In 2016, we will borrow €2,765,000,000 or €600 per man woman and child

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Additionally we should introduce a Benefits Cap similar to the one introduced in the UK so that people cannot 'game' the anomalies in the system.
 
Firefly said:
At a personal level, why would anyone want to borrow for anything other that an asset such as a house or an education? Why is it different at a national level - isn't this just the same as going to the Credit Union for the weekly shop at Tesco?
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As you suggest, it could be different at a national level if the government were to invest in things that will grow the economy, and more than pay back the money borrowed over time. It's the same as companies which borrow all the time to invest in equipment and infrastructure to grow their business.

But none of this applies to the recent budget which was a pre-election giveaway rather than an investment. As Constantin Gurdgiev puts it, "the Budget was a net positive for current consumption spending, and was a net zilch for investment."
 
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There is no point complaining about give away budgets unless you have an idea how to change the nature of our political system. Every government I have seen over the years has done it. The type of person that gets to be a politican in Ireland is largely the same no matter what party they belong. Most have never had to go out and earn they income and instead have had it paid by someone else. This breeds a bad relationship with money and a misbelief that money is not infinite. So a lack of discipline in prudent spending is not what keeps them up at night. Run a small business for a few years and you quickly develop an understanding for how money is not infinite.
 
Sophrosyne said:
Let's do a what if scenario.

What would happen if we did not borrow?
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What would happen?

The government would lose the next election, they might lose it anyway, and FF, SF and the Loony Left would form the next government.

The question isn’t whether the budget was economically irresponsible, of course it was, the question is why are the electorate so stupid.
 
Doesn't a balanced Budget also mean no borrowings for that year alone? In personal terms the same as not increasing your overdraft you're living out of - reducing the overdraft is very difficult.
 
The {trick} for incumbent Government is
1.. How to get re-elected.
A.That means giving out a few good-will crumbs , which is what has been done.
B. Ensuring that said (crumbs) sneak under EU Rules , phew they do !
C. Try to keep society together, a hard quick lowering of welfare or large increase in taxes would doubtless have bad unintended consequences.

The reality may well be that our path of not increasing real debt (vizaviz inflation/growth) might be the best way ,and we can hope that no internal/external earthquakes come our way.

Our society has spent decades getting to were we are , I do not think it would hold if too many shocks (no matter how sensible) were applied.
 
Purple said:
The question isn’t whether the budget was economically irresponsible, of course it was, the question is why are the electorate so stupid.
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In economic terms, why do you think the budget was economically irresponsible and why do you think that the entire electorate are stupid.
 
Sophrosyne said:
In economic terms, why do you think the budget was economically irresponsible and why do you think that the entire electorate are stupid.
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The entire electorate are not stupid, just enough of them to swing the vote.
We should be getting rid of our deficit and starting to pay back our debts, not borrowing more.
High earners want tax cuts but we can't afford it.
Low earners and non-earners want increases in welfare but we can't afford it.
Middle income people still persist with the delusion that they are the "squeezed middle".
We still talk of austerity when we borrow money for day to day expenditure; that's not austerity.
Our economy is growing after nearly a decade of flat or negative growth which was the result of pro-cyclical economic policies pursued by the people that ran the country (of whom the government were one element) and now, at the first chance we get, we are implementing a pro-cyclical budget.
It's crazy and it's not in the national interest but if the government don't do it they will get hammered in the next election. How would you describe an electorate who behave in that way?
 
Purple,
Can,t disagree with you .
From my limited knowledge of country deficits it appears deficits are an interest only type repayment with the princpal owed being pushed out and out and out.
Most countries see this end payment as something to keep passing on and on.Unless lenders feel that countries can,t manage interest only payments the lenders are happy nuff.

Its pure madness.
The electorate arn,t stupid, just ostrich like !
 
Although Ireland has very high levels of debt at present, there can be good reasons to increase the amount of money in an economy. It can lead to increased to additional economic activity, of course it can just lead to inflation.

We as an electorate are fed so much shallow analysis by the media that it can be difficult to get a true picture of reality.

Many voters vote in their own self interest, rather than the national interest. This is in fact the whole idea of representative democracy as it evolved. Parliament involved representatives of the commons and the landlords. The labour party represents a sectional interest. The Seanad (in theory) represents sectoral interests. Representation of these interests is weighted according to the vote and differences resolved in parliament.

If you live off the public purse, it makes sense to vote for a party that will increase welfare. Someone else can worry about the sustainability of the system.

If you pay high taxes, it makes sense to vote for a party that will reduce tax. Someone else can worry about inequality and public services.
 
We are living in a bubble type of economic world that in my opinion will eventually have to end some day. for a hundred years now country's borrow money from wealthier Country's and never pay it back,just pay the interest from current tax collected. Then encourage inflation to over time allow the money borrowed to lose it real value, 100 borrowed 20 years ago cannot buy the same today. However since money is no longer backed by gold and instead is just based on trust, (i.e. I will take money from you for my goods and services because I trust somebody else will do the same) I believe that trust could be very quickly lost.
 
odyssey06 said:
Next, introduce a 'bonus' % payment to public sector based on GDP growth - instead of restoring pay levels and then when things go down you have to cut which involves nonsense every year with unions.
This way you have a floating amount reflecting how the country is doing.
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I think this idea is seriously misguided. Public servants are not shareholders in the economy, citizens are. Public servants are employees, the only responsible approach is to have them work in a productive way and to pay the going rate. Any playing of politics can only lead to the mess we are in. The can be political posturing from the left tending to give relatively unskilled public workers a higher salary than they could get elsewhere or the political posturing from the right that somehow argues that a person doing a job in a hospital is less deserving of a salary than one in an estate agent. It is astonishing that opinion in this country invariably supports political fiddling with PS remuneration, the only disagreement is on whose politics should win out.

As to the general point, I think the wisdom or otherwise of borrowing when the economy is growing depends on the spare capacity in the economy, especially when interest rates are at a record low. When there is still spare resources, like now, the growth leads to benefits and more revenue for the government. The trick is knowing when to stop, which sadly our "leaders" seem unable to do and in 2 or 3 years we could be in Bertie territory again.
 
In 2016, we will borrow €2,765,000,000 or €600 per man woman and child
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Continuing to increase our national debt, while reducing the level of tax take and increasing the level of spending... absolutely genius, lets vote the lads who thought this one up, back into power :rolleyes:

Short term thinking, based on wanting to get relected and no more.
 
Sophrosyne said:
I am sure public servants would be very surprised to discover that they are not taxpaying citizens!
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I didn't say they were not taxpaying citizens. In fact that was my point, public servants have an equal responsibility for funding public services as other citizens, no more, no less. As employees they should work productively and expect the appropriate pay for that.
 
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Ok. Given that they are taxpayers, why are public servants "not shareholders in the economy", and why make the distinction between citizens and public servants?
 
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Sophrosyne said:
Ok. Given that they are taxpayers, why are public servants "not shareholders in the economy", and why make the distinction between citizens and public servants?
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In their capacity as citizens public servants are shareholders and so should be expected to pay the same taxes and so forth as everyone else. What is so unclear about this?
 
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