In the default doomsday scenario, who suffers most? PS?

Rebel_Yell

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It's looking increasingly likely that we will default and will face a requirement to avail of a bailout from either the EU stability fund or the IMF.

We can I think assume that in any restructuring the corporation tax rate will probably survive (if only because you can't take away supports from a critically ill patient).

However, we are going to face a slash and burn from the EU that won't be pretty.

It won't be pleasant for anyone. We are going to see the welfare state slashed. Increases in personal and consumption taxation. However, the PS are the ones that will see the biggest pain. Compulsory redundancies, pay cuts, reduction in pension entitlements.

Comparisons with other EU countries will be used to determine the extent of these. By that measure, our Social Welfare and Pension rates will be hammered.

The pay of Doctors, particularly consultant doctors is eye wateringly high by comparison with our German neighbours (and new patrons). But others in the PS will also see serious cuts.

This isn't a pleasant thought.

Does the government have a doomsday plan for PS cost reductions. Looking at the ways in which we could, in this scenario, reduce the PS without destroying the nations services.

Government cannot front up to that scenario at the moment but would it not be better to have a plan in reserve for when the day comes.

If that day does come, what the hell could we do. I for one would eliminate half of the local government apparatus as a first step.

Consumption taxes should be increased before cutting pay and staffing.

Oversight agencies should be cut before anything else is examined.

All non-critical legislation that results in cost should be abandoned. For example, the Offical Language Act. The FOI act might have to be curtailed or fees increased significantly.

Reintroduce college fees but means test it.

Administration should be cut before frontline services.

Education ratios should be protected before pay. So cuts pay rates before teacher numbers.

That principle applies to all front line roles. It would be preferrable for the nation if pay was cut rather than staffing numbers.

These are just a couple of random thoughts.

But what would a doomsday plan look like? Has anyone examined the measures enforced in other countries where default was required?
 


Kevin Doyle

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It would also be nice to have the cost of living slashed to normal EU levels, where that to happen paycuts of circa 30% across the board would not have anywhere near the catastrophic impact on standards of living. Cost of living here is something the EU will look at when framing austerity measures, The EU is largley run by social democrats who understand the concept of real fairness and equity, not right wing boot boys, i'd be interested in their proposals from that perspective.

I'd contend that the wealthy have more to fear from EU intervention that the PS.
 

Watcher2

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I dont think any one section will suffer most. It will be pain all round.
 

Rebel_Yell

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It would also be nice to have the cost of living slashed to normal EU levels, where that to happen paycuts of circa 30% across the board would not have anywhere near the catastrophic impact on standards of living. Cost of living here is something the EU will look at when framing austerity measures, The EU is largley run by social democrats who understand the concept of real fairness and equity, not right wing boot boys, i'd be interested in their proposals from that perspective.

I'd contend that the wealthy have more to fear from EU intervention that the PS.
It's an interesting question. Who the hell would be responsible for drawing up the plan? The IMF are primarily accountant types who simply look at the big ticket items and cut from there. As you say, the EU may be a more benign force. The cost of living is in a chicken and egg situation. You can't cut costs without cutting pay, it's unjust to cut pay without cutting costs.

There is also a question as to what the inflationary impact the pay in the PS and multinationals have in the overall economy and whether this inturn has lead to a higher cost of living for everyone.

I don't think cost of living will be a consideration when they come to cutting though. It will be an accountancy exercise. Where the axe falls may be impacted by social philosophy and they will probably look at higher earners before lower earners but not the cost of living.
 

Rebel_Yell

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It's all my 6yo daughter's fault.
Take away her special needs assistant.
Maybe we might see less of that kinda of heartless behaviour from an organisation that isn't dependant on any sector for electoral support. Your 6 year old doesn't vote.
 

HarshBuzz

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depositors
 

bormotello

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I dont think any one section will suffer most. It will be pain all round.
+1
Private sector will be hit even harder, especially retail
I seen how doomsday looks in 1998, when I landed in Moscow 40 minutes after default. Empty ATM, huge queues to banks, closed exchange offices etc
But I don't think it will be applicable to country with single currency
 

seabhcan

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I think people will be disappointed if they expect the EU or IMF to come in and micromanage our budget.

The IMF typically offers a number of options to a 'client' government - but it is always the government that does the cutting and takes the detailed decisions.

Even post-IMF the government will be incharge for 95% of the decisions of how and who to cut, and I don't expect much change in their behaviour.
 

bormotello

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It would also be nice to have the cost of living slashed to normal EU levels, where that to happen paycuts of circa 30% across the board would not have anywhere near the catastrophic impact on standards of living.
You know that cost of living mostly dictated by overpriced property
I think that in short term cost of living will increase dramatically, because retailers will try to compensate decreased revenue by increasing prices
 

firefly123

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Before this thread starts turning in to another Private vs Public slag fest can we try and stick on topic.

Everyone will suffer. Thats going to happen whether the IMF/EU or some other proxy gives the government a kick up the hole and gets them to make non political decisions. The mess has been made and now we need a clean up.
I believe paycuts across the Public sector are inevitable. These should be from the very top down. NO exemptions for senior staff (seriously what were they thinking). They should take into account any general tax increase so that PS workers are not hit on the double (yes despite the way some people think we do pay tax)

I am hoping that the paycuts already occuring in the private sector will help restore some competitiveness and bring employment.

All workers, no matter what they are earning, will pay tax. Even if it is only a small percentage everyone working should be contributing. It breeds a sense of interest when its your own money involved.

All unemployed will see a reduction in social welfare. I believe the very long term unemployed need to be dealt with in some way. I am not talking about the 300,000 people who lost job in the past 3 years but the 100,000 professional unemployed. By dealt with I mean they need to explain why and be made train up, if they dont bother they lose entitlement.

All social welfare allowances will either be cut across the board or means tested. Judging by our government it will be across the board

Anyone earning over 100K will be in a new tax bracket on all earnings over 100k if that causes them to leave the country then fair enough, they are not the type of citizens we want regardless of how much wealth they create.

Anyone in the PS on over 150k will REALLY need to justify that wage and I dont think many of them can so 150k should be the limit.

Retirement will go up to 70. Old age pension will be reduced.

If all these occur BUT are accompanied by a general fall in the cost of living then we will manage. If business in ireland try to cream profits then we all go down the swanny together.
Its not going to be another great famine just a readjustment to reality and away from the Sunday Independent Celtic Tiger ************************************************ that only a few people could afford but that many tried to live.
 

bormotello

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If all these occur BUT are accompanied by a general fall in the cost of living then we will manage.
It will be accompanied by mass default on mortgages and death of banks...
 

firefly123

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It will be accompanied by mass default on mortgages and death of banks...
Well then that is what happens. We cant afford to give anymore of our money to the banks. If the reset button needs to be pressed then go ahead. We start bartering in bottlecaps and sheep until Bank Santander or deutchsbank come in and open branches.
 

gijoe

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Public Servants, retired public servants, and Social Welfare recipients will be the losers in a bailout. They can all expect a cut of 20%+.
 

Adonis

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Public Servants, retired public servants, and Social Welfare recipients will be the losers in a bailout. They can all expect a cut of 20%+.
Dont forget hospitals, local schools, local health services, infrastructure etc will all lose out. People seem to be of the opinion that if an external monetary institution is called in then they'll just ride the public sector to get the countrys finances to stabalize, dont fool yourself, we're all in for a ride one way or another.
 

Tea Party Patriot

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Before this thread starts turning in to another Private vs Public slag fest can we try and stick on topic.
The IMF is usually only necessary where a country is in serious trouble because of a bloated public sector. Government spending is on public projects, wages etc. Even in the case of 3rd world countries that go broke this public sector would often be their military.

They won't and I repeat won't hit the private sector because they will see that as productive. If the trade unions don't play ball, the IMF will give them a red card.
 

bormotello

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They won't and I repeat won't hit the private sector because they will see that as productive. If the trade unions don't play ball, the IMF will give them a red card.
Even as right winger I don't agree with you
a) IMF will remove minimum wage regulations in order to restore competitiveness
b) even if IMF will not target private sector specifically, it doesn't mean that government will not play populist card and force private sector to pay for their populists mess
 


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