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Deficit (2008-2013) contributes €94.5bn (49.2%) of National Debt: Bank Bailout 31.4%

Eric Cartman

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I was against the bank bailout. Still am.

But, I was surprised by this:
Finfacts Ireland Blog: Business & Finance: Irish National Debt: Public spending was 57.3% of GNP in 2009; Deficits in 2008-2013 will amount to

Irish National Debt: Public spending was 57.3% of GNP in 2009; Deficits in 2008-2013 will amount to €95bn

University College Cork (UCC) economist, Seamus Coffey, estimated last December that with GDP (gross domestic product) measured at €159.6bn in 2009, total government expenditure equates to 47.1% of GDP. The equivalent GNP figures (gross national product: excluding for example the profits of multinationals operating in Ireland) are €131.2bn and a staggering 57.3%. He asked: is there a higher figure in any country? Blog post

Seamus Coffey said this week that the National Debt will be €192.8bn by the end of 2013. This is 113.5% of the IMF’s nominal GDP forecast for 2013. Here is a breakdown of the debt and the proportion attributed to each category.

  • Pre-crisis (2007) National Debt - €37.6bn, 19.5%
  • 2008-2013 deficit-related Debt - €94.9bn, 49.2%
  • Banking-related Debt - €60.5bn, 31.4%


The economist said at the end-of 2013 we will have a huge debt. One-fifth will be what we brought with us into the crisis. Less than a third will be due to the bank bailout. About half of our debt will be due to our own deficits. By 2013 the bank recapitalisations will be over, and we may even see some small return on the money poured into AIB and BOI, with the toxic property loans NAMA process also well advanced. However, our Exchequer deficits will remain and will continue to require further borrowings. With the annual deficit still estimated to be 7.5% of GDP in 2013, the 113.5% Debt/GDP ratio at that stage will continue to increase. Blog Post
How do critics of the EU/IMF Troika bank bailout feel about the fact that the money borrowed by the Troika was mainly used to plug our dreadful budget deficit primarily, provided we pay the banks' creditors secondarily?

If the F.F./P.D./Green Government had had the courage to slash spending in 2010, when borrowing on the open market wasn't a possibility, we could've repudiated the bank debt (I'm sure we could have figured some legal dodge: the whole bank guarantee was built on some dubious promises by Seán Fitzpatrick that Anglo-Irish's debt were in some way manageable: ditto the so-called "pillar banks").

That deficit has resulted into almost €95bn debts, which considerably exceeds the bank bailout debt. That's extraordinary. That's Fianna Fáil's economic populism: public sector pay bench-marking and pensions, excessive welfare and State pension rises and general inefficient waste.

What would the Labour Party, Sinn Féin or the fringe socialists have done differently? Their answer, I'm sure, would've been €20bn new taxes annually.

I'm angry with this new deal: the Anglo debt is now truly sovereign debt. Public sector pay reform is piece meal and there will be no great reform of welfare. The lazy spivs have won.

For now, perhaps...
 


RobertW

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Public sector pay accounts for approximately 40% of revenue raised by the state . . .excluding any borrowing.
 

Telemachus

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Public sector pay accounts for approximately 40% of revenue raised by the state . . .excluding any borrowing.
Not this again..
 

Eric Cartman

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Public sector pay accounts for approximately 40% of revenue raised by the state . . .excluding any borrowing.
Do you have any links for this? Is this complete and utter bull************************?
 

RobertW

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Do you have any links for this? Is this complete and utter bull************************?
I love the way the facts contradict the views of the p.ie loonarati.

The state pays its workers approximately 14.4 bn per year. . . And takes in approximately 36 bn in revenue (excluding any borrowing)
 

cabledude

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The state pays its workers approximately 14.4 bn per year. . . And takes in approximately 36 bn in revenue (excluding any borrowing)
And it's too high. Public sector not 'bloated' but it is relatively well-paid - The Irish Times - Fri, Sep 14, 2012

Last year, the slice of the national pie going to public employees – as measured by gross domestic product – was 11 per cent in the EU (10.6 per cent in the euro area). In Ireland, it was 12 per cent.

As measured by gross national product, often considered a better indicator for this economy, the share stood at 15 per cent. By that measure, it was the third-highest among the 27 member countries.
There are other calls on our exchequer taking's Robert. HSE, Social Welfare etc etc
 

Telemachus

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I love the way the facts contradict the views of the p.ie loonarati.

The state pays its workers approximately 14.4 bn per year. . . And takes in approximately 36 bn in revenue (excluding any borrowing)
Lets double their pay so. :lol:
 

hammer

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It will all be ok when we balance the books in 2116.

Dont be worrying about the same thread re-jigged for the 50th time.

THE ANNUAL DEFICIT IS THE PROBLEM.
 

Telemachus

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I'm waiting for some "economist", populist or official to come out with a study showing that the demographic situation in europe and the unfunded pension liabilities and the rest of the debt are going to wipe out this stupid EU project.

I'm sick of these guys looking at the short-term picture. They cant see the wood for the trees in a major way.
 

Analyzer

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There are some very serious and resounding voices in this country, who are committed to continual borrowing to support their excessive welfare entitlements.

I am talking about the likes of Suds, Donkeylaffs, the ex-politician directors of the banks, auditting firms, lawyers, etc....
 

Fr.Ted Crilly

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Public sector pay accounts for approximately 40% of revenue raised by the state . . .excluding any borrowing.
36% according to Howlin on 'the week in politics' last night.
 

Fr.Ted Crilly

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The welfare budget and PS pay & pensions should cut by 20% across the board with immediate effect.
 

henryhill

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Eric Cartman said:
How do critics of the EU/IMF Troika bank bailout feel about the fact that the money borrowed by the Troika was mainly used to plug our dreadful budget deficit primarily, provided we pay the banks' creditors secondarily?
I feel that the extra debt built up by the budget deficit would have been sustainable. With the banking debt it is not.

And no, the slash-and-burn approach would not have allowed any more leeway. That would have precipitated an economic collapse. There is a multiplier effect on the general economy for every cut made.
 

Eric Cartman

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I love the way the facts contradict the views of the p.ie loonarati.

The state pays its workers approximately 14.4 bn per year. . . And takes in approximately 36 bn in revenue (excluding any borrowing)
Hmmm...and if we slash that €14.4bn pay bill to, say €10bn then could save €4.4bn annually?
If we cut pension entitlements and raise the eligibility, we could save further billions annually?
If we instituted efficiencies, then we could lower the number of employees, and hence the pay bill further?
If we cut welfare, we could further cut the deficit into the future?

I like these ideas...
 

Eric Cartman

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I feel that the extra debt built up by the budget deficit would have been sustainable. With the banking debt it is not.

And no, the slash-and-burn approach would not have allowed any more leeway. That would have precipitated an economic collapse. There is a multiplier effect on the general economy for every cut made.
Here you go:

Slashing public spending

Estonia shows that a drastic reduction in public spending can return economies to strong and stable growth, the Centre for Policy Studies claimed today.

The UK-based pro-market think-tank has issued a case study on the austerity programme adopted by the Baltic country in 2008. It includes comments from Jürgen Ligi, the Estonian finance minister who oversaw the programme.

Ligi cut government spending by 10% between 2008 and 2010. In the short-term output weakened and unemployment rose to 20%. However, since then, unemployment has fallen back to just over 10% and growth recovered to 3.3% in 2010 and 8.3% in 2011. The government also met its target for the deficit not to exceed 3% of gross domestic product.

‘We had a period of illusory growth, based largely on spiralling private sector debt,’ Ligi writes in the report’s foreword. ‘This was unsustainable… In order to keep our economic foundations intact, the only viable way was a swift reduction in government spending.

‘The recession initially came at a high price. But in hindsight this was a necessity to put us back on the path of long-term, sustainable economic growth.’

He added that Estonia continued to have a balanced budget and low debt – ‘increasingly rare qualities in the world we live in today’.

Estonia has been at the centre of an online row, after the American economist Paul Krugman argued that the country’s recovery had been somewhat overstated, a stance that drew angry rebuttals from Estonian president Toomas Hendrik Ilves. The CPS’s paper also takes issue with Krugman’s criticisms.
 

brine

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30 years ago they would have just devalued the Punt. This is what happens when a banana republic tries to join the Deutschmark.
 

brine

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How do critics of the EU/IMF Troika bank bailout feel about the fact that the money borrowed by the Troika was mainly used to plug our dreadful budget deficit primarily, provided we pay the banks' creditors secondarily?
Come back and open a new thread in 2040 displaying these stats:

Government debt 2008-2040
Bank related debt 2008-2040
 

ticketyboo

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Hmmm...and if we slash that €14.4bn pay bill to, say €10bn then could save €4.4bn annually?
If we cut pension entitlements and raise the eligibility, we could save further billions annually?
If we instituted efficiencies, then we could lower the number of employees, and hence the pay bill further?
If we cut welfare, we could further cut the deficit into the future?

I like these ideas...
Ok, Eric, I AM a greenhorn were economics are concerned, but it seems to me that you're just plucking numbers out of thin air with no rationale behind it.
First, how do you, out of thin air, cut a paybill from 14.4 to 10.0. Remember, these are your firefighters, doctors, nurses, TEACHERS! The PS doesn't consist of tens of thousands of bloated office workers who are employing ten where two would do.
Even if that figure was achievable, what would be the effect...people who are just making their mortgage payments would fail to do, others who have a few bob left over would find that they couldn't afford to send Sorcha to dancing classes, Oisin to guitar lessons, the other lad driven up and down the roads to take part in his local GAA club. people who go out for a night to the pub or for a meal would cease to do so, all impacting on the taxis, the restauraunteurs, the publicans....do you see where I'm going with this...
But then, I'm just an economic illliterate, I suppose?
 

Eric Cartman

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Ok, Eric, I AM a greenhorn were economics are concerned, but it seems to me that you're just plucking numbers out of thin air with no rationale behind it.
First, how do you, out of thin air, cut a paybill from 14.4 to 10.0. Remember, these are your firefighters, doctors, nurses, TEACHERS! The PS doesn't consist of tens of thousands of bloated office workers who are employing ten where two would do.
Even if that figure was achievable, what would be the effect...people who are just making their mortgage payments would fail to do, others who have a few bob left over would find that they couldn't afford to send Sorcha to dancing classes, Oisin to guitar lessons, the other lad driven up and down the roads to take part in his local GAA club. people who go out for a night to the pub or for a meal would cease to do so, all impacting on the taxis, the restauraunteurs, the publicans....do you see where I'm going with this...
But then, I'm just an economic illliterate, I suppose?
Possibly.

You have to cut your cloth to measure. The Government can't afford the Fianna Fáil legacy of public sector pay bench-marking. It just can't. Nothing to do with "fairness" (though who kept F.F. in power? Never mind)

So you cut pay and pensions. That's what happening in the private sector, why should the public sector be treated differently? If private sector workers have their wages cut, and make the adjustments you outline above, why do you think public sector workers should be exempted? It's a matter of equity.

Why are necessities expensive? Because almost 20 years of continual pay rises in both public and private sectors (more-so the former) has resulted in constant, albeit low rate inflation. When you go into a restaurant to buy a steak, consider that workers that slaughtered the animal, road hauliers that distributed the meat and kitchen staff that prepared the meal have each received a 1-2% pay rise annually most years for the last 20 years. That means inevitable rises in the costs of good and services.

When there are swinging cuts, costs come down. It's deflation. See house prices? Great isn't it? Now the price of everything should fall in a recession. When there is less money in the economy, the private sector acclimatizes and cuts costs.

Why have grocery costs climbed up marginally of late? Because the cuts have been relatively light in comparison to other countries like Estonia. That's the truth. Plus, consumer activism is weak here too.

These enormous expenses have resulted in €94.5bn (almost half) our deficit. We can't afford them. If they wont voluntarily take a cut, then there is a real risk in the next few years that there could be mass privatizations. Sell everything.
 


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