im not sure what can be done apart from that. no money to kickstart capital projects, education, a proper health service etc. cant see anything that will stimulate economic activity bar facilitating global tax evasion by MNC’s. They must be an awful shower of tards in Europe if they think the country can continue to payback the bondholders who bet on the Irish pyramid scheme. The state is being robbed here, have no doubt about it. But as previous Irish generations turned a blind eye to the horrific excesses of the state church, the current one stands idly by while Eurocrats rob our money to cover up huge holes in their own balance sheets.
the tax I paid working in Ireland is long since gone. Probably fixing your cleft lip. I dont begrudge you of course. you must have looked an awful state.
Geithner = Goldman Sachs
Summers = Goldman Sachs
Draghi (Italian taking over from Trichet as head of the ECB in October) = Goldman Sachs
When Jim Corr talks about a one world government he actually isn’t that far off - the international banking industry and especially Goldman Sachs fit the bill as far as I can see
it is really.
saves on interest payments for a start
gives us a real figure for GNP/GDP
might actually inform people of where we really are
there’s no going back to 2007 Sid, it was all an illusion.
I agree we will need to cut again though, but that’s inevitable. We’re going back to 2003 pay, benefits and spending levels.
I don’t recall reading much about the great depression of 2003.
Morning Ireland had the usual guff about having to cut pay by a third at least for nurses, guards and teachers (the holy trinity of the liberal media, and a convenient emotional smokescreen for any politico/journo afraid to debate with someone like kelly or gurdgiev)
What nobody seems willing to acknowledge is that cutting pay and social welfare by a third is inevitable.
Another aspect of the debate is that no presenter has had the wherewithal to press one of these eejits on how exactly they propose to avoid pay and welfare cuts.
Kelly’s just stating the obvious, in his own inimitable fashion. Close the deficit (better yet, get to a surplus) and then all sorts of options open up to deal with the banks. The deficit is what is unsustainable. Any 2nd year business studies student knows the books are supposed to balance.
Very strong rumours doing the rounds regarding Greece as well it seems.
Almost inevitable at this stage that they are going to default sooner rather than later, and also a lot of talk about them leaving the Euro.
2007 was all an illusion. Well duh. Property was in a bubble since 1997, the wider economy since no later than 2001.
I have a lot of respect for Kelly but if you cut 18 to 20 bilion out of the economy in one go, there WILL be riots. It will mean real poverty for many. It won’t balance the books because tax revenues will plummet also. So the main aim of the cuts is not even achieved. Discretionary spending which is already very low will collapse, meaning thousands of businesses go to the wall. Massive mortgage default ensues, plunging the banks into an even worse crisis than the stress tests have bargained for (why a new Irish bank is not set up I don’t know). Unemployment goes up, emigration goes up.
Maybe this will happen anyway if we don’t do what Kelly suggests, it probably will. Fucked if I know really.
of course tax revenues will plummet (forgive me if I throw in an egregious duh here)
my point is that the tax revenues we are currently in receipt of, the ones that would plummet, are based on recycled government borrowing, borrowing that’s paid for at quite high rates.
we need to adjust to cope without these revenues. we will always borrow more than it returns to the exchequer in tax, so cut the borrowing.
the average punter and the irish budget share a few similarities. money owed to banks is one.
just like the govt needs to walk away from the banks , mortgage default on a major scale is inevitable. luckily we’re not short of houses.
might not be detached 7-bedroom, 9-bathroom mcmansions, but nobody’s going to have to live in trees.
equally they can’t live in houses they can’t afford, subsidised by the ever-dwindling ranks of the tax payer, maintaining high housing costs and wage costs, and reducing our attractiveness to FDI, reducing our growth potential.
if the banks don’t matter anymore, the mortgage defaults aren’t as damaging, and the ECB can inflate or monetise the debt. or whatever the hell else they feel like doing, it’s their problem.
you could take Kelly’s suggestion of letting the ECB pick over the carcass, or let the bondholders do it. i’d love to see abramovich’s approach to sweating an asset.
social unrest is as inevitable as default, and almost as badly needed. we might finally start asking what do we need to change to ensure this doen’t happen again.
I just can’t see how we can avoid balancing the books. From that premise, it’s simply a question of the timeframe needed. Immediately has risks, but also advantages.
Imagine Noonan, flanked by the Rubber Bandits walking into Trichet’s office, rehashing the Blazing Saddles routine:
we’ve no deficit and we’re serious about this burning bondholders lark. know a few lads back home who burnt a car once while there were kids in it. say they’ll do the bondholdes for free.
your move Jean old bean.
kelly’s right. the deficit must be cut. whatever about the banks, who are probably too big to save, leaving aside any moral argument as to whether they should be saved, the deficit is money we borrowed. FF borrowed it and spent it on buying elections and inflating bubbles, and now we deal with the results.
Im not sure how fair or realistic is it but they are going to have to start looking at house swaps for people. Since the state owns the banks and the ghost estates, they might aswell start offering those struggling in McMansions the chance to live next to non nationals in a 3 bed in the midlands with a reduced mortgage. At least then they would have some disposable income to spend.
They either A: let inflation devalue their debt over time (or actively deflate their currency). €1billion in 1980 was worth a lot more than €1 billion now.
or B: They grow their way out of it. We never reduced our debt to speak of we just reduced our debt to GDP ratio.
Our only option is to grow our way out of this. Obviously there needs to be substantial cuts but we can’t shrink our way out of this, so cutting all that money out of the economy like Morgan Kelly says is economic suicide.
MacWilliams was on with Pat Kenny yesterday. said that the Irish savings ratio is something like 16% now. anyone that has money is afraid of their shit to spend it because they can see no end to the bad news. He says the only way up is to renegotiate the deal a put a floor to it… And set up new banks to take deposits and lend, forget about BOI and AIB. So until people feel confident to spend money, the Govt cuts will leave big hole in the economy.
Surely the only sane thing to do in our circumstance is nothing other than whatever token gestures the troika want us to take as a condition of ongoing support. We are not going to repay this debt and nobody seriously expects us to. But nobody is going to write it off for us either. That would be political suicide and moral hazard of the worst kind. A black swan event will come around the corner someday soon , our little problems will look trifling and will be rolled into some kind of settlementor will evaporate due to hyper inflation. Who knows what that will be. Spanish collapse,German collapse, US collapse? World War maybe? Until then we should impose a good dose of austerity which is the only state we are really comfortable with anyway and wait for the event.
that’s all well and good JG but when your interest payments exceed your income tax take you’ve gone beyond growth rates as a means of solving the problem. we can’t even pay the interest, let alone the debt.
option B is gone, unless WW3 starts up somewhere soon
option A in the eurozone with a german central bank in all but name is also a non-runner.