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Could Ireland economy collapse permanently?

245

Comments

  • Registered Users Posts: 26,897 ✭✭✭✭Dempo1


    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.

    Is maith an scáthán súil charad.




  • Registered Users Posts: 976 ✭✭✭greenfield21


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


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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


  • Registered Users Posts: 23 CucamarMor


    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.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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


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  • Registered Users Posts: 12,992 ✭✭✭✭Geuze


    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.


  • Registered Users Posts: 2,242 ✭✭✭brisan


    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


  • Registered Users Posts: 26,283 ✭✭✭✭Eric Cartman


    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.


  • Registered Users Posts: 12,992 ✭✭✭✭Geuze


    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


  • Registered Users Posts: 3,078 ✭✭✭salonfire


    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.


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  • Registered Users Posts: 7,698 ✭✭✭saabsaab


    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.


  • Registered Users Posts: 2,314 ✭✭✭KyussB


    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.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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


  • Registered Users Posts: 5,131 ✭✭✭Widdensushi


    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.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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


  • Registered Users Posts: 617 ✭✭✭Drifter50


    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


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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

    ..........


  • Registered Users Posts: 18,357 ✭✭✭✭kippy


    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.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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


  • Registered Users Posts: 1,137 ✭✭✭experiMental


    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.


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  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    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.

    one of the main reasons why i advocate for public banking


  • Posts: 2,078 ✭✭✭[Deleted User]


    If Biden wins the election, the US will drop all coverage of Corona and stop locking down businesses in blue states. We will likely have a vaccine by then too. Then they will emphasise the growing mountain of scientific papers that show corona isn't that bad. Then the economy will take off next year. We'll probably still be in lockdown reporting cases on RTE.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    If Biden wins the election, the US will drop all coverage of Corona and stop locking down businesses in blue states. We will likely have a vaccine by then too. Then they will emphasise the growing mountain of scientific papers that show corona isn't that bad. Then the economy will take off next year. We'll probably still be in lockdown reporting cases on RTE.

    what?


  • Registered Users Posts: 18,357 ✭✭✭✭kippy


    Wanderer78 wrote: »
    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

    The problem is this ever increaseing demand for "growth". What's wrong with a fair society with a standard of healthcare/education and housing that work for society? Rather than looking for more and more "growth".
    We've a growing economy for the past X years - yet we still lack a lot.

    I don't really get why you are making the points you are making as stating that private debt is worse that public debt, doesn't make unsustainable public debt the right course of action.
    You are only every one pandemic/global recession away from needing to borrow more and more, what happens when you cannot borrow any more or have to pay it back.


  • Registered Users Posts: 1,126 ✭✭✭turbbo


    Was just thinking about all the social welfare payments in Ireland this year because of lockdowns etc. and effect on local economy.
    It really made me think what would we do if China didn't make everything we consume these days - clothes, computers, phones - practically everything is either made in China or consists of parts made in China. We have lost a serious amount of knowledge expertise and skill in loosing those jobs to other countries(and replacing them with social welfare here) - we still consume and we have become very dependent just like the rest of the western world. The shock will come when china is in a position to charge what we can't afford anymore. How soon that will be who knows.


  • Registered Users Posts: 7,650 ✭✭✭growleaves


    lightspeed wrote: »
    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.

    4. Fungxit


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    kippy wrote: »
    The problem is this ever increaseing demand for "growth". What's wrong with a fair society with a standard of healthcare/education and housing that work for society? Rather than looking for more and more "growth".
    We've a growing economy for the past X years - yet we still lack a lot.

    I don't really get why you are making the points you are making as stating that private debt is worse that public debt, doesn't make unsustainable public debt the right course of action.
    You are only every one pandemic/global recession away from needing to borrow more and more, what happens when you cannot borrow any more or have to pay it back.

    some fair points, but unfortunately its the way we have designed our economies, largely debt based, with the majority of that in the private domain, this is ultimately causing our growing inequality issues, particularly with what this debt is being used for, mainly continual asset price inflation, this is truly unsustainable, and voters are letting their anger known, hence trump, brexit, rise of the right, and even our own radical election outcome.

    we keep defaulting in regards our need for continuing the money supply, towards the private sector, and 08 showed us, this is dangerous, but we keep doing it, so thankfully, the government seen some sort of sense, during the budget, and is continuing to take on public debt, this is far safer, but does introduce its own problems.

    its extremely important to remember, the act of paying down debt, in both the public or private domains, is in fact, the destruction of money, so in order for our economies to function, credit/debt must be continually created, in both sectors, but with controls, in order to do so.

    central banks can never run out of money, but if an economy runs out of its ability to service its debts, both public and/or private, you significantly run out of options for your economy to function. this is what happened in 08, the bubble burst, and we ran out of our ability to service our debts, particularly in the private domain
    turbbo wrote: »
    Was just thinking about all the social welfare payments in Ireland this year because of lockdowns etc. and effect on local economy.
    It really made me think what would we do if China didn't make everything we consume these days - clothes, computers, phones - practically everything is either made in China or consists of parts made in China. We have lost a serious amount of knowledge expertise and skill in loosing those jobs to other countries(and replacing them with social welfare here) - we still consume and we have become very dependent just like the rest of the western world. The shock will come when china is in a position to charge what we can't afford anymore. How soon that will be who knows.

    we ve actually replaced most of these jobs with lower paid, more precarious employment, primarily in the retail and service sectors, this to is causing serious issues, most notably in regards property issues


  • Registered Users Posts: 247 ✭✭CoronaBlocker


    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?


    Was Poland not the only country in the EU to not have any consecutive negative quarters right through the financial crisis? Have they not shown massive growth and consistency therein for years? Are many Poles not now returning to Poland and taking up higher paid roles than here (anecdotally, my ex-wife is Polish and doing exactly this)?

    Ireland will be getting tested for more than the usual places as it tries to pull itself out of our new, self-imposed recession here. We need to be very careful - and observant to trends.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    Ireland will be getting tested for more than the usual places as it tries to pull itself out of our new, self-imposed recession here. We need to be very careful - and observant to trends.

    Self-imposed, how?


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  • Registered Users Posts: 26 truth and logic


    Good jobs are on the way out. Automation is the future and we should welcome that. Of course, we'll need new ways to provide essential services to people, and people will need to find new ways to spend their time.

    I have no problem with this but many people don't want to recognise that AI and automation will lead to mass unemployment. The only solution is a Universal Basic Income, or a Freedom Dividend, and a reorganisation of society. We should be happy at the prospect of it no longer being necessary for us all to work.

    One poster said the central bank can just print money, and that's true, and another poster sarcastically said 'well, then we can all stop working', and of course there's a good point there, .. we can't all just stop working surely and just sit around doing nothing? Where would the food come from?


    Automation and AI will provide the food. So, problem solved.

    Of course, the real world is slightly more complex so what really happens is that corporations continue to make luxury goods, which some people want. Therefore, some people work in order that they will be rich enough to purchase luxury goods. Corporations make a profit selling luxury goods. They pay sufficient tax so that everyone, rich and poor, can be paid a basic universal income. Many people are happy with the basic income as it provides for a good type of life, with no work and no harassment from state employees.


    Drugs like cannabis would be legal to grow at home, to alleviate the boredom for some people only. If you don't like drugs then you can go to the opera and be high brow and avant garde if you wish but other people can sit around with the spliffs and they shouldn't be judged for that.

    As I said, we need a reorganisation of society.


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