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Thread: Should the Government publish all budget measures needed to get to a 3% Deficit by 2016?

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    Default Should the Government publish all budget measures needed to get to a 3% Deficit by 2016?

    Should the Government publish all budget measures needed to get to a 3% Deficit by 2016?

    People need certainty as to what their finances will be over the coming years. With a current borrowing requirement of about €13 billion a 3% deficit would mean reducing borrowing to about €5 billion. Many People will be very reluctant to spend money if they are concerned about their income falling.

    People still need to plan budgets over the next five years. It would help greatly if Government published their plans now rather than keeping people in suspense for the next number of years. Giving people the fullest information about future budget requirements would help people to budget and help restore more confidence.

    Do the Government have more rabbits to pull out of their hats like the Promissory note deal that will ease borrowing by about €2 billion for each of the next ten years?

    What is the expectation for revenue side to increase?

    Are there political disadvantages to releasing information now rather than keeping future budgets a surprise?

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    Before we even address the question we should ask: are any such measures even possible?

    A deficit is composed of income and spending. When the former is lower than the latter, there is a deficit. When it's vice versa there is a surplus.

    In AFFI (Austerian Fairydust Fantasy Island) getting to a deficit of 3% is easy-peasy-lemon-squeezy (children's TV presenter-speak intentional, in order to underline the juvenile nature of the thinking in AFFI): all you do is reduce spending until it's no more than three-hundredths above income.

    Outside AFFI, where Mean Mister Reality is in charge, the fairydust doesn't work.

    In the real world, spending and income are related.

    Income (from taxes) is directly related to the economy, which is often measured by GNP or GDP.

    Not just a one-to-one relationship either. It multiplies. If you cut state spending by, say, €5bn, the economy (whether you measure by GDP or GNP) shrinks by between €7bn and €10bn.

    We've seen copious proof of this phenomenon. I offer you for your perusal the economies of Spain, Portugal and Greece. The evidence is overwhelming: cutting your way to a lower deficit is simply impossible. (There might be an exception if the western world was booming, but it isn't and definitely won't at any point before 2016).
    When you see the words "Mises" or "Hayek" in someone's post, just ask yourself: do I really want to ban paper money and go back to gold?

    You have to pity the kind of people who buy into conspiracy theories. I find the following to be the saddest words on the internet: "Re: connection between Bilderberg puppet lady gaga and viral outbreak in ukraine "

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    Quote Originally Posted by feargach View Post
    Before we even address the question we should ask: are any such measures even possible?

    A deficit is composed of income and spending. When the former is lower than the latter, there is a deficit. When it's vice versa there is a surplus.

    In AFFI (Austerian Fairydust Fantasy Island) getting to a deficit of 3% is easy-peasy-lemon-squeezy (children's TV presenter-speak intentional, in order to underline the juvenile nature of the thinking in AFFI): all you do is reduce spending until it's no more than three-hundredths above income.

    Outside AFFI, where Mean Mister Reality is in charge, the fairydust doesn't work.

    In the real world, spending and income are related.

    Income (from taxes) is directly related to the economy, which is often measured by GNP or GDP.

    Not just a one-to-one relationship either. It multiplies. If you cut state spending by, say, €5bn, the economy (whether you measure by GDP or GNP) shrinks by between €7bn and €10bn.

    We've seen copious proof of this phenomenon. I offer you for your perusal the economies of Spain, Portugal and Greece. The evidence is overwhelming: cutting your way to a lower deficit is simply impossible. (There might be an exception if the western world was booming, but it isn't and definitely won't at any point before 2016).
    Of course they are possible!

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    Quote Originally Posted by feargach View Post
    Before we even address the question we should ask: are any such measures even possible?

    A deficit is composed of income and spending. When the former is lower than the latter, there is a deficit. When it's vice versa there is a surplus.

    In AFFI (Austerian Fairydust Fantasy Island) getting to a deficit of 3% is easy-peasy-lemon-squeezy (children's TV presenter-speak intentional, in order to underline the juvenile nature of the thinking in AFFI): all you do is reduce spending until it's no more than three-hundredths above income.

    Outside AFFI, where Mean Mister Reality is in charge, the fairydust doesn't work.

    In the real world, spending and income are related.

    Income (from taxes) is directly related to the economy, which is often measured by GNP or GDP.

    Not just a one-to-one relationship either. It multiplies. If you cut state spending by, say, €5bn, the economy (whether you measure by GDP or GNP) shrinks by between €7bn and €10bn.

    We've seen copious proof of this phenomenon. I offer you for your perusal the economies of Spain, Portugal and Greece. The evidence is overwhelming: cutting your way to a lower deficit is simply impossible. (There might be an exception if the western world was booming, but it isn't and definitely won't at any point before 2016).
    Then why has the Irish deficit fallen from €20bn to €13bn through austerity?

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    Quote Originally Posted by Dreaded_Estate View Post
    Then why has the Irish deficit fallen from €20bn to €13bn through austerity?
    Because the cuts as actually implemented were not as big as the pro-austerity people wanted. Because the deficit in the first few years was loaded up with huge costs that couldn't be cancelled. The €7bn fall is mostly down to cancelled or dramatically reduced infrastructure projects. Because the cossetted better-off are still buying big-ticket cars and paying VRT on them.

    Tens of thousands of the young jobless have emigrated, thus saving massive amounts of social welfare payments.

    And also, the deficit figures don't include the big whale:

    Over 130,000 households aren't paying their mortgages, although presumably the majority of these enjoy some kind of income, thus providing a hidden deficit not accounted for in the official statistics. Those 130,000 non-payers will somehow have to be paid for in some way. Probably a bailout to the banks in the future. Assume a very lowball figure like €600 a month going unpaid per household (does anyone really think the average is that low?) and that's a billion a year, every year.

    Notwithstanding this, we're still in, or very close to recession.
    When you see the words "Mises" or "Hayek" in someone's post, just ask yourself: do I really want to ban paper money and go back to gold?

    You have to pity the kind of people who buy into conspiracy theories. I find the following to be the saddest words on the internet: "Re: connection between Bilderberg puppet lady gaga and viral outbreak in ukraine "

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    Yes they should. That way people can plan around them and at least they'll know what is coming.
    ''The tattoo has a profound meaning: the superficiality of modern man’s existence.'' - Theodore Dalrymple

    "Any fool can make something complicated. It takes a genius to make it simple." - Woody Guthrie

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    The troika are leaving in ten months, isnt it great.

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    Quote Originally Posted by Johnny Zordan View Post
    The troika are leaving in ten months, isnt it great.
    It would be just wonderful if there were enough mugs out there on the open market to buy Irish Bonds to finance Government current spending!

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    Quote Originally Posted by feargach View Post
    In the real world, spending and income are related.

    Income (from taxes) is directly related to the economy, which is often measured by GNP or GDP.

    Not just a one-to-one relationship either. It multiplies. If you cut state spending by, say, €5bn, the economy (whether you measure by GDP or GNP) shrinks by between €7bn and €10bn.
    How much have we actually cut state spending by?

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    Quote Originally Posted by feargach View Post
    Over 130,000 households aren't paying their mortgages, although presumably the majority of these enjoy some kind of income, thus providing a hidden deficit not accounted for in the official statistics. Those 130,000 non-payers will somehow have to be paid for in some way. Probably a bailout to the banks in the future. Assume a very lowball figure like €600 a month going unpaid per household (does anyone really think the average is that low?) and that's a billion a year, every year.
    Where on earth are you plucking this sort of nonsense from???

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