Why are we bailing out snr bondholders again?

[Firefly]

Just for the record, depositors were already covered up to €100k per person before the guarantee.

Exactly. If the guarantee wasn't in place, the government could default on both the bond holders and depositors. Now, as it can't renage on deposits it cannot default on the bonds.

 

[Chris]

The Swiss Government also subsidise health insurance costs so that the cost of premium doesn't go over 8% of income which is a good idea but not sure how it would work here. To be honest, it is very difficult to compare the two. Would need detailed economic analysis to get a better picture. I like the idea in theory though and to be fair to Labour and FG, it is a road they want to go down. I don't think mixing public and private works.

It's the social security insurance that makes up the difference or pays the premium for unemployed. You are right in that you cannot compare the two systems, but you can see that the Swiss system is both cheaper and better.
For it to work here the government first has to balance the budget. Then it would take out the €14b euro of HSE budget and reuce the tax burden by that amount on the taxpayer. The taxpayer would then be in a position to buy private health insurance from competing companies. I'm not saying it would be something that can be done quickly or easily, but the Irish system is totally useless as it is.

But in Ireland the average person on 35k pays 2,500 per year on PRSI and another 1000 on private insurance.

That is on your income only. The HSE's budget is not solely derived from income tax and PRSI. Your 21% VAT, and excise duties on fuel, alcohol, cigarettes, stamp duty, etc. also go towards it. Let's say the average person spends €25000 of the income, then in VAT alone about €5000 in tax is collected. Ultimately the average person in this countries pays €3500 per annum in one way or another for the grossly crap HSE, while the Swiss pay €3000.

PRSI goes towards your State Pension as well as well as other social welfare entitlements, not just health. Also, you don't have to take out health insurance. You will still be treated by the public service. In Switzerland, you do have take out insurance.

Actually your PRSI goes towards the pension of current pensioners. It is not an insurance, and actually an insult for government to call it such. Your state pension will be paid for (or not) by those still working when you retire. As Purple highlited in another post, it's a ponzi scheme run by government: http://www.askaboutmoney.com/showthread.php?t=144414

 

[Towger]

PRSI goes towards your State Pension as well as well as other social welfare entitlements, not just health.

By the time I get to retire (don't forget 68 is the current future retiring age) so will the bulk of the grossly expanded number of public sector employees from the tiger years. There will be no pension reserve left and not enough workers in the country to fund the PS pensions, let alone provide a contributory Social Insurance pension at 33% of the average industrial wage to Private Sector employees, as promised by our current leaders.

 

[Complainer]

Negative effect on the economy as a whole and therefore on every member of society. When you increase taxation on large, wealthy companies or individuals four things happen:
1) They have less profits to reinvest to expand business operations
2) They have less incentive to increase their operations or investments
3) New competition is reluctant to enter due to less profit opportunity
3) And worst of all some will move somewhere else altogether

All these are detrimental consequences on the economy, whether you are a pensioner, a child, wealthy or poor. Actually, probably more so on the less well off as job opportunities deminish and they are less able to move.

You seem to equate 'economy' with 'society'. What is good for the economy (going by your measures) is often not good for society. There is clear evidence that income inequality is not good for society, across a whole range of measures (See Equality Trust UK's website for evidence). There are people who are part of society, but who did not benefit from our booming Celtic Tiger economy, such as the people who live in Dolphin House and who's drinking water has the same eColi levels as raw sewage.

I don't want to move to far away off topic, but here are some to start with that I have mentioned on other threads:
1) Communications, Energy
2) Community, Equaity and Gaeltacht Affairs
3) Enterprise, Trade and Innovation
4) Heritage and Local Government
5) Tourism, Culture and Sport
These are services that are not essential (to say the least) and given the state of public finances cannot be afforded.

I see, so no IDA/Enterprise Ireland (despite that fact that every developed economy in the world has resourced dedicated to attracting FDI. No Equality Tribunal to address discrimination by public and private service providers at a low cost. No Library service. No local authority sports/leisure centres which are offering amazing services to those who can't afford gym memberships. No Cliffs of Moher visitor centre or Boyne Valley interpretive centre, all of which serve to bring tourist spend into the country etc etc etc.

The Irish people have firmly rejected the PD approach. More Irish people want to live in a country that provides decent public services to all, than want to live in a desolate, divided wasteland of the haves and the have-nots.

The wastage in government far far exceeds that in large and small private organisations. It is not even on a comparable level! If a private organisation wastes too much it risks going out of business. When government departments waste too much the budget is increased and more money is taxed or borrowed to pay for it. The reason private enterprises provide vastly better services than public ones, is because a private company only makes profits if it attracts customers who are free to make a choice. The profit is a reward for providing the best product at the best price, i.e. the result of best serving the public. When it comes to government services you do not have a choice. And because wastage is not punished, but rewarded, more government services will only increase overall wastage.

So what's your source for the claim that public wastage exceeds private wastage? What's the source for your claim that private companies provide vastly better services than public ones?

This is great theory, but it just doesn't work in the real world. Have a look at the posts here on AAM, and you'll see customers have just as many problems with their hotel, or their accountant, or their car dealer as they do with their local authority or Govt dept.

 

[shnaek]

There is clear evidence that income inequality is not good for society, across a whole range of measures (See Equality Trust UK's website for evidence).

There is indeed, clear evidence in the likes of North Korea and Cuba, where income inequality is not tolerated.
There is also clear evidence that countries that levy low tax (Switzerland, Hong Kong, Monaco) are very successful - much more successful than Cuba or North Korea.
The equality agenda is driven by nothing other than begrudgery. Of course a civilised country needs to provide services which help to ensure equality of opportunity. A civilised society should ensure health, education, water etc standards. But a society that enforces wage equality is one destined to failure. Read all the studies one likes - history shows this to be true.

 

[Complainer]

There is indeed, clear evidence in the likes of North Korea and Cuba, where income inequality is not tolerated.
There is also clear evidence that countries that levy low tax (Switzerland, Hong Kong, Monaco) are very successful - much more successful than Cuba or North Korea.
The equality agenda is driven by nothing other than begrudgery. Of course a civilised country needs to provide services which help to ensure equality of opportunity. A civilised society should ensure health, education, water etc standards. But a society that enforces wage equality is one destined to failure. Read all the studies one likes - history shows this to be true.

You obviously haven't read the evidence, given your one dimensional view. I've certainly never proposed income equality. However, there is no doubt that wide income inequality is bad for everybody. The evidence is there, whether you like it or not.

 

[shnaek]

You obviously haven't read the evidence, given your one dimensional view. I've certainly never proposed income equality. However, there is no doubt that wide income inequality is bad for everybody. The evidence is there, whether you like it or not.

Where is it? I have pointed out solid evidence to the contrary. The reason that wide income inequality is labled as bad is because of begrudgery. The way to eliminate begrudgery is through education and upbringing. In a free democracy there are going to be those who do really well, and those who do badly. The only way to stop this is through a socialist system where everyone is equally miserable. And I say equally miserable, because there has never been a solicalist system where everyone is equally happy.

 

[Complainer]

Where is it? I have pointed out solid evidence to the contrary. The reason that wide income inequality is labled as bad is because of begrudgery. The way to eliminate begrudgery is through education and upbringing. In a free democracy there are going to be those who do really well, and those who do badly. The only way to stop this is through a socialist system where everyone is equally miserable. And I say equally miserable, because there has never been a solicalist system where everyone is equally happy.

I told you where it was in my earlier post, i.e. "There is clear evidence that income inequality is not good for society, across a whole range of measures (See Equality Trust UK's website for evidence)". So where is your 'solid evidence to the contrary'?

I don't think that many people in the Nordic countries, or in Japan have a miserable existance. Compared to us, they are on the pigs back.

 

[shnaek]

See Equality Trust UK's website for evidence.

Sending me to the Equality Trusts website for evidence that their agenda is the correct one is like sending me to a dairy farmer for evidence that drinking milk is good for me.

I don't think that many people in the Nordic countries, or in Japan have a miserable existance. Compared to us, they are on the pigs back.

Are you suggesting Nordic countries and Japan have income equality?

In Japan you move to the top rate of 40% income tax at €160k. In Finland it's top rate of 30% is payable on incomes of €66k and over

 

[Complainer]

Sending me to the Equality Trusts website for evidence that their agenda is the correct one is like sending me to a dairy farmer for evidence that drinking milk is good for me.

There is none so blind as the one who does not want to see. The evidence (all published, peer-reviewed papers) is all there. Or better still - read the book - The Spirit Level: Why Equality is Better for Everyone

Are you suggesting Nordic countries and Japan have income equality?

In Japan you move to the top rate of 40% income tax at €160k

I'm not going to take you through the evidence, post by post. Go read the evidence or the book. It's all there.

 

[shnaek]

There is none so blind as the one who does not want to see. The evidence (all published, peer-reviewed papers) is all there. Or better still - read the book - The Spirit Level: Why Equality is Better for Everyone

I'm not going to take you through the evidence, post by post. Go read the evidence or the book. It's all there.

The answers are not to be found solely in academia. One must also open ones eyes and take a look around.

Or better still - read the book - The Spirit Level: Why Equality is Better for Everyone

I haven't read the book, but I see from reviews on:
http://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equal_Societies_Almost_Always_Do_Better
that opinion on the book is divided.

 

[Complainer]

The answers are not to be found solely in academia. One must also open ones eyes and take a look around.

Or to translate - I'm going to ignore the evidence that I don't like, and quote one or two irrelevant examples that disprove another completely different issue.

I haven't read the book, but I see from reviews on:
http://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equal_Societies_Almost_Always_Do_Better
that opinion on the book is divided.

Indeed, the findings have been so damning that some of the 'usual suspects' have got very animated about trying to nitpick and discredit them. All of the nitpicking has been answered by the authors.

 

[orka]

...there is no doubt that wide income inequality is bad for everybody.

It’s a bit of a stretch to say there’s no doubt. The ‘evidence’ has not been universally accepted as correct by any stretch of the imagination. A group of academics writing a paper does not make their conclusion ‘beyond doubt’.

And ‘bad for everybody’? I've read through the 'evidence' on the Equality Trust website and, to me, it looks like the conclusions (such as can be drawn from a series of regression charts) are that some selected ‘bad things’ are more prevalent than average in some selected countries with income inequality as defined by the authors. I don’t see on the website where they have taken the step from ‘bad on average’ to ‘bad for everyone’.

A lot of what they say seems obvious – poor people are more likely to have lower education levels, be teenage mothers, do drugs, go to prison etc. – but where is the impact on ‘everyone’? For the ‘haves’ in society, what is the impact of an unequal society giving rise to more teenage mothers? There’s obviously a cost in terms of paying social welfare etc – but does that outweigh the cost of creating a more equal society which would prevent some of the teenage births? I don’t see that analysis, research or discussion in the trust’s research.

More glaringly obvious is the ‘social mobility’ category – the ‘shock’ conclusion is that there isn’t much social mobility (rich to poor and vice versa) in unequal societies – what is the benefit to the ‘haves’ of social mobility if it means there’s a greater chance their children will migrate to being poor? How is this inequality ‘bad for everybody’ when it is so obviously good for those who already ‘have’?

I’m obviously devils-advocating here and I don’t really like injustice or unfairness in any shape or form but I don’t think this research can be held up as proof beyond doubt that inequality is bad for everyone.

the findings have been so damning that some of the 'usual suspects' have got very animated about trying to nitpick and discredit them. All of the nitpicking has been answered by the authors.

It wasn’t all nitpicking by the usual suspects – there were critics from left and right, from academia and from social care practitioners. Just because the authors replied to the criticism, doesn’t make the last word correct does it? In fact, from my quick reading this afternoon, it looks like one of their main critics has answered back again – does that make his last word correct?

What is beyond doubt is that there is ongoing practical and academic debate over this research and many have severe misgivings about the approach and the conclusions so I don’t think you can hang your hat on it and say – read this – it is gospel.

 

[Complainer]

And ‘bad for everybody’? I've read through the 'evidence' on the Equality Trust website and, to me, it looks like the conclusions (such as can be drawn from a series of regression charts) are that some selected ‘bad things’ are more prevalent than average in some selected countries with income inequality as defined by the authors. I don’t see on the website where they have taken the step from ‘bad on average’ to ‘bad for everyone’. [/FONT][/COLOR]

A lot of what they say seems obvious – poor people are more likely to have lower education levels, be teenage mothers, do drugs, go to prison etc. – but where is the impact on ‘everyone’? For the ‘haves’ in society, what is the impact of an unequal society giving rise to more teenage mothers? There’s obviously a cost in terms of paying social welfare etc – but does that outweigh the cost of creating a more equal society which would prevent some of the teenage births? I don’t see that analysis, research or discussion in the trust’s research.

You've missed the whole point of the book. The whole point is that yes - income inequality is bad for everybody. On all the measures they studies, the impacts on things like mental health, obesity, life expectancy were all worse for all groups (regardless of income) in those countries with high income inequality.

More glaringly obvious is the ‘social mobility’ category – the ‘shock’ conclusion is that there isn’t much social mobility (rich to poor and vice versa) in unequal societies – what is the benefit to the ‘haves’ of social mobility if it means there’s a greater chance their children will migrate to being poor? How is this inequality ‘bad for everybody’ when it is so obviously good for those who already ‘have’? [/FONT]

Again, you've missed the point. It is not 'good' for those who 'have'. It may be good for their wealth, but it is not good for the mental health, their obesity, their addiction rates etc etc.

This is indeed the shock conclusion. The lack of social mobility higlights the myth of the 'American dream', that anyone can work their way up the ladder. They can't. I read an interesting quote from the Chicago projects in a book by Jon Jeter this morning, something along the lines 'The Dow Jones Index can go up 500 points or go down 500 points - Niggas still be poor'. (His terminology, not mine).

 

[orka]

You've missed the whole point of the book.

Not overly surprising as I haven't read the book - just the website. And the website presents a bunch of regression charts showing that, on average, the selected indicators are worse in selected countries with income inequality as defined by the authors - it shows no evidence that this affects 'everyone'.

Again, you've missed the point. It is not 'good' for those who 'have'. It may be good for their wealth, but it is not good for the mental health, their obesity, their addiction rates etc etc.

You have missed MY point - yes, things may be worse ON AVERAGE for mental health, obesity, addiction rates etc. - but how does that extend to EVERYBODY? (e.g. how does it affect a well-off, slim, mentally sound, unaddicted, educated, physically healthy person from a family with similar genes who will most likely end up similarly?)

This is indeed the shock conclusion. The lack of social mobility higlights the myth of the 'American dream', that anyone can work their way up the ladder.

Social mobility works both ways - so, again, what is the benefit to the 'haves' of trying to change the social system of their country so that there's a greater chance their children will end up poor - and more prone to obesity, teenage pregnancy, lower education etc?

The more I read about the research, the more flawed and less convincing I find it.

 

[Complainer]

Not overly surprising as I haven't read the book - just the website. And the website presents a bunch of regression charts showing that, on average, the selected indicators are worse in selected countries with income inequality as defined by the authors - it shows no evidence that this affects 'everyone'.
You have missed MY point - yes, things may be worse ON AVERAGE for mental health, obesity, addiction rates etc. - but how does that extend to EVERYBODY? (e.g. how does it affect a well-off, slim, mentally sound, unaddicted, educated, physically healthy person from a family with similar genes who will most likely end up similarly?)

Social mobility works both ways - so, again, what is the benefit to the 'haves' of trying to change the social system of their country so that there's a greater chance their children will end up poor - and more prone to obesity, teenage pregnancy, lower education etc?

The more I read about the research, the more flawed and less convincing I find it.

You really haven't read anything significant about it. Go read the book. Seriously.

 

[orka]

You really haven't read anything significant about it. Go read the book. Seriously.

I have a long plane journey coming up so I might (along with its apparant companion piece, The Spirit Level Deception) as I do find studies like this interesting but it's not a great recommendation if they can't synthesise the information well for their website.

 

[shnaek]

Or to translate - I'm going to ignore the evidence that I don't like, and quote one or two irrelevant examples that disprove another completely different issue.

One book is not "Evidence". If it were I would simply write a book about how I was amazing, throw in some graphs and charts and manipulated statistics, and then go around quoting that book as evidence to my amazingness.

And I'm sure some people of our acquaintance - Fingers and Fitzy - would go and write a book about how innocent and mis-understood they are. And then hold that up as 'Evidence'. It's in the book, m'lud!

 

[csirl]

You've missed the whole point of the book. The whole point is that yes - income inequality is bad for everybody. On all the measures they studies, the impacts on things like mental health, obesity, life expectancy were all worse for all groups (regardless of income) in those countries with high income inequality.

So how do you explain the fact that free western style democracies such as USA, Ireland, UK etc. where there is income inequality, consistantly outscore countries such as North Korea, Cuba, Mynamar etc. where there isnt income inequality in all these categories? We even had, what was in effect, a contolled experiment running in Europe on this issue for a number of decades - i.e. the Iron Curtain. Surely this conclusively proved beyond any doubt that income equality is BAD for any country?

Remember, that the most equal society is the one with equal opportunities, not equal income.

 

[shnaek]

Remember, that the most equal society is the one with equal opportunities, not equal income.

And this is also the society with the most Freedom.