2009 Borrowing

[poulgorm]

The government borrowed € 24.6 billion last year. Just announced.

The deficit for 2010 is expected to be similar.

We need to cut the shit out of those whose income is funded by taxes. Public servants, unemployed, you have seen nothing yet.

The 2009 cuts were only a teaser.

[gaffer falls]

Starting with the 8billion spent on unneeded quangos

[Haro]

The government borrowed € 24.6 billion last year. Just announced.

The deficit for 2010 is expected to be similar.

We need to cut the shit out of those whose income is funded by taxes. Public servants, unemployed, you have seen nothing yet.

The 2009 cuts were only a teaser.

Yet another Irishman who knows nothing about Economics. You could be in government!

You start taking money from people that money never gets back into the economy. You save the government at the expense of local business going down, damaging the economy more in the long run. As well as how much of a comeplete cunt you are and how much I hope you end up unemployed by the end of the year.

[doppellanger]

they're incredible sums really. I heard someone on the radio saying reintroducing university fees would save 700 million but that barely covers the bit after the decimal point.
And the cuts that have been made to salaries, a lot of those would have been taxed at 40% anyway, so they're not saving as much as the headline figures.

They talk about a return to growth but I don't really see that happening. Thousands of people are leaving the country, the construction industry is on its knees with its head in the oven, government can't afford any stimulus and neither can the consumer. Where is the growth in the economy going to come from?

I'd see most of the next decade as a write-off for Ireland. Brush up on your European languages, lads, you might need them if youse want a job.

[Haro]

Thousands of people are leaving the country,

This is why cuts to welfare are a bad idea, at least in the case of them halving the dole for under 21s! First off this is going to force them to live back at home if they haven't gotten a place in education which in many cases makes job searching more difficult. And 25% cut for under 24s is pretty steep too. You're going to have the young working body skipping out of the country, so how was it a smart idea?

[o_2_b_a_rebel]

This is why cuts to welfare are a bad idea, at least in the case of them halving the dole for under 21s! First off this is going to force them to live back at home if they haven't gotten a place in education which in many cases makes job searching more difficult. And 25% cut for under 24s is pretty steep too. You're going to have the young working body skipping out of the country, so how was it a smart idea?

You dont seem to have a serious aptitude for economics yourself lad. Cutting the dole to levels still above those of similar countries is not a bad thing. Neither is people moving home if they cannot afford an apartment or to some extent people emigrating if they cannot find work.

Do you understand that money borrowed by us each year actually has to be paid back with interest and that this is not just a game of monopoly that you can put back in its box when Coronation Street comes on?

[diar2me]

You dont seem to have a serious aptitude for economics yourself lad. Cutting the dole to levels still above those of similar countries is not a bad thing. Neither is people moving home if they cannot afford an apartment or to some extent people emigrating if they cannot find work.

Do you understand that money borrowed by us each year actually has to be paid back with interest and that this is not just a game of monopoly that you can put back in its box when Coronation Street comes on?

Classic! Haro is a retarded knob! I study economics yet he knows more than I and in fact anyone who disagrees with his stupid and ill informed bullshit rants! GOBSHITE!

[Haro]

You dont seem to have a serious aptitude for economics yourself lad. Cutting the dole to levels still above those of similar countries is not a bad thing. Neither is people moving home if they cannot afford an apartment or to some extent people emigrating if they cannot find work.

But very few people of that age are going to find work, and are going to have no money. A mass exoddus is likely because of this and having a lack of young, able workers is never a good thing when trying to recover an economy like ours is now. This isn't the 60s. The government are doing nothing to entice them to stay.

Do you understand that money borrowed by us each year actually has to be paid back with interest and that this is not just a game of monopoly that you can put back in its box when Coronation Street comes on?

Do you understand you're a patronising shit who mistakes "harsh" viewpoints for practical ones? You don't seem to understand that shitty decisions in terms of cutbacks can cause much more long term damage than paying back a bit of interest. At least the government can keep borrowing for the here and now - many people have ended up in jail being unable to pay debts(thus being a further strain on the system). The level of personal debt is insane and many parents simply cannot afford to keep their children back at home again. You think you're being the logical, practical one but you're very far from it.

[Tommy O]

'At least the government can keep borrowing for the here and now'

And shur thats all that matters ..........

[Haro]

'At least the government can keep borrowing for the here and now'

And shur thats all that matters ..........

You know what you have some nerve to say that, given your side of the argument has the amazing habit of ignoring everthing but National Debt, constantly.

[How bad boy]

they're incredible sums really. I heard someone on the radio saying reintroducing university fees would save 700 million but that barely covers the bit after the decimal point.
And the cuts that have been made to salaries, a lot of those would have been taxed at 40% anyway, so they're not saving as much as the headline figures.

They talk about a return to growth but I don't really see that happening. Thousands of people are leaving the country, the construction industry is on its knees with its head in the oven, government can't afford any stimulus and neither can the consumer. Where is the growth in the economy going to come from?

I'd see most of the next decade as a write-off for Ireland. Brush up on your European languages, lads, you might need them if youse want a job.This is the problem. I've said it from day one of this crisis that jobs are the be all and end all. Nothing, not the deficit, levels of spending, the comparative levels of social welfare or the general incompetence of those in the upper echelons of power matter more than jobs.

Improvement of education levels in the workforce is probably second on the "What's going to get use out of this mess in the long term" list, while social welfare comes third, in the "let's not completely fuck the country up while we're at it" category.

Reintroducing fees is essentally working against both.

This seems to be lost on those in power.

There's plenty of construction needed in Ireland. Infrastructure galore is desperately needed, train lines, road improvements, port improvements, airport improvements, schools, hospitals. A few power plants wouldn't go amiss either. Two nuclear plants, if fast-tracked and built by a foreign nuclear energy supplier would provide up to 10,000 jobs, all foreign financed at a stroke. It would also enable us to stop destroying valuable bog land, open up the Irish electricity supply network and eliminate our domestic electricity dependence on fossil fuels.
The exact same logic was used for the construction of Ardnacrusha at the time.
Make it a MOX plant (Areva are making some great advances in this field) and Ireland could make a fortune as a nuclear fuel reprocessor, something that is badly needed in the world over the next 50-100 years..

There are dozens of things could be done. The government that got us into this mess isn't going to get us out of it. Hammering the young and poor, those least likely to react politically, is not the answer. Neither is tapping around the edges of wage reform. Wage reform at the highest pay level is long overdue and necessary, but it's a collapse in revenue and a masssive increase in unemployment payments that is the problem. Address unemployment and your problem is solved.

I don't see much evidence of the unemployment being actively tackled. FFS, the cunts took an extra week's holidays at Christmas. I hope they fucking spend it crawling on their hands and knees to the door of every MNC they could find, begging them to hire staff.

Instead, I'm almost positive 90% of the time was spend pissed.

Bastards.
Classic! Haro is a retarded knob! I study economics yet he knows more than I and in fact anyone who disagrees with his stupid and ill informed bullshit rants! GOBSHITE!
I too have studied economics and his points, while roughly made, aren't entirely economically incoherent. I have made the exact same argument myself numerous times here.

[Haro]

You're right, there are a lot of things we could desperately do with building. For example the train lines are pretty piss poor, there should be one direct from Cork to Galway, a lot of roads are absolutely dire, plenty of annoying choke points to be bypassed, etc.

They're making cutbacks to education, and severe cuts to welfare for young people. Given these are the people filling future jobs, how is this a good idea? Yet you have apparently half the forum coming out in support of this. I think this represents a deeper problem with the Irish mentality.

I'm still not entirely convinced about Nuclear power. While I'm fully aware it's a lot safer than it was in the 60s and every low in waste unless we get some non-Irish in to construct and run it I'd be worried about shoddy workmanship. The "not in my backyard" thing makes it very difficult too.

Classic! Haro is a retarded knob! I study economics yet he knows more than I and in fact anyone who disagrees with his stupid and ill informed bullshit rants! GOBSHITE!

All you ever post in response in shit like this whereas I at least make an effort to make a point. You are quite possibly the worst poster in the whole of PROC. Even Piehead makes some worthwhile posts.

People need to understand that Economics is more than Government has no money, make Cutbacks, yo. I'm not particularly good at Economics myself, but I don't have this ridiculous reductionist attitude most Irish people seem to have in trying to solve this problem. Like I said it's a deeper problem with the Irish mentality than just being shit at Economics - and I think the public vs. private sector debacle brought it to light. Many Irish people just don't think of "people".

[doppellanger]

You dont seem to have a serious aptitude for economics yourself lad. Cutting the dole to levels still above those of similar countries is not a bad thing. Neither is people moving home if they cannot afford an apartment or to some extent people emigrating if they cannot find work.

Do you understand that money borrowed by us each year actually has to be paid back with interest and that this is not just a game of monopoly that you can put back in its box when Coronation Street comes on?

people moving home is terrible for the economy. If someone is living in Cork city they might at least have a small chance of a job, or part time work or something, but if they move back to Clogheen or Ballyduff or wherever they'll have no job and their only contribution to the economy will be what they spend down the pub at the weekend.

People emigrating is also bad for the economy. When the population was growing during the boom years the economy was growing as well. The population is likely to be shrinking for the next few years and the economy will find it hard to grow on the back of a shrinking economy. (It's probably good for the people emigrating though.)

The first to go will be the emigrants who arrived recently. The emigrants who arrived a few years ago will find it more economical to stay while they have unemployment benefit which they are entitled to. If a Pole has been working here for 4 or 5 years and gets laid off they can get benefit for maybe two years and it will probably work out at more than they would get for working in Poland. They might not be entitled to unemployment assistance after the two years so the next couple of years will see people leaving in dribs and drabs.

And where is the jobs growth supposed to come from? Construction is a busted flush for the next decade. Tourism is at its lowest trough in 5 years. Manufacturing is going east, to Poland, Hungary, China. A declining population with diminishing spending power due to cutbacks suggests that the retail and service sector is not going to be expanding that much. The tech sector never really recovered from the dot-com bust because construction sucked up all the capital from 2003 on.

Tell me, where is the growth supposed to come from? Agriculture?

Ideas, anyone?

[Haro]

There's a lot of biomedical research etc. we could have gotten behind but didn't. And now we're only cutting the kind of thing that would lead to that.

[diar2me]

You're right, there are a lot of things we could desperately do with building. For example the train lines are pretty piss poor, there should be one direct from Cork to Galway, a lot of roads are absolutely dire, plenty of annoying choke points to be bypassed, etc.

They're making cutbacks to education, and severe cuts to welfare for young people. Given these are the people filling future jobs, how is this a good idea? Yet you have apparently half the forum coming out in support of this. I think this represents a deeper problem with the Irish mentality.

I'm still not entirely convinced about Nuclear power. While I'm fully aware it's a lot safer than it was in the 60s and every low in waste unless we get some non-Irish in to construct and run it I'd be worried about shoddy workmanship. The "not in my backyard" thing makes it very difficult too.



All you ever post in response in shit like this whereas I at least make an effort to make a point. You are quite possibly the worst poster in the whole of PROC. Even Piehead makes some worthwhile posts.

People need to understand that Economics is more than Government has no money, make Cutbacks, yo. I'm not particularly good at Economics myself, but I don't have this ridiculous reductionist attitude most Irish people seem to have in trying to solve this problem. Like I said it's a deeper problem with the Irish mentality than just being shit at Economics - and I think the public vs. private sector debacle brought it to light. Many Irish people just don't think of "people".

Ok so for the last time, because I have given you my opinion on a number of occasions, but clearly you choose to ignore it. I am a fan of the high taxation in a boom and cutting taxation in a recession. It gives more balance to an economy. On one hand it dulls down massive unsustainable growth which we had and in a recession cutting taxes gives people more buying power which they don't have. In my opinion this is the best option of all the taxation systems, however, and this is important for you to read. WE DID NOT TAX HEAVY IN THE BOOM, therefore we are left with no reserves, massive wage and dole bills and a national debt that is not only crippling us now but also our kids and their kids etc. It is simply impossible to have a low tax system and a high wage bill in a boom and then sustain both of these when the shit hits the fan. If we had had a high taxation system and not so overpaid public servants in a boom I would probably be for giving payrises and cutting taxes, however, ffs would you please just look at our national debt and how fast it is increasing and then try to justify your argument cause you simply won't!

[How bad boy]

And where is the jobs growth supposed to come from? Construction is a busted flush for the next decade. Tourism is at its lowest trough in 5 years. Manufacturing is going east, to Poland, Hungary, China. A declining population with diminishing spending power due to cutbacks suggests that the retail and service sector is not going to be expanding that much. The tech sector never really recovered from the dot-com bust because construction sucked up all the capital from 2003 on.

Tell me, where is the growth supposed to come from? Agriculture?

Ideas, anyone?
You're right about the immigrants and current emigration, it's economically destructive. Much of the boom has been because of the importation of young, well educated eastern europeans that have contributed enormously to the country's economy whilst taking virtually nothing in in social benefits.

Construction in the private sector is a busted flush. There's a vast amount of infrastructure construction needed in Ireland. A smart government would have seenthis collapse in house building and put cash reserves aside, to spend them now, getting what the state needs at half the previous price.

Tourism is almost dead. Well, not dead, but there isn't that much to attract people to Ireland above current levels. I would mostly leave the tourism sector sort itself out.
As for manufacturing, Ireland has never been strong in manufacturing. It makes up a very small percentage of GDP, relative to most other advanced economies. No, service export is where Ireland should focus. Some tech sectors, such as telecoms, are on the brink of another boom. They've been cutting to the bone for the past 9 years, the shift from 3G to 4G mobile networks, as one example, is going to require massive infrastructure.
The networking requirements for global Smart Grid development are said by some experts in the field to be three times bigger than the current internet. There's also the forthcoming OS (both fixed and mobile) 'wars', that will require vast amounts of programming effort.

Haro is right WRT biomedical research, but I would say he's overstating it. UCC in particular has worked hard to help build on the success we have in Cork in this field. I wouldn't write it off, but it's not a mature industry yet, the number of available jobs isn't what it could be yet. Needs a lot of training of employees.


So construction probably should be either state or utility led in the short term. Focusing on the right area, tech could provide huge numbers of jobs, as could biomedical.

The real sneaky one could be to poach financial companies from other districts. Almost every other advanced country is attacking those who provide financial services, both verbally and in the pocket. If Ireland provides a safe haven for these shysters, at least from a personal financial point of view, money and income could flow in relatively rapidly.



Of course, all of this requires foresight and strategic thinking, so it won't be done.


Last one off the island, turn off the lights.

[How bad boy]

Ok so for the last time, because I have given you my opinion on a number of occasions, but clearly you choose to ignore it. I am a fan of the high taxation in a boom and cutting taxation in a recession. It gives more balance to an economy. On one hand it dulls down massive unsustainable growth which we had and in a recession cutting taxes gives people more buying power which they don't have. In my opinion this is the best option of all the taxation systems, however, and this is important for you to read. WE DID NOT TAX HEAVY IN THE BOOM, therefore we are left with no reserves, massive wage and dole bills and a national debt that is not only crippling us now but also our kids and their kids etc. It is simply impossible to have a low tax system and a high wage bill in a boom and then sustain both of these when the shit hits the fan. If we had had a high taxation system and not so overpaid public servants in a boom I would probably be for giving payrises and cutting taxes, however, ffs would you please just look at our national debt and how fast it is increasing and then try to justify your argument cause you simply won't!
Of course Ireland should have only incremented public spending at a rate at or below inflation, but it still doesn't mean that cutting spending now is the right thing to do.

I could list example after example that show that not only is it not the best thing to do, there are plenty of examples that suggest it's one of the primary creatorsof long depression-length recessions.

Saying "This is the best economics, but I wouldn't start from here, if I was you" is mostly useless. Surely we should be using the best economics for this situation, rather than forcing ourselves to opt for second, third or fourth best options.

[diar2me]

Of course Ireland should have only incremented public spending at a rate at or below inflation, but it still doesn't mean that cutting spending now is the right thing to do.

I could list example after example that show that not only is it not the best thing to do, there are plenty of examples that suggest it's one of the primary creatorsof long depression-length recessions.

Saying "This is the best economics, but I wouldn't start from here, if I was you" is mostly useless. Surely we should be using the best economics for this situation, rather than forcing ourselves to opt for second, third or fourth best options.

It's Economics, you can't just decide half way through a cycle that "oh wait, maybe we should have done it the other way". Having low tax and high wages in both boom and recession is a clear indication of just how deluded the mindset is in this country. Everyone wanted higher wages and low taxes in the boom and now you want the same. It just doesn't work that way. Source: Year 1 Economics!

[How bad boy]

It's Economics, you can't just decide half way through a cycle that "oh wait, maybe we should have done it the other way". Having low tax and high wages in both boom and recession is a clear indication of just how deluded the mindset is in this country. Everyone wanted higher wages and low taxes in the boom and now you want the same. It just doesn't work that way. Source: Year 1 Economics!
I've argued this one to death on here before. I don't have the time to do it right now. Needless to day, yes, you can change your approach halfway through a cycle (when exactly does a cycle start and end?).

Who said anything about maintaining high spending and low taxes indefinitely? I'm arguing about timing. The gap needs to be bridge, of that, there is no doubt. Now is not the right time to do it as there is a very, very real chance that heavy cuts, like those currently planned, will do little but push the country back into recession, bringing about the dreaded 'double dip' recession.

If you wish to talk Year 1 Economics, I can do that, but to be honest, the approach they teach you there is simplistic and unrealistic, the sort of economics that has led to the current crisis.

[The Zurich Connection]

This is the problem. I've said it from day one of this crisis that jobs are the be all and end all. Nothing, not the deficit, levels of spending, the comparative levels of social welfare or the general incompetence of those in the upper echelons of power matter more than jobs.

Improvement of education levels in the workforce is probably second on the "What's going to get use out of this mess in the long term" list, while social welfare comes third, in the "let's not completely fuck the country up while we're at it" category.

Reintroducing fees is essentally working against both.

This seems to be lost on those in power.

There's plenty of construction needed in Ireland. Infrastructure galore is desperately needed, train lines, road improvements, port improvements, airport improvements, schools, hospitals. A few power plants wouldn't go amiss either. Two nuclear plants, if fast-tracked and built by a foreign nuclear energy supplier would provide up to 10,000 jobs, all foreign financed at a stroke. It would also enable us to stop destroying valuable bog land, open up the Irish electricity supply network and eliminate our domestic electricity dependence on fossil fuels.
The exact same logic was used for the construction of Ardnacrusha at the time.
Make it a MOX plant (Areva are making some great advances in this field) and Ireland could make a fortune as a nuclear fuel reprocessor, something that is badly needed in the world over the next 50-100 years..

There are dozens of things could be done. The government that got us into this mess isn't going to get us out of it. Hammering the young and poor, those least likely to react politically, is not the answer. Neither is tapping around the edges of wage reform. Wage reform at the highest pay level is long overdue and necessary, but it's a collapse in revenue and a masssive increase in unemployment payments that is the problem. Address unemployment and your problem is solved.

I don't see much evidence of the unemployment being actively tackled. FFS, the cunts took an extra week's holidays at Christmas. I hope they fucking spend it crawling on their hands and knees to the door of every MNC they could find, begging them to hire staff.

Instead, I'm almost positive 90% of the time was spend pissed.

Bastards.

I too have studied economics and his points, while roughly made, aren't entirely economically incoherent. I have made the exact same argument myself numerous times here.

It shows, you'd bore a glass eye to sleep.

[ProfessorPwn]

Frank is the only person around here when it comes to economics and that kind of thing Hammy.

Fantastic poster

[How bad boy]

It shows, you'd bore a glass eye to sleep.Wow. Boring. You've hit me right where it hurts.

You've made me cry now. I hope you're happy.


:(

[diar2me]

Wow. Boring. You've hit me right where it hurts.

You've made me cry now. I hope you're happy.


:(

Honestly though, are you honestly saying with your experience in economics that cuts should not have been made? If you are you must have a vested interest in those cuts. I take your point on driving the economy down but that's just vested interest groups talking that to be honest. You and I both know we cannot continue borrowing to get ourselves out of this. It's what landed us in this mess in the first place. That's like saying to fat person - "I'll make you thin, all you have to do is eat more" I spoke with a guy on here before and he was suggesting that the dole should not be cut because it would affect publicans. I mean if you're from the "lets not cut the dole, cause they'll have to cut down on their pints" camp, taking economics aside, you're just deluded. But that said you seem to have quite a good grasp yourself, even though our opinions differ!

[How bad boy]

Honestly though, are you honestly saying with your experience in economics that cuts should not have been made? If you are you must have a vested interest in those cuts. I take your point on driving the economy down but that's just vested interest groups talking that to be honest. You and I both know we cannot continue borrowing to get ourselves out of this. It's what landed us in this mess in the first place. That's like saying to fat person - "I'll make you thin, all you have to do is eat more" I spoke with a guy on here before and he was suggesting that the dole should not be cut because it would affect publicans. I mean if you're from the "lets not cut the dole, cause they'll have to cut down on their pints" camp, taking economics aside, you're just deluded. But that said you seem to have quite a good grasp yourself, even though our opinions differ!
I don't have a vested interest. I'm living in England, as a self-employed person with no income (and thus, no jobseeker's allowance).

Those cuts should not have been made. As I am looking for business, I don't have a huge amount of free time, so I can't debate this as thoroughly as I'd like to.

Keynesian spending would get Ireland out of this mess. The multiplier does exist, money pumped into social welfare will filter through the rest of the economy. The same is true with lower paid civil servants. Ditto students. If you want to cut pay, cut those with an income above which their marginal propensity to consume is low, above €50k PA should do it. If Ireland had put something away in the fat years, then we'd be laughing.

Arguably, Ireland did put something away, in reducing the national debt and building up the pension reserve fund. Both aren't great, but it's what we have.

Ireland can continue this level of deficit spending for a good while yet, I've calculated in the past that 2-3 years at current levels would probably put us at 100% of debt-GDP. It's not fantastic, but that level isn't the end of the world either.

By doing these cuts now, when dole queues are growing, those who lose out because of less money circulating (contributing further to deflation, BTW. Generally considered devestating for private business) are thrown onto the dole heap. If the government waits until employement starts to grow again, then not only are there fewer problems with strike action, the human capital resources aren't wasted.

Fast rebounds are possible, indeed, with certain policies, they're likely. Ireland, by cutting now is deviating from those past successful strategies. The IMF's disasterous policies of the past, such as the SAPs are based on the policies you, and most Irish people, advocate. The answer is not as simple as most people over there are saying it is.

I've posted this article before, but I think it's worth reposting it. The bit in bold is the important bit.
These cuts ARE likely to prolong the recession and damage employment.

Animal spirits rarely stay down for long

By Paul Ormerod

Published: July 27 2009 19:03 | Last updated: July 27 2009 19:03

The fall in output in the current recession has been sharp. In the US, for example, gross domestic product fell at an annual rate of just above 6 per cent in the two most recent quarters. In Japan, GDP is down by nearly 9 per cent on its 2008 first-quarter peak. The latest UK data suggest output is nearly 6 per cent lower than a year ago, the sharpest fall since 1931.

The conventional wisdom is that the steepness of the fall means the recession will be long, and that the recovery when it happens will be anaemic. In the UK, for example, the National Institute of Economic and Social Research argued last week that GDP per head would take five years to get back to pre-recession levels. This was despite an earlier declaration by the think-tank that the UK has been moving out of recession since output reached a trough in March.

The UK government projects a fall in GDP of 3.5 per cent for 2009, followed by a rise of 1.25 per cent in 2010 and a 3.5 per cent upswing in 2011. But these official forecasts have been widely criticised as too optimistic.

In the US, the consensus among forecasters is that growth at or near trend will not resume until the second half of 2010 and that the 2008 second-quarter peak level will not be regained until the first half of 2011.

As late as the autumn of 2008, economic forecasters in general were far too optimistic about 2009. Are these same forecasters now too pessimistic about recovery? The historical evidence reveals a typical pattern of recession and recovery that suggests this may be so. Very few recessions last longer than two years. And most recoveries, once they start, are strong.

Since the late 19th century, there have been 255 recessions in western economies. Of these, 164 have lasted just one year and only 32 have lasted for more than two years. In other words, two-thirds of recessions last a single year, and only one in eight lasts more than two years. If we strip out the peculiar circumstances at the end of the two world wars, 70 per cent of all recessions last just one year.

The pattern of duration is virtually identical regardless of the size of the initial shock. Even when the initial fall in output has been more than 6 per cent, 70 per cent of recessions have lasted just one year. Even in the 11 examples where the initial fall in GDP was more than 8 per cent in a year, eight recessions only lasted that single year. This does not of course guarantee that the current recessions in western economies will be short-lived, but, equally, the speed of the fall does not imply they will be long.

An analysis of recessions since the second world war shows that those lasting one year or less typically end more abruptly. The average growth rate in the year after such a recession was 3.5 per cent, and in the subsequent year 3.8 per cent. This is compatible with the view that short recessions are essentially inventory cycles. Once inventories are reduced to satisfactory levels, normal production levels resume, and fixed capital investment expenditures postponed during the recession are carried out.

The 4.8 per cent GDP growth rate projected by the UK government from 2009 to 2011 has been criticised as too optimistic. It is in fact rather modest in this wider context.

Recovery was rapid even after the Great Depression. The nature of the economic catastrophe that started in 1929 varied enormously across countries, both in size and duration. The UK escaped relatively lightly with a 6 per cent fall in output spread over two years. In Japan, Denmark and Norway the recession lasted only a single year. But in Germany, Austria, Canada and the US, the cumulative fall in output was between 25 and 30 per cent, with the recession lasting four years in the latter three countries and three in Germany.

However, once the recovery began – in different calendar years in different countries – the average rate of growth was strong. GDP growth in the first year after the Great Depression averaged 4.7 per cent, followed by 4.6 per cent in the second and third years.

The caveat to all this is that the current circumstances are unusual. But so was the Great Depression. There is some evidence to suggest that, after recession has reached a certain size or duration, recovery is then harder and more sluggish. Keynes’ animal spirits become depressed. But it takes an awful lot to depress them for more than a couple of years. Capitalism seems a pretty resilient beast.

The writer is author of ‘Why Most Things Fail’ and a director of Volterra Consulting

[Haro]

Ireland can continue this level of deficit spending for a good while yet, I've calculated in the past that 2-3 years at current levels would probably put us at 100% of debt-GDP. It's not fantastic, but that level isn't the end of the world either.

Yep. The problem is that the personal debt level is through the roof, our national debt is actually sustainable for a while yet. But when I said this earlier some eejit was all WE HAVE NO MONEY HURF DURF in huge letters. It's not the government that's out of money so much as "us".

The boards.ie politics forum is shameful too, full of people saying how the budget wasn't all that bad at all!!! I just can't stand these people because I get the smell of intellectual dishonesty from them, like they're out to prove something about how mature they are rather than caring what the right answer actually is.

[ProfessorPwn]

Frank ruling hard.

[doppellanger]

The real sneaky one could be to poach financial companies from other districts. Almost every other advanced country is attacking those who provide financial services, both verbally and in the pocket. If Ireland provides a safe haven for these shysters, at least from a personal financial point of view, money and income could flow in relatively rapidly.


Actually Ireland, or rather Dublin's IFSC, has been doing this for the past few years. Light (read no) regulation was a selling point along with low corporate tax. But there is a more pressure on the regulator to clamp down after Anglo and also two German banks, Sachsen Landesbank and DEPFA, which had to be bailed out by the German taxpayer (ahem) after their Irish subsidiaries turned into black holes.

The whole telecoms thing, I can't really see that scaling up in Ireland. Enterprise Ireland and the like have been talking about it for years but I don't think Ireland has the competitive advantage there.

[doppellanger]

Recovery was rapid even after the Great Depression. The nature of the economic catastrophe that started in 1929 varied enormously across countries, both in size and duration. The UK escaped relatively lightly with a 6 per cent fall in output spread over two years. In Japan, Denmark and Norway the recession lasted only a single year. But in Germany, Austria, Canada and the US, the cumulative fall in output was between 25 and 30 per cent, with the recession lasting four years in the latter three countries and three in Germany.

However, once the recovery began – in different calendar years in different countries – the average rate of growth was strong. GDP growth in the first year after the Great Depression averaged 4.7 per cent, followed by 4.6 per cent in the second and third years.

The caveat to all this is that the current circumstances are unusual. But so was the Great Depression. There is some evidence to suggest that, after recession has reached a certain size or duration, recovery is then harder and more sluggish. Keynes’ animal spirits become depressed. But it takes an awful lot to depress them for more than a couple of years. Capitalism seems a pretty resilient beast.

The writer is author of ‘Why Most Things Fail’ and a director of Volterra Consulting

It's interesting. But saying the US recovered at a rate of x% is a bit of a chimera. Some parts of the US probably continued to decline (dustbowl) and other parts (big cities) must have grown even faster.

If you look at the overall European economy, or the EU, or the Eurozone, then the recession probably ended two quarters ago. But Latvia is in a depression, as is Iceland, Ireland is in recession and Greece and Hungary's numbers are no great shakes.

Funny that, the most peripheral countries are the hardest hit.

[How bad boy]

Ireland has a surprisingly strong telecoms sector, certainly with regards to the software. Used to be stronger in the early 00s but there are a huge number of software developer with transferable skills. Wrt the financial sector, I think ireland should focus on attracting the people, not the companies. I'm sure some measures could be thought up to target these people, encouraging them to shift residence to Ireland. Maybe something like making obtaining Irish tax residence easier. Morally dubious though.

[doppellanger]

Ireland has a surprisingly strong telecoms sector, certainly with regards to the software. Used to be stronger in the early 00s but there are a huge number of software developer with transferable skills. Wrt the financial sector, I think ireland should focus on attracting the people, not the companies. I'm sure some measures could be thought up to target these people, encouraging them to shift residence to Ireland. Maybe something like making obtaining Irish tax residence easier. Morally dubious though.

Motorola closed down though, didn't it? UK has Ericsson and Nokia development and probably more military spending on telecoms technology. I don't think Ireland has the people or the education in telecoms to compete. Bandwidth, yeah, but it'll probably remain empty.

Inviting in rich people could possibly be good for the economy but then you risk turning Ireland into another Switzerland, as you say, morally dubious.

[Langer Dan]

Ireland has a surprisingly strong telecoms sector, certainly with regards to the software. Used to be stronger in the early 00s but there are a huge number of software developer with transferable skills. Wrt the financial sector, I think ireland should focus on attracting the people, not the companies. I'm sure some measures could be thought up to target these people, encouraging them to shift residence to Ireland. Maybe something like making obtaining Irish tax residence easier. Morally dubious though.

Yeah but does it transfer towards a solid no.7?

[How bad boy]

Motorola closed down though, didn't it? UK has Ericsson and Nokia development and probably more military spending on telecoms technology. I don't think Ireland has the people or the education in telecoms to compete. Having worked in all three companies you mention, i'm sure the people are these in Ireland. Ericsson have a 4G software development centre in Dublin. Ireland produces huge numbers of engineers and military spending isn't the driver of the industry any more.

[Corcaigh32]

Hmmm was in Motorola as well and would agree with HBB. There are definitely possibilities there with tons of highly experienced engineers out of Ericssons and Motorola.

[simon says]

The government were told by the European Union to reduce the deficit. We have bonds downgraded because the world fears that we are going to go broke and people are talking about continuing with borrowing? Also, this investment in infrastructure, how are the government supposed to pay for this with a deficit the size of Mary Harney's backside?

Also manufacturing and low taxes? Sure how did we entice all these multinationals in the first place? With low tax and a gateway into Europe. If we didn't have low taxes we wouldn't have attracted them in the first place. We are as fucked as Spain with only Greece below us. As for tourism, the country is ridiculously expensive. It's cheaper to have a weekend in London than visit Cork, accommodation is cheaper, food and drink is cheaper. I am not saying I have the answers but there are some glaring holes in some of these arguments

[Haro]

The government were told by the European Union to reduce the deficit

They had every opportunity to contest this but didn't because it was "common sense". "Common sense" isn't how you rule a country, you're meant to have people with sense greater than the average commoner...

[simon says]

So how are they supposed to keep running the country without trying to reduce the deficit ?The reduction of the debt is obviously common sense. . The problem is that past governments haven't used enough common sense in how they ran the economy over the past few years.

[How bad boy]

So how are they supposed to keep running the country without trying to reduce the deficit ?The reduction of the debt is obviously common sense. . The problem is that past governments haven't used enough common sense in how they ran the economy over the past few years. The question is not if the debt should be paid down but when.

[irishmonkey]

So how are they supposed to keep running the country without trying to reduce the deficit ?The reduction of the debt is obviously common sense. . The problem is that past governments haven't used enough common sense in how they ran the economy over the past few years.

its catch 22
when they do have money they wont get re-eleceted if they dont pump money into the hse / roads /social welfair etc.

everyone goes on strike looking for pay increses etc.

[doppellanger]

Ireland has a surprisingly strong telecoms sector, certainly with regards to the software. Used to be stronger in the early 00s but there are a huge number of software developer with transferable skills..

Another one bites the dust:

http://www.businessworld.ie/livenews.htm?a=25377 28

"Educational media company EMPG, formerly Riverdeep and the owners of Houghton Mifflin Harcourt, has confirmed it is in discussions which will result in 'comprehensive' financial restructuring.

Earlier this afternoon, Fine Gael TD, George Lee, said that Houghton Mifflin Harcourt has failed and that a number of Irish equity investors have lost significant sums of money as a result."

The software sector was strong and growing in the early 2000s but it has since withered on the vine.

Reasons:
1. Capital chasing property not tech
2. Dropout rates of 40%+ in tech courses after the dot com crash
3. Lack of government interest

There are some noteable exceptions - Havok in Dublin for example. Qumas employs a lot of people in Cork but they persistently make losses.

Microsoft does their localization in Ireland but not so much development per se. Localization is an area where Ireland is relatively strong but lack of language skills means Irish people are at a disadvantage for a lot of the jobs.

Google, Yahoo, ebay all have European headquarters in Ireland but these are not really developing software, they are more sales and administration.

I actually had the chance of an interview with Riverdeep a few years ago but I just didn't like their software and I guess I wasn't the only one.

[Tommy O]

'At least the government can keep borrowing for the here and now'

And shur thats all that matters ..........

If this doesn't shut the imbeciles up , nothing will.



By DANIEL McCONNELL Chief Reporter


Sunday January 17 2010

Ireland's national debt is set to double to €150bn, new figures obtained by the Sunday Independent reveal.

As a result, in a devastating realisation of the country's woeful financial position, one-fifth of all taxes raised will have to go just to pay off interest on the debt mountain.

Despite strong assurances from Minister for Finance Brian Lenihan on Budget Day that the worst is over, figures from his Department show the exact opposite.

With the collapse in taxes since 2007, from a peak of €47.3bn to just €33bn last year, Ireland's national debt has already spiked to a startling €75bn -- but new figures from the Department of Finance show that by the end of 2014, that figure will be a startling €150bn.

According to the latest dire forecast, €18.75bn will be added to the national debt this year, €18bn in 2011, €14.75bn in 2012, €12.5bn in 2013 and €9.25bn in 2014.

More alarming is that between now and 2014, over €32bn in taxes will be spent merely on serving the interest on the country's borrowings.

It must also be realised that these figures represent the best-possible-case scenario, given the unreliability of Department of Finance forecasting in recent times.

Senior Finance Department figures said last night that the alarming escalation in the country's national debt means that next December's Budget will once again have to look at further reductions in government spending.

The total pay and pensions bill for the public sector for this year is €17.2bn, which is an 8 per cent decrease on last year. However, it is envisaged that another such drop next year would again be required.

Richard Bruton, Fine Gael's deputy leader and finance spokesman, said that the latest figures show that the country is locked in a vicious cycle, adding that the Government has prepared no plan to get us out of it.

Speaking yesterday, Mr Bruton said: "We are borrowing at an unsustainably high rate, and as a result our national debt is racking up at an alarming rate.

"The most worrying aspect of all of this is that there is no plan to break this cycle other than slash and burn."

The Government is now borrowing €30.5m a day to pay the unsustainable wages of public sector workers who are earning up to 50 per cent more an hour than those in the private sector.

The figures obtained by the Sunday Independent reveal that inflated wages and inflexible work practices in the public sector are punishing the Irish economy and causing Ireland's debt levels to spiral out of control.

The public finances deteriorated sharply last year, with Ireland's Exchequer balance worsening by almost €12bn, new figures from the Department of Finance show.

An unprecedented €7.7bn decline in tax revenue -- down 19 per cent on the year before -- and a €4bn payment to Anglo Irish Bank were the main reasons for the €11.9bn year-on-year deterioration in the Exchequer balance.

- DANIEL McCONNELL Chief Reporter

Sunday Independent

[Haro]

"imbeciles" - you still don't seem to understand that you can't cut your way out of a recession.

given the unreliability of Department of Finance forecasting in recent times.

lol

The Government is now borrowing €30.5m a day to pay the unsustainable wages of public sector workers who are earning up to 50 per cent more an hour than those in the private sector.

It's 50% higher now? It wasn't that high before the cuts, someone's a genius mathematician here alright. There's an obvious bias in this article.

If you keep taking money away from the people, the economy won't recover.

[Tommy O]

Yes the article is strongly biased in favour of reality.
The public sector were used to some degree in buying the last few elections , as with all things ff it was the short term gain was all that mattered. The typical public sector wage should at most be on a par with private sector wage or less due to the fact its more permanent than anything available in the private sector. Public sector wages will be taking another good few hits in the coming years. If some penpusher who does nothing all day but scratch his *** and draw an easy wage (aprox 33% of the public sector workforce) is unhappy with his wage packet being hit , he/she can can always join the ranks of the private sector where their hardworking and entrprenurial spirit will fluorish.

As far as that ridiculous point about taking money away from people the economy wont recover .. JC this just shows how out of touch you are , we are way beyond that my friend we are now flat out in just keeping any sort of economy going, a recovering one is years and years away.

[poulgorm]

Government spending in 2008 was €48 billion.
In 2009, it was €56 billion i.e. an increase of €8 billion - 17%.

How did that happen ? OK, social welfare accounts for some of it - but not all.

Anybody know ?

[Tommy O]

Bailing out the galway tent brigade perhaps ?
Shock horror they run with the hare and hunt with hounds !!!!!

[poulgorm]

Mea culpa. Forgot the banks, etc.

And more of that to come in 2010.

Shite

[Haro]

Government spending in 2008 was €48 billion.
In 2009, it was €56 billion i.e. an increase of €8 billion - 17%.

How did that happen ? OK, social welfare accounts for some of it - but not all.

Anybody know ?

Banks probably. Though if it was a once off expense that means 2010 should have lower spending than people are taking into account here.

[simon says]

If you keep taking money away from the people, the economy won't recover.[/QUOTE]


Have you seen the amount of debt the government has? How is the governemnt supposed to bridge the deficit so when it' social spending is going up all the time?