What left wing politicians should tell their electorate

Status
Not open for further replies.
Isnt it that Soverign Debt is where the State borrows - so a big deal if the state defaults. Whereas if business (e.g. Anglo) issues bonds to borrow but ends up short of the proverbial pot, then that is 'normal' debt and the lender (bondholder) may get burned.

I'm no expert but as I see it the EU put a gun to Lenihan's head for the state to guarantee the Anglo (& other bank) bonds. Maybe not on "the famous night" but remember that the guarantee was only a short term thing....initially. I think it was once the scale of the problem emerged that German banks didnt fancy such a scalding and decided the Irish taxpayer would be the better mark (pardon the pun) the carry the burden.

I've surprised myself with that left leaning populist view , but the pragmatist in me says its done now, suck it up, move on, riots and burned cars wouldnt have changed anything.
 
Has anyone who touted the burning at any point provided a single example of where burning bondholders worked out better than the alternative?

Just reading through the post, Iceland would be a good example where the burning of senior and junior bond holders appears to have worked out OK for the Country. In relation to Ireland's situation, Graig Beaumont of the IMF stated that the Irish Government could have saved billions of euro if they burned just the junior unsecured bond holders, but alas they didn't and every gambler got paid in the casino ( as it turns out, by the Irish taxpayer ). Banks like State Street bank bought Irish Government debt ( when this very proposition was been mulled over by Government ) at huge discounts from Deutsches bank and others. The Irish Government then paid State Street Bank back in full, cent for cent, allowing State Street to make 100's of millions in profits from that deal alone. Fair play to them, took the gamble, ( like all the others ) they must have known the Government would bottle it.
 
Last edited by a moderator:
Just reading through the post, Iceland would be a good example where the burning of senior and junior bond holders appears to have worked out OK for the Country.

Iceland was also suggested by odyssey06 earlier. The 60% currency devaluation they had to inflict doesn't strike me as working out OK for the country. That €20 Penny's/Primark top costs €80 in the Kringlan Mall.

There's massive industrial unrest and the government have warned that some of the pay awards they had to concede to last year to resolve strikes that were crippling the country will lead to massive inflation that will negate the effects of the rises in the short term. They even passed more legislation to bar further sections of the workforce from striking, including academics. They had no fresh mean available for over a month last year, even KFC and Dominos branches had to shut down. That's hardly doing well.

They were only able to re-enter the bond market last year and paid 3.24%.
 

So what, they wrote of 10's if not 100's of billions of euro in debt that they did not lumber the citizens of their Country with for generations, as oppose to what the Irish Government did in this Country.

So what if their currency devalued 60%, this means their imports are dearer but their exports are cheaper. Iceland is a highly export driven economy, which means that it exports vastly more than it imports, all those revenues are received in Dollar and Euro.

Industrial unrest was to be expected, but look at this Country where we were good little boys and guaranteed to pay back every single cent we borrowed as a State ( to gamblers ), is there not industrial unrest- luas drivers, train drivers, junior doctors, nurses etc. Iceland's prosecutors have jailed 28 bankers to date with trials continuing and they are going after politicians as well.

Well done Iceland, Timothy Geithner ( the economist and ex Fed Chief who talked up your Country as a place to invest in ) would be proud.

Leo, if you have children, their children's children will be paying extra taxes to help pay back these bondholders. Great little Country.
 
Last edited by a moderator:
I do love the way that some people seem to think what happened in Iceland is a panacea for all problems and all Ireland had to do was burn the bondholders and we'd all be fine

Unfortunately the facts don't back it up

Do people realize for example that in Iceland
  • the combined Income and municipal tax starts at 37%
  • that the average tax rate in Iceland has increased from 36% to 46% over the last 8 years.
  • that children can actually have an income tax liability,
  • that corporation tax is 20%,
  • that a worker must pay at least 4% of their salary into a private pension
Do you want to buy a bottle of beer in Iceland, €7 please- for a bottle!!
Go to McD's for a Big Mac meal- €11

And if you want a mortgage, all assuming you can get one because of the credit restrictions, try a 7% interest rate. Suddenly PTSB don't look so bad

Most Icelander lose more then 50% of their salary in tax, their equivalent of PRSI, levies and pensions, including low earners

I've no argument that Iceland has got back on it's feet and has nearly full employement but how much of that was done to the Icelandic govt forcing other countries to bail out their banks for them when they refused to do so themselves (look at what the UK Govt had to do for the Icelandic banks in the UK). Ireland were not in a position to do that. Secondly, regardless of who did what, the argument that the actions Iceland took had no negative effect on their citizens is ludicrous.
 
The argument that the actions Iceland took had no negative effect on their citizens is ludicrous.

Can you please point out where someone in this thread is making an argument that the actions Iceland took had no negative effect on their citizens?
Or that if we burned the bondholders we'd be all fine?

The post seems to have setup a strawman argument and then the statistics quoted do not even do a very good job of knocking said strawman down. For example, corporation tax in Iceland in 2007 was 18%. Now it's 20%. Pre-bailout, Iceland was renowned for its punitive alcohol taxes. A can of beer in 2005 cost $4.

In May 2004 Iceland's interest rate was approx. 5%, by late 2005 it was 10%.
Iceland's economic crisis started in 2008.

The tax burden increased in Iceland on citizens. In Ireland we have had USC to contend with, property tax, water charges, VAT increases, excise increases targeting wine+spirits, PRSI allowances abolished, PRSI benefits cut (e.g. dental), capping of medical insurance tax relief, increases in medical insurance levies, pension levy, tax credit decreases.

The choice is between two alternatives. One assumes there are consequences to both alternatives or people would either be burning bondholders every day or calling in the IMF\Troika at the drop of a hat.

Germany had the money to lend to us to bail out the banks, couldn't they have bailed out their own banks? We got a very bad deal in the bailout from the Troika. First FF rolled over when they came to town, and then FG rolled over when they came to power and didn't burn the junior bondholders.
 
Can you please point out where someone in this thread is making an argument that the actions Iceland took had no negative effect on their citizens?
Or that if we burned the bondholders we'd be all fine?.

There is a quote in one of the posts above which states
they wrote of 10's if not 100's of billions of euro in debt that they did not lumber the citizens of their Country with for generations,

To me, that implies that the actions they Icelandic Govt took had no negative impact on their citizens,. Perhaps you read something different into the comment, but I don't
 

I don't see how you can reasonably go from that statement to "no negative impact." I've read it five times now and no, just don't see it. Your understanding would only be correct if 'debt', and long term debt at that, is the only negative consequence possible.
 
Last edited:
Here's from the Irish Daily Mail - not my usual newspaper but came across it on our companies "news" service, and thought it might be interesting for this thread:

WHY THE LEFT IS NEVER RIGHT
19-Mar-16- Irish Daily Mail


 
Here's from the Irish Daily Mail - not my usual newspaper but came across it on our companies "news" service, and thought it might be interesting for this thread:

Hi newirishman,

What a fantastic piece. Should be prescribed reading in our LC History curriculum.

Interesting about the Berlin Wall too - when it came down, people only traveled one way!

Firefly.
 
Here's from the Irish Daily Mail - not my usual newspaper but came across it on our companies "news" service, and thought it might be interesting for this thread:

WHY THE LEFT IS NEVER RIGHT
19-Mar-16- Irish Daily Mail
Excellent article. Can you post a link to the source please?
 
An interesting read that reminded me of my own socialist views as a teenager that turned capitalism after my first paycheck
 
It reminds me of that great story about the Commissar visiting the collective farm in the 1930’s.

He questions one of the peasants about his understanding of Communism;


“Comrade”, he said, “As a Communist what would you do if you had two houses?”


“I would give one to my neighbour comrade” replied the peasant.


“And if you had two horses, would you also give one to your neighbour?” asked the Commissar.


“Yes, of course comrade” replied the peasant.


“And if you had two coats, would you also give one to your neighbour?” asked the Commissar.


“No.” Replied the peasant.


“What! Why not?!” asked the Commissar.


“...well I have two coats” he replied.
 
"If you're not a socialist before you're twenty-five, you have no heart; if you are a socialist after twenty-five, you have no head", not sure who said it. I think socialism as an idea appeals to the young. As you age and realise how difficult it would be to implement, the enthusiasm fades.

Socialist: someone who has nothing and wants to share it with everyone.
 
I like this one - probably urban myth, but a good story all the same....

An economics professor at Texas Tech said he had never failed a single student before but had, once, failed an entire class. The class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said ok, we will have an experiment in this class on socialism. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too; so they studied little ...

The second Test average was a D! No one was happy. When the 3rd test rolled around the average was an F. The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else. All failed to their great surprise and the professor told them that socialism would ultimately fail because the harder to succeed the greater the reward but when a government takes all the reward away; no one will try or succeed.
 
"If you're not a socialist before you're twenty-five, you have no heart; if you are a socialist after twenty-five, you have no head", not sure who said it. I think socialism as an idea appeals to the young.

I think it's up there with smoking. For young people, it's not that smoking itself is cool, it's just that cool people smoke. It loses its allure eventually.
 
"If you're not a socialist before you're twenty-five, you have no heart; if you are a socialist after twenty-five, you have no head", not sure who said it.

“Any man under thirty who does not vote Labour has no heart, and any man over 30 who does not vote Conservative has no head”. It's often incorrectly attributed to Winston Churchill, but he never said it. I've a friend who was a Labour Party councillor in the UK. He said that if he had a pound for every time somebody quoted it to him when he was campaigning for Labour he would be a rich man.
 


Would he still be a socialist though?
 
Status
Not open for further replies.