensible and geared toward businesses that are viable, certainly not prop up businesses that need to make hard decisions.

Wanderer78 · 21-07-2020 8:01am

Dempo1 wrote:

I'm not entirely convinced the governments propping up of businesses with the wage subsidy scheme TWSS is a sensible approach, I understand restart grants, loans etc to make up for losses during lockdown but paying 85% of payroll for businesses now reopened and trading normally seems bizzare, more alarming however is the scheme also pays 85% payroll of businesses still closed. This is essentially creating a serious false economy. I don't begrudge and supports but they need to be coherent, sensible and geared toward businesses that are viable, certainly not prop up businesses that need to make hard decisions.

Sme's are the largest employers of the state, take away those supports, and we ll have much bigger problems, in fact I'd say we d probably have extremely serious problems. Many things don't make economic sense right now, but economic theory is fairly flaky anyway

eddie73 · 21-07-2020 8:22am

Wanderer78 wrote: »

That's fair enough, the media does have a tendency to sensationalise things, but I have heard interviews from relatively young and healthy people that got it, it's a nasty one, with some resulting in serious mental health issues and possibly long term serious physical issues

Yes correct, but still not fatal.

I also think that we know that it is a bugger of a virus for sure, in terms of how it can knock certain people around, but the mental health issues have to be seen in the context of the entire covid experience, that includes the lock down and the fact that we cannot escape the viruses media coverage at all at any time. This is bound to up the ante for anyone who gets it, or even those who don't or haven't got it.

To think that it is a clinical issue alone in terms of its effect on mental health is not entirely the full picture imo.

But let's all stay safe in the meantime for sure.

Dempo1 · 21-07-2020 8:22am

Wanderer78 wrote: »

Sme's are the largest employers of the state, take away those supports, and we ll have much bigger problems, in fact I'd say we d probably have extremely serious problems. Many things don't make economic sense right now, but economic theory is fairly flaky anyway

I agree supports are needed but can't accept paying 85% of payroll for a business back trading normally or businesses that remain closed is in slightest bit sensible. It seems extraordinary that this scheme was not more focused and I've absolutely no doubt widespread abuses at play.

If as is being suggested, this scheme could run well into 2021, how in the world is this sustainable, perhaps I'm wrong but I assumed a business is viable or its not. Yes, support businesses that are genuinely strufg for a reasonable period but cover payroll for businesses not struggling or remain closed is a farce.

greenfield21 · 21-07-2020 9:09am

Yes, it's inevitable however it's probably years away. Then we all emigrate.

Wanderer78 · 21-07-2020 9:20am

Dempo1 wrote: »

I agree supports are needed but can't accept paying 85% of payroll for a business back trading normally or businesses that remain closed is in slightest bit sensible. It seems extraordinary that this scheme was not more focused and I've absolutely no doubt widespread abuses at play.

If as is being suggested, this scheme could run well into 2021, how in the world is this sustainable, perhaps I'm wrong but I assumed a business is viable or its not. Yes, support businesses that are genuinely strufg for a reasonable period but cover payroll for businesses not struggling or remain closed is a farce.

funnily enough, we seem to have very little issues bailing out major businesses and corporations, including financial institutions, but when it comes to the largest employer in the state, theres a problem! im sure theres a point where this all becomes unsustainable, but we re probably not there yet, always baring in mind, central banks can never run out of money, but endless money creation with little to show for it, probably wont end well, interesting times

CucamarMor · 21-07-2020 9:36am

lightspeed wrote: »

Hi

All just wondering what are people's thoughts on the risks of a permanent crash?

By permanent I mean more specifically will our economy deteriorate inthat we may be more like an eastern European country. The likes of Poland, Hungary etc dont appear to be poor like Bangladesh or the like but there is a reason so many immigrants from eastern Europe need to come to ireland and uk etc for employment.

I'm struck that Ireland is probably the most at risk country right now in western world for a economic shock.

I'm concluded this based on potential impact from

1.Coronavirus global depression
2. No deal Brexit
3. Significant movement on the cards for measures to be taken by EU Commission to harmonise corporation tax. This may mean sales are taxed in the country where they occur and not where company is headquartered. Hence we would see huge dip in Corp tax receipts and huge loss of low Corp tax advantage that attracts the multinationals.

At some point the impact of depression or recession will pass at some point but issues resulting from Brexit and any corp tax harmonisation could be permanent.

I've a child on the way and looking to buy a house soon presuming my job remains intact. It's a worry to think though that so much could change in the long term.

Is my outlook too pessimistic or realistic?

You're struck by how we're the most at risk western country? Now you sound like the quintessential British attitude of 'we're the centre of everything'. Ireland is one of the least likely to suffer massive detriment in Western Europe given the investment in the country. Furthermore, have you seen Portugal or Spain? Italy? They're at far more risk than us. They've been on the brink of disaster for a long time and could quite easily tip over.

Poland, despite what Poles might say, is a fairly thriving economy relatively speaking. As in Slovakia, Czech Republic etc. Those countries are not 'eastern europe' however, they're central europe and have benefited massively in the last few years. Take Czech Republic where the average salary sits at over 2000 euros p.month and compare it with Bulgaria where the average salary is some 400 euros per month.

Wanderer78 · 21-07-2020 9:47am

CucamarMor wrote: »

You're struck by how we're the most at risk western country? Now you sound like the quintessential British attitude of 'we're the centre of everything'. Ireland is one of the least likely to suffer massive detriment in Western Europe given the investment in the country. Furthermore, have you seen Portugal or Spain? Italy? They're at far more risk than us. They've been on the brink of disaster for a long time and could quite easily tip over.

Poland, despite what Poles might say, is a fairly thriving economy relatively speaking. As in Slovakia, Czech Republic etc. Those countries are not 'eastern europe' however, they're central europe and have benefited massively in the last few years. Take Czech Republic where the average salary sits at over 2000 euros p.month and compare it with Bulgaria where the average salary is some 400 euros per month.

its hard to say where we are in the vulnerability scale, but id say we re far more exposed than you think, never forgetting we re an 'open economy', meaning if things tank, you ll more than likely see capital flight, which is not good, if that happens, our economy will tank very very quickly, and if there ever was, i personally dont think there ever will be, a major global economic crash, it ll be every man for himself, and you may forget about our european friends helping us out, the previous downturn was a fine example of that

Geuze · 21-07-2020 5:49pm

Wanderer78 wrote: »

Plenty of properties empty around the country, it's sometimes best to do so in the eyes of the landlord.

Correct me if I'm wrong, but wouldn't a land value tax reduce this likely hood?

Depends if charged to occupier or owner.

Currently, LA comm rates are levied on the occupier, so the rates can be zero if the premises is empty.

brisan · 21-07-2020 8:58pm

BillyBiggs wrote: »

A lot of businesses will go to the wall, unable to pay creditors and retail landlords. That will have a knock on effect on house prices and emigration. Ireland is probably too small a country to take such a heavy hit. Our government having the horn for lockdown doesn’t help. Can you imagine if you were a pub owner anywhere in Ireland at the moment?

To where
Everywhere is in a recession

Eric Cartman · 18-08-2020 12:42pm

lightspeed wrote: »

Hi

All just wondering what are people's thoughts on the risks of a permanent crash?

By permanent I mean more specifically will our economy deteriorate inthat we may be more like an eastern European country. The likes of Poland, Hungary etc dont appear to be poor like Bangladesh or the like but there is a reason so many immigrants from eastern Europe need to come to ireland and uk etc for employment.

I'm struck that Ireland is probably the most at risk country right now in western world for a economic shock.

I'm concluded this based on potential impact from

1.Coronavirus global depression
2. No deal Brexit
3. Significant movement on the cards for measures to be taken by EU Commission to harmonise corporation tax. This may mean sales are taxed in the country where they occur and not where company is headquartered. Hence we would see huge dip in Corp tax receipts and huge loss of low Corp tax advantage that attracts the multinationals.

At some point the impact of depression or recession will pass at some point but issues resulting from Brexit and any corp tax harmonisation could be permanent.

I've a child on the way and looking to buy a house soon presuming my job remains intact. It's a worry to think though that so much could change in the long term.

Is my outlook too pessimistic or realistic?

The biggest risks to our economy , in order Imo are

1) EU corporate tax rate harmonisation / any upward movement of the 12.5%
2) Any additional taxation leveraged on tech companies by the EU
3) Income tax on high earners increasing
4) US law changes to incentivise relocating jobs back to the US.

Geuze · 19-08-2020 11:09pm

Eric Cartman wrote: »

The biggest risks to our economy , in order Imo are

1) EU corporate tax rate harmonisation / any upward movement of the 12.5%
2) Any additional taxation leveraged on tech companies by the EU
3) Income tax on high earners increasing
4) US law changes to incentivise relocating jobs back to the US.

Good points.

I don't think any EU harmonisation would extend to the CT rate, rather it's the CCCTB that is a risk.

Yes, Trump's talk of moving pharma production back is a worry.

I will add:

Brexit - chance of no FTA
The excessive price level, especially rents

22-10-2020 9:50pm

Collapse of Ireland's economy moved a step closer this week with Finance Minister Pascal O'Donuhue stating the current spending is unsustainable and the future hinges on a vaccine and strong growth next year.

saabsaab · 22-10-2020 10:12pm

salonfire wrote: »

Collapse of Ireland's economy moved a step closer this week with Finance Minister Pascal O'Donuhue stating the current spending is unsustainable and the future hinges on a vaccine and strong growth next year.

Let's pray for an effective vaccine early next year.

KyussB · 23-10-2020 3:04am

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.

Wanderer78 · 23-10-2020 5:51am

salonfire wrote:

Collapse of Ireland's economy moved a step closer this week with Finance Minister Pascal O'Donuhue stating the current spending is unsustainable and the future hinges on a vaccine and strong growth next year.

The ECB can never run out of money, and once again, rising public debt really is okay, it won't mean the end of the world is coming, our fiscally conservative politicans and their advisor's are just hard wired to think it is

Widdensushi · 23-10-2020 6:34am

Wanderer78 wrote: »

The ECB can never run out of money, and once again, rising public debt really is okay, it won't mean the end of the world is coming, our fiscally conservative politicans and their advisor's are just hard wired to think it is

You keep pushing this line, everyone in the country might as well stop working and we will be fine, increase social welfare and pup, no point in college etc either.

Wanderer78 · 23-10-2020 6:44am

Widdensushi wrote:

You keep pushing this line, everyone in the country might as well stop working and we will be fine, increase social welfare and pup, no point in college etc either.

....because it's true, there's truly nothing to be worrying about in regards the deficit, private debt has always been the more dangerous one, but if everyone stopped working, there would be problems, particularly in relation to servicing these debts. Increasing welfare and pup makes perfect sense, but this money would ultimately be needed to be spent into the economy, to be truly effective, increasing the velocity of the money supply, having it resting in accounts is not beneficial to the economy, as it has no velocity. Of course there is a need for continual education and training, to maintain our work force and ultimately our economy, so these debts, both public and private, can be serviced, as 08 showed us what happens when economies are unable to, particularly our private debts

Drifter50 · 23-10-2020 8:08am

salonfire wrote: »

Collapse of Ireland's economy moved a step closer this week with Finance Minister Pascal O'Donuhue stating the current spending is unsustainable and the future hinges on a vaccine and strong growth next year.

Yes he did and driven I understand by the fact that we have 6/7 months liquidity left in our system and thats on a good day which these days we are certainly not having good days.
Sure we can keep borrowing and Yes money was never cheaper and we can lean on the ECB but this seems likely to last for 2021/2022 and maybe into 2023. How long do you think we will be able to borrow if we are a basket case.

We have to avoid consigning the future generation into austerity, debt, emigration. Soon the pontificating academics will have to have a reality check and the sooner the better

Wanderer78 · 23-10-2020 8:10am

Wanderer78 wrote: »

The ECB can never run out of money, and once again, rising public debt really is okay, it won't mean the end of the world is coming, our fiscally conservative politicians and their advisor's are just hard wired to think it is

Drifter50 wrote: »

Yes he did and driven I understand by the fact that we have 6/7 months liquidity left in our system and thats on a good day which these days we are certainly not having good days.
Sure we can keep borrowing and Yes money was never cheaper and we can lean on the ECB but this seems likely to last for 2021/2022 and maybe into 2023. How long do you think we will be able to borrow if we are a basket case.

We have to avoid consigning the future generation into austerity, debt, emigration. Soon the pontificating academics will have to have a reality check and the sooner the better

..........

kippy · 23-10-2020 8:38am

Drifter50 wrote: »

Yes he did and driven I understand by the fact that we have 6/7 months liquidity left in our system and thats on a good day which these days we are certainly not having good days.
Sure we can keep borrowing and Yes money was never cheaper and we can lean on the ECB but this seems likely to last for 2021/2022 and maybe into 2023. How long do you think we will be able to borrow if we are a basket case.

We have to avoid consigning the future generation into austerity, debt, emigration. Soon the pontificating academics will have to have a reality check and the sooner the better

One would have to guess that at some point globally there's either a massive amount of conflict coming and/or a massive amount of debt restructuring/forgiveness.
As you say the current situation is not sustainable in the long term - someone will have to pay it all back.
It would be good however, that this crisis is used to improve some of services (which it has already) and focus the mind on what is important.

Wanderer78 · 23-10-2020 8:46am

kippy wrote: »

One would have to guess that at some point globally there's either a massive amount of conflict coming and/or a massive amount of debt restructuring/forgiveness.
As you say the current situation is not sustainable in the long term - someone will have to pay it all back.
It would be good however, that this crisis is used to improve some of services (which it has already) and focus the mind on what is important.

we really need to move on from these fears of growing debt, particularly public debt, 08 truly showed us what happens when theres an over reliance on private debt to fulfil our needs of a growing money supply, in order for our economies to function and grow, its simply far too volatile. our private debt issues are more than likely gonna resurface in the new year, if we truly want to entertain debt jubilees, we truly should be considering it in the private domain. public debt can be rolled almost indefinitely, as long as its regularly serviced, this works fine, and is far less volatile compared to private debt

experiMental · 23-10-2020 9:01am

lightspeed wrote: »

Hi

All just wondering what are people's thoughts on the risks of a permanent crash?

By permanent I mean more specifically will our economy deteriorate inthat we may be more like an eastern European country. The likes of Poland, Hungary etc dont appear to be poor like Bangladesh or the like but there is a reason so many immigrants from eastern Europe need to come to ireland and uk etc for employment.

I'm struck that Ireland is probably the most at risk country right now in western world for a economic shock.

I'm concluded this based on potential impact from

1.Coronavirus global depression
2. No deal Brexit
3. Significant movement on the cards for measures to be taken by EU Commission to harmonise corporation tax. This may mean sales are taxed in the country where they occur and not where company is headquartered. Hence we would see huge dip in Corp tax receipts and huge loss of low Corp tax advantage that attracts the multinationals.

At some point the impact of depression or recession will pass at some point but issues resulting from Brexit and any corp tax harmonisation could be permanent.

I've a child on the way and looking to buy a house soon presuming my job remains intact. It's a worry to think though that so much could change in the long term.

Is my outlook too pessimistic or realistic?

Irish economy will do fine if the banks will loosen the grip on it. There is a large enough population of people both in government and other semi-state institutions who are able to avert an economic shock.

Also - since at least one person in nearly every major company and large institution's Board of Directors is an accountant of some sort, they can figure out how to make money from thin air.

Could Ireland economy collapse permanently?

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