Can people who disagree with bailout put forward valid benefits of opposing it?

Squire Allworthy

Well-known member
Joined
May 31, 2007
Messages
1,404
A default is inevitable given the insane deal that the Irish government wants to accept. If implemented, this will do several things:

1. The Europeans will immediately strip the country of everything of value. They intend the take the penision fund - the nation's entire savings - immediately. The deal will also allow them to take immediate possession of everything that the banks' have of value, leaving the Irish people to pay in full for all the bad loans.

2. The economic base of the country will be destroyed with the heavy tax burden that will be necessary to pay this killer debt. As the economy shrinks and collapses, the debt payments will become even more difficult and impossible. Think of the Germans trying to repay the reparations after WWI. Think of your ancestors trying to pay rack rents. This will be you.

3, When the default comes after all that, which will surely happen, there will be nothing left to rebuild the economy with. Everything of value will be owned by foreign interests. Ireland will have become a third world country.


This must not be allowed to happen. A default now while Ireland still has its assets and still has some financial reserves will mean only a short term economic disruption - lasting weeks or months - and then it will be back on the road to recovery. This time next year, the country would be back to normal.

1. To do this, though, the Irish government needs all of its assets. It needs to keep that pension fund to maintain essential services.

2. The failed banks need to close and new ones need to be chartered. Follow the Iceland example. Keeping the failed banks going has been throwing money down a rat hole. The bond holders need to take their hit like normal bond holders are supposed to do. The shareholders need to take their hit like normal shareholders. Under no circumstances should the Irish people have to pay the debts of irresponsible bond holders and shareholders.

3, However, considering the tax money that the banks have already sucked up, the Irish govenrment needs to put tax liens on all the foreclosed properties from the defaulted loans. Those tax liens should approximate how much money that banks have cost Irish tax payers thus far. These assets need to remain in the hands of the Irish people.

4. Let the bond holders and shareholders try to recover their money through lawsuits against the bank management. They can recover from the professional liability insurance policies. If those civil lawsuits expose wrongdoing on the part of members of the Irish govenrment, prosecute to the fullest extent of the law. Think racketeering and fraud charges. Think asset recovery from the wrongdoers. This money too should go to reimburse Irish taxpayers for their costs thus far.

5. Ireland will need to get off the euro and restore its own currency after a default, since Ireland will need to be able to set its own fiscal policy after this without being told what it "must" do by European markets looking out solely for themselves and their own interests. The punt needs to be brought back. In the meantime, though, while the currency conversion takes place, the government needs to freeze prices.

6. Ordinary citizens need to get their money out of banks and into something tangible, as the currency - both euros and the punt - will be unstable for a while. You do not want to be holding currency that loses most or all of its value.

7. The Irish government will have to live off its own tax revenues. It will have to have a balanced budget. No more borrowing from foreign banks, which is a good thing. No more debt is exactly the right course for the government.

8. A default means that the prior debt will not be paid. This enables the Irish government to quit servicing the old debt, and the new monstrous debt represented by this deal will not occur.

9. Not having to service the old debt will effectively put more money unto the hands of the Irish government. If you take debt service away from the budget, it becomes a lot less austere.

10. A default will give Ireland a fresh start instead of a one-way ticket to financial destruction and long term poverty and servitude to foreign masters. It will represent a return to core financial values. Everyone will have to live within their means. The days of easy credit will be over. However, quite frankly, they are already over.

The main thing to remember is that a default often leaves countries stronger financially than they would have been otherwise. Argentina was booming again one year later after its default. Iceland is recovering quite well, even though it is an even smaller country than Ireland.

Default will provide short term pain followed by long term gain.
This deal will provide short term pain followed by long term destruction of the country.

Good post.

Good summation of options on default.

Ireland has to default NOW,
 


thegreyfox

Active member
Joined
Oct 26, 2010
Messages
149
I cant see a solution as we just play into a system one way or the other.Politicians dont control countries,banks do.Bond holders are just speculators themselves.Anti globalisation eventually ?
 

wombat

Well-known member
Joined
Jun 16, 2007
Messages
33,111
Ireland has to default NOW,
We don't need to default, the govt. had enough borrowed to keep it going till June which gives enough breathing space to allow the financial markets to get over the shock of having to deal with the banks. They are capitalists, once they see the bailout is finished, they will strike the best deal they can get and move on, once they see the chance of making a profit, they will start to lend again. The EU's problem is that they have too many socialists in high positions.
 
Joined
Nov 18, 2010
Messages
50
The problem is of course that the economic incompetents who got the country into such a mess in the first place are now selling this plan as the only possible show in town. Why would anyone with a titter of wit take any heed of the 'vote Lisbon for jobs' merchants or the people who sold a property pyramid scheme as a vaild economic proposal?
Here here
 

Expatriot

Well-known member
Joined
Dec 7, 2009
Messages
4,325
i give up
 

wombat

Well-known member
Joined
Jun 16, 2007
Messages
33,111
1 - We need funding for our banks or they go bust which now causes us massive problems as a country

2 - We need to borrow close to 20bn next year and over the next 3 years we will need to borrow about 50bn just to pay our day to day running costs.....At the moment that borrowing is costing us 9%.
The banks are broken which is why we have a problem with borrowing - the moneylenders do not believe that the Irish state can fund them.
Our problem is that our ruling group are trying to fix a problem in capitalism with a socialist solution. Let capitalism work, let the banks deal with the moneylenders.
 

sidney waddell

Well-known member
Joined
Nov 12, 2010
Messages
1,763
Declan Ganley: A tale of 2 Irishmen..........Bob Geldof did Band Aid, Brian Cowen did "BOND AID".

I suppose that sums it up really........
Hmmmm...that gives me an idea...


Bond Aid!

It's Christmas time, and now it’s time to be afraid
At Christmas time, we get the IMF and we feel the pain

Farewell our world of plenty, we can spread some poverty
Give your money to the banks at Christmas time

But say a prayer – pray for the bondholders
At Christmas time, it's hard, but when Europe points a gun

You get your world view from the Sindo
And it's a world of debt and fear
Where the only money flowing evaporates and disappears
And the stock market bells that ring there are the clanging chimes of doom

Well tonight thank God it's us instead of you

And there won't be hope in Ireland this Christmas time
The greatest gift we'll get this year is lies

Where the economy never grows
No cash, no money flows

We don’t know it's Christmas time at all

Here's to Europe
Raise your glass to Germany
Here's to Anglo
and to poor, broke AIB

We don’t know it's Christmas time at all

Feed the banks
Let them know it’s Christmas Time


Repeat and fade away - like Ireland's sovereignty
 

Capt Blah

Well-known member
Joined
Sep 15, 2009
Messages
1,242
Website
www.mehearty.blogspot.com
Considering 60% of the bailout money is to be used to pay for Public Sector wages, social welfare payments, healthcare payments etc it is hardly all being used for the banks etc.....

When will you realise that there are 2 ISSUES involved and the major one at the moment is our CBD of 50bn over the next 3 years that we have to borrow for.....
No - the only issue here is the bail-out of failed banks. Any money given to the banks disappears into a black hole, never to see the light of day again.

All the rest is just business as usual. Wages, social-welfare payments, etc., are the normal costs of running a country. They circulate within the economy, having been paid. And, between PAYE, VAT and DIRT, the government recoups a substantial amount of all monies paid.

Deficits are part and parcel of the economic landscape, as is government borrowing.

The issue here is the stupid and disastrous decision to back failed banks. It is an economic issue, and (as Expatriot has already stated) a moral issue. Equally, it is an issue of competence. Our country is being led by immoral, corrupt morons.

It is sometimes said the people get the governments they deserve.

What, in the name of God, did we ever do to deserve these buffoons?
 

Expatriot

Well-known member
Joined
Dec 7, 2009
Messages
4,325
Hmmmm...that gives me an idea...


Bond Aid!

It's Christmas time, and now it’s time to be afraid
At Christmas time, we get the IMF and we feel the pain

Farewell our world of plenty, we can spread some poverty
Give your money to the banks at Christmas time

But say a prayer – pray for the bondholders
At Christmas time, it's hard, but when Europe points a gun

You get your world view from the Sindo
And it's a world of debt and fear
Where the only money flowing evaporates and disappears
And the stock market bells that ring there are the clanging chimes of doom

Well tonight thank God it's us instead of you

And there won't be hope in Ireland this Christmas time
The greatest gift we'll get this year is lies

Where the economy never grows
No cash, no money flows

We don’t know it's Christmas time at all

Here's to Europe
Raise your glass to Germany
Here's to Anglo
and to poor, broke AIB

We don’t know it's Christmas time at all

Feed the banks
Let them know it’s Christmas Time


Repeat and fade away - like Ireland's sovereignty
could be one for xmas.
 

TODevastated

Well-known member
Joined
Oct 9, 2009
Messages
1,332
To answer that first question you need to first establish what people really want. A fairer society? A more equal distribution of wealth? A decent health service for all? Sorry but I don´t believe this is the true cause of all the anger - the sad reality is that what would make us all happy again is a restoration of property values, a maintenance of low interest rates, easily accessible credit etc - in a word the good old Celtic Tiger. I have, for example, heard lots of calls for debt forgiveness - from people up to their necks in negative equity who now realise the idiocy of their actions in the property market - but has anybody suggested any meaningful protest like a mortgage payment botcott when the banks bung up their rates? No, the country that gave us the very word "boycott" has become preoccupied with middle-class aspirations.
+1

we need to debate what type of society we want is it a high tax/high service society or a low tax tax/look after yourself society

this is the basic issue which our politicans have never addressed as they think/promise they can provide us with a low tax/high service society

which can't be done!!
 

Right is right

Active member
Joined
Oct 4, 2008
Messages
262
No - the only issue here is the bail-out of failed banks. Any money given to the banks disappears into a black hole, never to see the light of day again.

All the rest is just business as usual. Wages, social-welfare payments, etc., are the normal costs of running a country. They circulate within the economy, having been paid. And, between PAYE, VAT and DIRT, the government recoups a substantial amount of all monies paid.

Deficits are part and parcel of the economic landscape, as is government borrowing.

The issue here is the stupid and disastrous decision to back failed banks. It is an economic issue, and (as Expatriot has already stated) a moral issue. Equally, it is an issue of competence. Our country is being led by immoral, corrupt morons.

It is sometimes said the people get the governments they deserve.

What, in the name of God, did we ever do to deserve these buffoons?
Deficits for Capital Spending is good, large deficits for current spending is bad and always has been bad (main problem in the 80's)

Well it is simple - the Irish people voted in the Govt time and time again that promised them endless handouts, money being given away etc etc
 

Phoenix_Rising

Active member
Joined
Jul 18, 2010
Messages
279
It is a bad deal but the problem is that we have 2 serious issues we are facing and doing the short-term thing will get us into worse trouble....it is like FF in Sept 08 rushing through the guarantees...

1 - We need funding for our banks or they go bust which now causes us massive problems as a country

2 - We need to borrow close to 20bn next year and over the next 3 years we will need to borrow about 50bn just to pay our day to day running costs.....At the moment that borrowing is costing us 9%.

If we default on all our debts there will be 2 things that will happen -

a - no-one will lend us anything and we will have to reduce our expenditure by 20bn this year which will destroy us or

b - anyone who lends us will be looking to earn 15-20% interest which will turn out to be more expensive....

If we run FF out before they put through this budget we let them off bringing through the most damaging budget in Irish electoral history as well as costing the country a fortune in interest.....Once the budget is done and the new Govt get full and detailed access to all the relevent information they can then proceed to change the agreements etc....while not putting through the damaging budget themselves without any chance of borrowing funds...
I'll try to keep it short and simple so here goes...

The country has enough funds to finance itself until mid 2011 so we do not need an IMF bailout right now.

The problem is the banking system eating into that finance so we need to burn the bondholders. Get them around a table and renegotiate the bonds. Offer them an equity for debt option and completely sever the Sovereign debt from the banking debt.

The only argument that has been put forward against doing the above is the markets not lending to us again. I do not believe that. We would have a 6 month window to turn the economy around and instill confidence in the market again so bonds would become available again at a manageable interest rate.

A vital element to instilling this confidence IMO are

1. Separating the Sovereign debt from the banking debt.
2. Getting the country back to work.

In order to get the country back to work we need to start using the NPRF to stimulate the economy rather than bailing out a banking system which is dead anyway in its current state.

In 6 months time when we do need to go back to the markets then they will see an economy that is progressive, has an increasing tax revenue stream, is getting its banking system under control and an attractive option again.

Let us not forget either that there are always people out there who will be willing to take the risk and lend to us, the Chinese market remains untapped at the moment.

The country could still get to a 3% rate but over a longer period of time, forget 4 years or even 5 years. To reduce to 3%, allow the economy to grow unhindered and restore confidence in the markets I think a 6 or 7 year readjustment is more likely to succeed.

Now I am no economist but to me, a simple citizen, it makes sense. Less pain in the short term, less risk to future growth and more money as we will not be saddled with a debt which is not payable.
 

king5494

Well-known member
Joined
Mar 3, 2010
Messages
532
I'll try to keep it short and simple so here goes...

The country has enough funds to finance itself until mid 2011 so we do not need an IMF bailout right now.

The problem is the banking system eating into that finance so we need to burn the bondholders. Get them around a table and renegotiate the bonds. Offer them an equity for debt option and completely sever the Sovereign debt from the banking debt.

The only argument that has been put forward against doing the above is the markets not lending to us again. I do not believe that. We would have a 6 month window to turn the economy around and instill confidence in the market again so bonds would become available again at a manageable interest rate.

A vital element to instilling this confidence IMO are

1. Separating the Sovereign debt from the banking debt.
2. Getting the country back to work.

In order to get the country back to work we need to start using the NPRF to stimulate the economy rather than bailing out a banking system which is dead anyway in its current state.

In 6 months time when we do need to go back to the markets then they will see an economy that is progressive, has an increasing tax revenue stream, is getting its banking system under control and an attractive option again.

Let us not forget either that there are always people out there who will be willing to take the risk and lend to us, the Chinese market remains untapped at the moment.

The country could still get to a 3% rate but over a longer period of time, forget 4 years or even 5 years. To reduce to 3%, allow the economy to grow unhindered and restore confidence in the markets I think a 6 or 7 year readjustment is more likely to succeed.

Now I am no economist but to me, a simple citizen, it makes sense. Less pain in the short term, less risk to future growth and more money as we will not be saddled with a debt which is not payable.
well put ,but I think that some people will just keep believing that FF,FG,Lab wouldn't sell us down the river so everyone but them must be wrong.
 

Capt Blah

Well-known member
Joined
Sep 15, 2009
Messages
1,242
Website
www.mehearty.blogspot.com
Deficits for Capital Spending is good, large deficits for current spending is bad and always has been bad (main problem in the 80's)
Obviously - but this is still normal stuff. It may be bad practice to borrow to pay the ESB bill but most people have had to do it from time to time. Governments borrow for current expenditure all the time.

Well it is simple - the Irish people voted in the Govt time and time again that promised them endless handouts, money being given away etc etc
I agree - ultimately the electorate got what they voted for. The real story here is the sorry state of politics in Ireland - we have had no effective opposition for a long time now.

However, the voters had no reason to believe that the Financial Services Regulator, the governor of the Central Bank and the minister for finance were out to lunch for most of the last 15 years. We may have voted for these buffoons but at least we thought they might stop short of actually bankrupting the nation in the course of their incumbency.
 

Bagbuss

Member
Joined
Nov 30, 2010
Messages
5
You will need to post the editorial, as it is not availble online without a subscription.
I cant get it now either. :( didnt post quotes as it had copyright notice

Gist was its a suicide misssion to try and save the banks. Stark choice save the bank debt or save sovereign debt. Googled "dublin's suicidal promise" and no ones copied it yet.

They say Ireland needs emergency law (like Germany is doing) to force haircut on bondholders.
 

Insole

Well-known member
Joined
Nov 3, 2010
Messages
516
A bailout in itself would not be a bad idea. However, when it is being used to repay bondholders who made a bad gamble and charged at such high rates it is unacceptable.

What Ireland needs is international aid.

By opposing the bailout in its current form we can save our sovereignty and get a better deal. If saving the Euro is that important to the Germans, they'll understand that.

Oppose the budget, bring in a new government and renegotiate the bailout/sellout.
 

Expatriot

Well-known member
Joined
Dec 7, 2009
Messages
4,325
+1

we need to debate what type of society we want is it a high tax/high service society or a low tax tax/look after yourself society

this is the basic issue which our politicans have never addressed as they think/promise they can provide us with a low tax/high service society

which can't be done!!
What worries me is that we have got used to a low level of public services of mixed quality and are happy to cut serevely from that level to retain relatively low taxes etc.

So we could quite easiely end up with a third option.

High Tax/Low Service Society. I could bare either of the other two options in certain circumstances. This nightmare option I doubt I could.

If we are to pay for most services we must at least make sure they are cheap. They are far from cheap now and the quality of private ones are also poor.
 


New Threads

Popular Threads

Most Replies

Top