No opportunity missed to make things worse: Eichengreen on the 'bailout'

anewbeginning

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I agree OP.

My guess is by 2015 or thereabouts, we will be left with a national debt of approaching 300 billion the way things are going.

That's the same as facing Greece, and about 1/30th that of the US, an economy about 75 times ours, where there is outrage over the size of the debt.

It won't just take us decades to bring that problem down, it will take hundreds of years if not a millenium to bring it under control. It took us decades to shave a few billion of the debt so what chance shaving a couple hundred billion off?

The EU need to rethink their strategy fast.
 


Expatriot

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The wind down of the loan book of Anglo will take years and Anglo will continue to exist until that wind down is completed, not as a visible deposit bank, but it will continue to wind down the loan book nonetheless.
You really need to address this point. It is central to the mess we are in.

Are you saying Anglo cannot be wound down and will not be gone within weeks?

That has been your position for years, I think you are wrong. It could have been done three years ago and will be done now.
 

Expatriot

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I agree OP.

My guess is by 2015 or thereabouts, we will be left with a national debt of approaching 300 billion the way things are going.

That's the same as facing Greece, and about 1/30th that of the US, an economy about 75 times ours, where there is outrage over the size of the debt.

It won't just take us decades to bring that problem down, it will take hundreds of years if not a millenium to bring it under control. It took us decades to shave a few billion of the debt so what chance shaving a couple hundred billion off?

The EU need to rethink their strategy fast.


No the EU is looking after the EU. Eire is the one that needs to rethink, the whole EU systems is based on each country fighting is own corner where it has the power to do so. Waiting for the EU to do our job is a cop out.

If we cant pay we must tell them that, then they can deal with that. We told them we wanted to save all banks and a lend of money to do so. They agreed. Thats our fault not theirs.
 

rhonda15

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No the EU is looking after the EU. Eire is the one that needs to rethink, the whole EU systems is based on each country fighting is own corner where it has the power to do so. Waiting for the EU to do our job is a cop out.

If we cant pay we must tell them that, then they can deal with that. We told them we wanted to save all banks and a lend of money to do so. They agreed. Thats our fault not theirs.
Umm... they pressured us strongly not to let any of our banks fail - fearing a Europe-wide Lehmans domino effect ... then they pressured us strongly to take a "bailout" ...

Time to realise we've been played.

Time to do what's best for us. They have sacrificed and condemned us to indentured servitude to save the system. No more no less. Thing is looks like they are not going to succed in saving the euro as they know it anyway.

Time for us to get our thinking caps on. We have to war game scenarios and really think hard about a structured default sooner rather than later - it's going to come anyway.

For Europe it all about buying time.

Wake up and smell the coffee.
 

He3

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I agree OP.

My guess is by 2015 or thereabouts, we will be left with a national debt of approaching 300 billion the way things are going.

That's the same as facing Greece, and about 1/30th that of the US, an economy about 75 times ours, where there is outrage over the size of the debt.

It won't just take us decades to bring that problem down, it will take hundreds of years if not a millenium to bring it under control. It took us decades to shave a few billion of the debt so what chance shaving a couple hundred billion off?

The EU need to rethink their strategy fast.
Ireland's governing establishment has some new thinking to do too. Otherwise it is toast.
 

He3

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Kevin O'Rourke of TCD and irisheconomy.ie again refers to Eichengreen's comments in an opinion piece on the editorial page of today's Business Post.

O'Rourke says the argument that we should pay back not only our own debts, but bank debts as well, presupposes that this is possible - yet most outside observers now regard it as fantasy.


'The Great Depression was caused by the slavish adherence of respectable people to an economic orthodoxy - the gold standard - that was past its sell-by date. The lesson of the interwar period is that when the rules of the game become unbearable, you change the rules. Sometimes you need a radical break with past policy mistakes to transform expectations and prepare the way for recovery. Ireland and Europe should take that lesson to heart.'
Link up tomorrow.
 

He3

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Link - Euro solution is what's needed

To shrug one’s shoulders and accept that sovereign default down the road, after years of austerity, is preferable to private sector defaults seems astonishing, but such are the depths of irresponsibility to which responsible European opinion is now sinking.
 

Sucker Punch

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Eichengreen has spelt it out clearly, a deflationary economy canot service additional debt.

The crisis countries have, in fact, shown remarkable resolve in implementing painful cuts. But one economic variable has not adjusted with the others: public and private debt. The value of inherited government debts remains intact, and, aside from a handful of obligations to so-called junior creditors, bank debts also remain untouched.
This simple fact creates a fundamental contradiction for the internal devaluation strategy: the more that countries reduce wages and costs, the heavier their inherited debt loads become. And, as debt burdens become heavier, public spending must be cut further and taxes increased to service the government’s debt and that of its wards, like the banks. This, in turn, creates the need for more internal devaluation, further heightening the debt burden, and so on, in a vicious spiral downward into depression.
So, if internal devaluation is to work, the value of debts, where they already represent a heavy burden, must be reduced. Government debt must be restructured. Bank debts have to be converted into equity and, where banks are insolvent, written off. Mortgage debts, too, must be written down.
Europe
 

MPB

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Eichengreen has spell it out clearly, a deflationary economy canot service additional debt.



Europe
A message that has been doing the rounds on this site and others for 2 years.

It looks like as the contagion spreads to the more important countries around the globe, more and more respected economists, start to inform the idiot politicians in the pay of the Banks, how it is and will how it will be.

The problem now is that current Govts have invested so much in the current attempted solutions, that they do not have the humility to reverse their policies.

History tells us that if the poltical will is not there, it will be replaced at some time in the future by ideoligical change.
 

kerdasi amaq

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The Irish People will repudiate the debt, that their idiot politicians contracted, by walking out of the country.
 

Xipe Totec

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Look: if ordinary Irish people dont share the pain, The Almighty Market is less likely to give us more pain in the future.

Is that what you want, you sinful, undeserving people??

Just trust your superiors on this: there is no alternative, so stop asking questions and get back to your miserable lives
 

sport02

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Look: if ordinary Irish people dont share the pain, The Almighty Market is less likely to give us more pain in the future.

Is that what you want, you sinful, undeserving people??

Just trust your superiors on this: there is no alternative, so stop asking questions and get back to your miserable lives
Share being the operative word, why should the Irish people take on the gamblers debts, when they infact are not sharing the pain.

There is always an alternative, FF will find that out in the next general election after the Irish people descimate that party.

Now get back into your box and stop looking for anymore attention.
 

Xipe Totec

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Share being the operative word, why should the Irish people take on the gamblers debts, when they infact are not sharing the pain.

There is always an alternative, FF will find that out in the next general election after the Irish people descimate that party.

Now get back into your box and stop looking for anymore attention.
If the irish people dont take it, the Market wont be happy and will not bestow upon us its great benevolence in the future.
You havent thought things through at all :roll:

As for Fianna Fail, the irish people dont deserve a party of such foresight, gregariousness and wisdom such as we.
We will be leaving for Tir na Nog (a little reservation in northwest Guyana) after the election, and you silly little pixie-people can go stuff yourselves!
 

He3

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