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  1. #21
    eurlex eurlex is offline

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    So the gap between government revenues and spending has now closed to the point where the majority of it is accounted for by interest payments on accumulated debt?

    That's good news.

    It means that all of the other elements which made up the deficit are now either eliminated or under control.

    I think the time for reining in the deficit by imposing cuts at a greater ratio than tax increases is over.

    The bulk of the remaining budget adjustments necessary to close the deficit should be concentrated on increases on taxation targeted at the wealthiest segments of the population, those whose share of national wealth has actually increased since 2008.
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  2. #22
    cozzy121 cozzy121 is offline
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    Quote Originally Posted by Sucker Punch View Post
    .............[*]What now of Ireland's 'special case' and what are the chances of having some/all of this debt being repudiated/renegotiated? [/LIST]
    Here's your answer.
    Our masters have spoken.

    Berlin MPs to play down Irish chances of debt relief
    German finance politicians on Dublin visit to say no further relief without tax reform
    Berlin MPs to play down Irish chances of debt relief - Economic News | Ireland & World Economy Headlines |The Irish Times - Mon, Jun 16, 2014
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  3. #23
    DuineEile DuineEile is offline

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    Quote Originally Posted by Spanner Island View Post
    If we're continuing to borrow ca. 12 billion per year just to keep things as they are (albeit with continuing cuts) that's money which has to be repaid with interest added on top.

    I assume we're not borrowing that money for the hell of it and that if we didn't need to borrow it we wouldn't.

    No amount of cherry picking the numbers or interpretation of the numbers changes this.
    We have always borrowed money. Even when we were in surplus.

    Mad, I know. But true.



    D
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  4. #24
    fliball1234 fliball1234 is offline

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    Quote Originally Posted by DuineEile View Post
    We have always borrowed money. Even when we were in surplus.

    Mad, I know. But true.



    D
    Not much of an argument, we should get away from borrowing and live within our means
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  5. #25
    The Cat The Cat is offline

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    Quote Originally Posted by Cdebru View Post
    That's the cost they are admitting to and plays with the whole "the bank debt is not the problem" spin that various sections have been spouting the last few years.

    This is based on 41 billion of debt being attributable to bank debt but the cost of the bail out was 64.1 billion so it is like the other 23.1 billion was free money that has not no cost or loss of income to the state.
    A significant amount of the bank debt has been recovered. BOI has bought back shares from the govt, aib and tsb have paid money to govt, Nama has paid money to govt. WE only pay interest on the outstanding balance.
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  6. #26
    Taxi Driver Taxi Driver is offline

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    Quote Originally Posted by Sucker Punch View Post
    So when the CB moves the bonds on, it's safe to say that the interest no longer accrues to the state, ergo the 1.6bn figure stands?
    The bond sales are not due to the completed until sometime in the 2030s. It is then that none of the interest will be recycled back.
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  7. #27
    Taxi Driver Taxi Driver is offline

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    Quote Originally Posted by ShoutingIsLeadership View Post
    Sorry, I meant the interest currently paid on the money.
    The interest is not destroyed. The surplus the Central Bank makes on the interest it receives will be channeled back to the government. When the Central Bank sells the bonds it will use the money received to "repay" the money created in the first place. The money paid by the government (the interest) will not be destroyed). The money paid by investors (capital to buy the bonds) will be destroyed.
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  8. #28
    ShoutingIsLeadership ShoutingIsLeadership is offline
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    Quote Originally Posted by Taxi Driver View Post
    The interest is not destroyed. The surplus the Central Bank makes on the interest it receives will be channeled back to the government. When the Central Bank sells the bonds it will use the money received to "repay" the money created in the first place. The money paid by the government (the interest) will not be destroyed). The money paid by investors (capital to buy the bonds) will be destroyed.
    Yeah, what I was getting at was that under the current arrangement the interest seems not to be destroyed but is recycled, whereas when these bonds are sold to the market, the interest will obviously be paid to the bondholders, thus leading to an actual cost to the exchequer every year. Is my understanding correct?
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  9. #29
    Taxi Driver Taxi Driver is offline

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    Quote Originally Posted by ShoutingIsLeadership View Post
    Yeah, what I was getting at was that under the current arrangement the interest seems not to be destroyed but is recycled, whereas when these bonds are sold to the market, the interest will obviously be paid to the bondholders, thus leading to an actual cost to the exchequer every year. Is my understanding correct?
    Yes.
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  10. #30
    ShoutingIsLeadership ShoutingIsLeadership is offline
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    Quote Originally Posted by Taxi Driver View Post
    Yes.
    Thanks.
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