Surely we should take a break?
RTÉ Business: Exchequer deficit hits €20 billion
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"The huge rise in the deficit is being attributed to a €4.8 billion decline in tax receipts, the €4 billion paid to Anglo Irish Bank to save it from going under and the €1.7 billion that has been pumped into the National Pension Reserves Fund."[/FONT]
The pension reserve fund is to stop total social chaos if they cannot pay out. Anglo is just socialising private sector debt.Originally Posted by X-ray
They should stop borrowing, but can't as the country would be anarchic.
Fintan O'Toole had this months ago
In hock to lenders as we keep on gambling - The Irish Times - Tue, Jul 28, 2009
There’s just one problem. Knowing that the McCarthy report was going to recommend that the NPRF payments be suspended, you would assume that the Department of Finance held off on handing over this year’s money. Astonishingly, it not only made this year’s payment early, it has also handed over most of next year’s as well. The department, presumably with the full approval of the Government, has deliberately sabotaged the most obvious and least contestable recommendation of the McCarthy report.
there would be social chaos if we did not add to a fund that wont pay out for thirty years?
A three year break would seem sensible to me. I would not borrow money to by AVCs, why is the country doing so?
i really really dont get this one
Was about to start a new thread on this until I found this old one. I can't believe a bigger deal isn't being made of it, considering it would contribute over one third of the total adjustment required this year in one fell swoop.
The National Pension Reserve Fund was set up mid boom. The concept of it is essentially sound. Heretofore, the state has paid old age pensions from current expenditure. This isn't sustainable in the context of an aging population with a longer life expectency. So the state pays a fixed proportion of GDP each year into a fund which is managed like any pension fund. No drawdown from the NPRF is supposed to occur before 2025. In theory, this should allow it to ride out the highs and lows of the markets and produce a decent return for the tax payer by the time drawdown starts.
But ...
By the end of last year, the state had payed 16.9 billion into the NPRF, and having invested this sum, the fund had 16.1 billion - a loss of 800 million. The state paid 1.69 billion into the fund in 2008, and the fund lost 30% of that figure (details here http://www.nprf.ie/Publications/AnnualReport2008.pdf). Now I appreciate that 2008 was a difficult year for the markets and I actually think it is performing better than many pension funds. I'm not arguing that it should be stopped or that it shouldn't invest in the way it does.
However, at a time when we're smashed broke, it strikes me as ludicrous that we are borrowing money in order to invest it into a loss making fund. Its completely prudent to put money aside when in surplus, but that was then, and this is now.
Does anyone else feel it might be more prudent to halt government contributions for a couple of years, resuming them when we finally begin to emerge from the hole we're now in?
We should definately take a break and either pay a bit more in any future good years or just pay a reduced pension in the future.
I think this is an unavoidable logic. We need to start facing up to reality together here. Some people are all for everyone else facing reality for them. No good.
We need to cut everything out that is not effectively essential to the running of the country until we stabilise. If this were to happen rapidly there might be a lot of listening done by ordinary people when they are asked to make further sacrifice. I certainly would be far more willing to listen to talk of cutting my pay in this context, without I am not.
Capital spending, quangos, industry supports etc should all be slashed immediately too. No more reports or think tanks, just do it now. We could slash 8-10 billion out of the budget before even looking at core services. If you want to include mccarthy and the proposed pay cuts and some tax rises that is well up to 16-17 billion. There is alot of talk about hard decisions, but none actually happening, ministers cannot even control the spending concerning their own business of state let alone the mushrooming of ego projects that are fundnig pals thru the recession.
And any further cash to banks, even one euro must result in a tranfer of shares in that company straight to the state, no fudge either.
How would you feel about borrowing money at, say, 4%pa to invest in a fund earning 8%pa? (Hypothetical figures, of course).
Nothing will motivate the lazy / apathetic / Americanised / west-British types to embrace their culture and the Irish language.
We have already paid the money in for next year, are they trying to make things look worse than they are so they will be great men when they solve it?
Great, as long as the 8% fund isn't subject to change, and at the end of its term only yields 2%!
Terms & conditions apply, the value of your investment can go down aswell as up, your home is at risk if you do not ..... blah, blah, blah.
However, clearly if you find any of these schemes whereby I can get rich quick, kindly PM me. Like an ould gamble.
I am indignant - or just plain grumpy - or both.
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