# Irish national debt per person highest in the eu



## Brendan Burgess (19 Oct 2018)




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## Delboy (19 Oct 2018)

Go team Ireland!

EU/ECB/IMF solidarity during the crash (with the Bondholders) helped get us to the top. The main thing that jumps out at me from that is Belgium...how did they get there


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## Brendan Burgess (19 Oct 2018)

Hi Delboy

You mean with the depositors I presume? Guaranteeing retail deposits has added about €30 billion to €40 billion to our national debt. 

We would still be at €164 billion. 

Without it we would be at about €34 billion, still the third highest.

Brendan


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## Firefly (19 Oct 2018)

Over 6bn spent servicing our national debt last year. That builds a lot of houses, or as some would prefer, increases a lot of wages


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## TheBigShort (19 Oct 2018)

The question is, what to do about it? On current economic projections Irelands national debt as a % of GDP/GNI is forecast to fall to 59%/86% by 2021. 

What is the ideal % rates for those indicators? 59% GDP complies with Fiscal pact....im not sure about GNI?


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## Protocol (19 Oct 2018)

What to do about it?

Run a budget surplus, and begin to slowly repay it.


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## TheBigShort (19 Oct 2018)

You could do that but where would you cut spending?
Bearing in mind as @Opus2018 correctly pointed out in another thread, the current account has been running a surplus for a few years now, even with increases in spending.


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## Purple (19 Oct 2018)

The current account is only in surplus due to windfall corporation tax receipts. One way or another that will change over the next 5-10 years. We should not be factoring that in to our current account spending at all.
I'd like to see a balanced budget excluding corporation taxes with all corporation tax receipts coming off our debt. Long term current account commitments should only be made if there is sustainable and stable long term tax receipts to pay for them.


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## TheBigShort (19 Oct 2018)

The current account surplus for 2019 is €5.5bn. Even taking out the €1bn 'windfall' that still leaves €4.5bn surplus. 
So what would the €4.5bn be used for? To pay down national debt?


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## Purple (19 Oct 2018)

The receipts from the Multinationals accounted for 7% of our total tax take this year and 80% of that (5.6% of total) came from 10 companies. I don't consider that sustainable.


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## TheBigShort (19 Oct 2018)

Purple said:


> The receipts from the Multinationals accounted for 7% of our total tax take this year and 80% of that (5.6% of total) came from 10 companies. I don't consider that sustainable.



True. While I dont necessarily disagree with the notion, the practicalities of what you would like to do in the context of the available resources need to be considered.  Effectively it would cancel all capital expenditure on infrastructure or impose higher taxes on everyone.
Or cut current budget to such an extent that an innumerable amount of services would have to be cancelled.
This would drive the economy into recession, if not, depression.


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## Opus2018 (19 Oct 2018)

TheBigShort said:


> The question is, what to do about it? On current economic projections Irelands national debt as a % of GDP/GNI is forecast to fall to 59%/86% by 2021.
> 
> What is the ideal % rates for those indicators? 59% GDP complies with Fiscal pact....im not sure about GNI?



The government wants to get down to 40%-45% for a debt/GDP ratio in the longer term, given our unique circumstances (level of multi nationals etc.).

Regards,

Opus 2018.


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## BilliamD75 (19 Oct 2018)

TheBigShort said:


> The question is, what to do about it? On current economic projections Irelands national debt as a % of GDP/GNI is forecast to fall to 59%/86% by 2021.
> 
> What is the ideal % rates for those indicators? 59% GDP complies with Fiscal pact....im not sure about GNI?


There is very little the government can do about it, its still 200 billion with 6 billion interest, we cannot inflate our way out of the debt as the euro is not our currency  unless the ecb buys all the bonds and creates a euro bond the interest portion will explode when the ecb offloads on maturity, raise taxes to pay for it, more deflation, a sovereign debt crisis will start in Italy and consume the euro maybe


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## Protocol (19 Oct 2018)

TheBigShort said:


> You could do that but where would you cut spending?



I would not cut overall spending, I don't think it's too high.

I would constrain welfare spending by reforming JSA, giving lower increases to SA than SI.

Abolish many tax reliefs.

Increase VAT on unhealthy foods.


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## Sophrosyne (20 Oct 2018)

Protocol said:


> I would constrain welfare spending by reforming JSA, giving lower increases to SA than SI.
> 
> Abolish many tax reliefs.
> 
> Increase VAT on unhealthy foods.



This is a bit vague.


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## cremeegg (20 Oct 2018)

BilliamD75 said:


> we cannot inflate our way out of the debt



This is the important point. Everything else is just chat. 

We are spending today our income in the future. 

Who knows how we will live then. 

To put it in perspective we are like a house hold with a €55k income and a €200k mortgage paying €6k interest only. Which is bad but not impossible but what will we do when the next recession bites. Our spending will go up our income go down and interest rates who knows. 


The old argument that states are not like households has less merit today due to the absence of inflation. If it ever had any merit.


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## TheBigShort (20 Oct 2018)

cremeegg said:


> The old argument that states are not like households has less merit today due to the absence of inflation



State accounts are not like household accounts, it is a mistake to compare each other. A household typically has a limited lifespan in which to repay debt. A State lifespan is undefined and not set. Unlike a household, a State can borrow any number of 'mortgages' it sees fit as long lenders are willing to lend. So after first year of repayments, a State can replace old debt thst has been paid down with new debt, simply rolling over the debt. 

I agree we cannot use the currency to inflate our way out of debt but there is more than one way to skin a cat.

Paying down debt now while interest rates are so low is not economically wise and certainly not politically possible. 
If the government took money out of the economy now to pay down debt, this just reduces growth, cuts services, increases taxes. All that would happen is that the government would be kicked out and the next administration will simply borrow back up to levels we are at now again. 

The important thing about the national debt is the interest we pay on it and the rate at which it is increasing. Currently interest rates are low and the rate at which borrowings are made is well below the economic growth of the country. This is sustainable borrowing as long as the money is spent to effective use.


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## BilliamD75 (20 Oct 2018)

It's not the government who produces growth, taxes are deflationary in economic terms,paying down debt when the rate is low is always the best option its very hard to pay it down when rates are higher, we have massive economic growth and are still borrowing for day to day expenditure, however you are very right the economic growth rate is greater than the interest rate thus making it easier to service at the moment, however that will change when the business cycle turns, its amazing the interest payments will be greater than the government's 2040 plan over the next two decades and nobody says anything about it


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## TheBigShort (20 Oct 2018)

BilliamD75 said:


> taxes are deflationary in economic terms,paying down debt when the rate is low is always the best option its very hard to pay it down when rates are higher,



Its this compulsive notion of paying down the debt that is peculiar. The sentiment seems to be pay down debt now while the economy is growing (meaning further pressure on public services and continuing high taxes on incomes - so who is benefiting in that type of economy?).
When economies grow, living standards should improve, otherwise what is the point?



BilliamD75 said:


> we have massive economic growth and are still borrowing for day to day expenditur



We aren't. The current expenditure account is running at a surplus of €5.5bn. The overall budget deficit is on account of capital expenditure programs amounting to €7bn. This is critical for the sustainability of a growing economy that needs new roads, schools, houses, hospitals etc.
The small deficit is less than growth rate of the economy and the capital spend should ensure we can cope with increasing demands on capacity (if spent effectively). 

We could have decided to pay down the debt by using the current account surplus of €5.5bn to the detriment of capital spending, but what would that do? It would reduce the national debt by what? 2.5%, saving €120m in interest payments?
In the meantime, vital infrastructure requirements are suspended, economic activity starts to slow, unemployment increases, future revenues begin to fall, the dysfunction in the housing market gets worse, etc...etc...The government gets voted out and a new administration goes on a spending splurge to kick start the economy borrowing amounts at higher interest rates than they could have got had they not deflated the economy.

The critical thing in all of this is that the rate of borrowing is less than the growth rate of the economy, which it is.


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## BilliamD75 (20 Oct 2018)

There is nothing compulsive about it, for a balanced opinion in e economic terms the government is still borrowing weather its one million or one billion, let's take capital expenditure, there are maybe 40, 50 cranes in Dublin mostly American capital projects there is a shortage of trades people and the government decide to build a children's hospital in this part of the business cycle costing more money, its like poring petrol on a fire because its a liquid, who is benefiting from all of this, well of course the over paid and bloated civil service including there golden handshakes and there pensions, take one example the justice minister wants 21000 gardai, who is going to pay for this  the private sector, more deflation, it would be better if the extra recruits would work in the private sector instead, another the socialists I am in titled to it croud , the social protection budget is most likely or more than it was in 2011 and we are close to full employment,you can roll over the debt but interest rates are on the rise and its going to cost the private productive sector more money to service, yes the interest is less than the growth rate but that's going to rise, why, Q. E will stop in the next twelve months and interest rates will rise, my point is governments should not be allowed to borrow money, there are other options to finance capital projects, there was a time in the business cycle to run budget surpluses and that time has come instead of giving it away to non productive worker's In the economy


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## TheBigShort (20 Oct 2018)

BilliamD75 said:


> There is nothing compulsive about it,





BilliamD75 said:


> my point is governments should not be allowed to borrow money,



With respect, it sounds like a compulsion to me.



BilliamD75 said:


> let's take capital expenditure, there are maybe 40, 50 cranes in Dublin mostly American capital projects there is a shortage of trades people and the government decide to build a children's hospital in this part of the business cycle costing more money, its like poring petrol on a fire because its a liquid,



With respect that makes no sense to me. Either we need a children's hospital or we dont. If, through our democratic institutions it has been sanctioned and approved that we need a new children's hospital, then we should build a new children's hospital. 
It is up to private capital projects to decide if they invest or not. The needs of society should not be unduly delayed or cancelled because of private business interests (unless one of those projects is another Krispy Kreme outlet of course - cant be doing without that )
In all seriousness however, I would be interested in knowing in what part of the economic cycle you do think a children's hospital could or should be built? Take a fifteen year timeframe, 2002-2017, as guide.


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## BilliamD75 (20 Oct 2018)

From an economic point of view the hospital could have been built in a recessionary period being 2011 to 2013 when there were no cranes in Dublin and there was an Abundance of trades available, this kind of time frame for capital projects aids the economy from being a depression to A recession


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## TheBigShort (20 Oct 2018)

I agree in general terms, but from 2011 to 2013 debt to gdp was 110%+. We were in a bailout program. We had no spare capacity to borrow with Irish bond yields at 12%. It doesn't make sense to me that it would have been ok to borrow to build a hospital then, but its not ok to borrow now (relatively small amounts) when the debt is 68% ,projected to decrease further, and bond yields at 1%.


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## BilliamD75 (20 Oct 2018)

Here in lies the situation with government, we could borrow vast sums of money during this period for civil service and social protection, up to 2007 we had very little public debt, the government used the stamp duty on properties for benchmarking and paying down debt,now its using corporation tax for increases again civil service and social protection, don't forget at the time we had a lot of money in the pension fund which could have been used differently, the situation always arise with career politicians, they need re election and decisions are by and large never in the national interest,


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## TheBigShort (20 Oct 2018)

Im sorry, but its hard to keep up. You are flip-flopping from paying down government debt, to the cost of a hospital for children, to public sector benchmarking.

Can you confirm that you think the State should have borrowed more funds during 2011-2013 to build the children's hospital?

If yes, I think that just contradicts the position that you appear to espouse.

If no, then I ask the question again.
In what part of the economic cycle, using a timeframe of 2002-2017, would you think a children's hospital could or should have built, if at all?


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## Sophrosyne (21 Oct 2018)

BilliamD75 said:


> Here in lies the situation with government, we could borrow vast sums of money during this period for civil service and social protection, up to 2007 we had very little public debt, the government used the stamp duty on properties for benchmarking and paying down debt,now its using corporation tax for increases again civil service and social protection, don't forget at the time we had a lot of money in the pension fund which could have been used differently, the situation always arise with career politicians, they need re election and decisions are by and large never in the national interest,



You need to back up what you are claiming with links to statistical evidence.


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## BilliamD75 (21 Oct 2018)

There is no flip flopping what so ever, you asked a question when should we build a hospital, I said in 2011 to 2013 when there was a large availability of trades which would cost less than today savings money, this is self explanatory,whether they build the hospital are not the issue, have already said the state should never be allowed borrow money, I also said it is better to pay down debt when rates are low as to when rates are higher again this is self explanatory, the government waste tax payers money needlessly, if it was a business it would be bankrupt in a year, the statistics are all there if you look for them yourselfes, hope this clears things up for you


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## Markel (21 Oct 2018)

BilliamD75 said:


> ...if it was a business it would be bankrupt in a year...



It's not a business though... Ireland is a sovereign state that can raise taxation over multiple generations and indeed can indefinitely refinance debt.


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## cremeegg (21 Oct 2018)

TheBigShort said:


> So after first year of repayments, a State can replace old debt thst has been paid down with new debt, simply rolling over the debt.



Over the foreseeable future that will be at a higher interest rate.




TheBigShort said:


> If the government took money out of the economy now to pay down debt, this just reduces growth,



Quite probably what the Irish economy needs at present.



TheBigShort said:


> All that would happen (if the govt paid down debt) is that the government would be kicked out and the next administration will simply borrow back up to levels we are at now again.



You are probably right here. That does not make it wise however.



TheBigShort said:


> The important thing about the national debt is the interest we pay on it and the rate at which it is increasing.



Yes, and both are increasing.




TheBigShort said:


> the rate at which borrowings are made is well below the economic growth of the country.



"well below" The average rate on borrowings is approx 3%. €6bn interest on €200bn debt. I have some hope that economic growth is well above this, at present. Looking forward interest rates are going up. No one knows where economic growth rates are going. We could well be locking ourselves into a situation where interest rates exceed growth rates.



TheBigShort said:


> This is sustainable borrowing as long as the money is spent to effective use.


Unfortunately the need to get votes and effective use of public money are rarely compatible.


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## TheBigShort (21 Oct 2018)

BilliamD75 said:


> said in 2011 to 2013 when there was a large availability of trades which would cost less than today savings money, this is self explanatory



Its true that wage rates had fallen, but that was because capital investment had crashed, credit crunch, State bankruptcy etc...in other words, there was no money (or very little) to pay for the cost of a children's hospital.  If the State was borrowing funds to build the hospital it would have been doing so at high interest rates, costing a lot more than it would cost today.



BilliamD75 said:


> have already said the state should never be allowed borrow money,



Ok, that is your view. I think it would be economic suicide for the State not to be allowed to borrow funds.



BilliamD75 said:


> I also said it is better to pay down debt when rates are low as to when rates are higher



Yes you did. And I explained that paying down debt would achieve very little. If the government wasn't allowed to borrow as you propose, and if it were to pay down debt with surplus budget then we would be taking €5.5bn out of the economy next year (this is the net surplus in the current account). This would save about €120m in interest repayments.
 It would also eliminate all capital expenditure, reduce economic activity, increase unemployment, reduce revenues and send the economy into a recession, if not a depression.
The State would be forced to borrow (whether you would like it or not) but at interest rates far higher than it is borrowing today.



BilliamD75 said:


> the government waste tax payers money needlessly, if it was a business it would be bankrupt in a year,



Its not a business. It is a mistake to compare national accounts with the accounts of a business or a household.


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## TheBigShort (21 Oct 2018)

cremeegg said:


> Over the foreseeable future that will be at a higher interest rate.



Irish 10yr bond yields are currently at around 1%. This is reducing the average rate.



cremeegg said:


> Quite probably what the Irish economy needs at present.



On what basis? In what sector would you reduce spending? The Social protection budget has increased by €361m. Not an insignificant amount but on a €200bn debt it would barely register a ripple. All that would happen if you used this money to pay down debt is that you would take this money out of the economy. Why?
I think some are failing to factor in that all this money does is stimulate economic activity, in turn increasing employment, increasing revenues back to the State.
Of course it is not something that is without risk and needs to be managed, but currently that risk is measured by the interest rate charged on new borrowing, which is very little. There is little indication of the economy "overheating". There are structural defects, such as housing and shortage of workers in certain trades, but they wont be resolved by paying down debt and taking money out of the economy. They will only be resolved through further investment.



cremeegg said:


> You are probably right here. That does not make it wise however.



It does actually. As stated, if the government was not to borrow and instead use current account surplus to pay down debt it would send the economy into recession, increasing unemployment, reducing revenues etc. It would be forced to borrow, but at rates that would be a lot higher than today.



cremeegg said:


> Yes, and both are increasing.



Relative to the growth in the economy, overall debt is reducing.



cremeegg said:


> The average rate on borrowings is approx 3%. €6bn interest on €200bn debt.



Yes, and borrowing at 1% is bringing that average down.


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## BilliamD75 (21 Oct 2018)

The government can borrow at 1% because the ecb(lender of last resort) are buying the debt, thats going to change, yes we are a sovereign state but we cannot borrow indefinitely, we will have the imf back again, and we must remember we can go bankrupt just like a business especially since we do not have our own currency,


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## TheBigShort (21 Oct 2018)

I agree re end of QE. But not necessarily that we will be back in IMF.
This is how I view things. I don't think it is reasonable to simply look at State debt in isolation. The reality is private debt is 406% of gdp. Household debt to income is also 147%. Combine all of the debt and it is equal to around three times the value of gdp.

So what to do? If government cuts spending to pay down debt it deflates the economy putting pressure on services  and households come under further pressure. Households are, thankfully, paying down debt but if government spending was cut, or taxes increased that would change.
Corporate debt is massive also.

So what to do?

The only thing I can think of is to introduce inflationary policies into the economy that will drive up prices and wage demands. I think this budget is attempting to do this. I think also that policies emerging from US, UK and elsewhere are also pointing to inflation, also pointing to wage increases.


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## cremeegg (21 Oct 2018)

Ireland as a member of the Eurozone, cannot unilaterally increase inflation without destroying competitiveness.


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## TheBigShort (21 Oct 2018)

cremeegg said:


> Ireland as a member of the Eurozone, cannot unilaterally increase inflation without destroying competitiveness.



Agreed. That is why its useful to know that major economies of the eurozone government spending in on the increase and reaching record highs in some instances.

Germany
https://tradingeconomics.com/germany/government-spending

France
https://tradingeconomics.com/france/government-spending

Netherlands
https://tradingeconomics.com/netherlands/government-spending

Italy
https://tradingeconomics.com/italy/government-spending

Spain
https://tradingeconomics.com/spain/government-spending


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## BilliamD75 (22 Oct 2018)

I agree also, it's a part of the whole issue, it's just the size of the debt, 200 billion for less than 5 million citizens, a little example if I may, this is just for example purposes only, 200 billion, the ecb is mandated to buy up to 40% of government bonds say 80 billion at interest one billion (one %,) the other 120 billion in the private sector interest 5 billion, now interest rates are at historical low rates (negative ) when they rise and they will soon in small steps at first say to 4% which is not very high as we have seen them before, the private sector will want a yield above this say 7% just for risk purposes and the ecb offloads its balance sheet and it will the interest will be say 14 billion, the interest rate will be greater than the growth rate as the economy is at near full capacity, the bond market will deem Irish debt a higher risk and demand a higher premium, this starts slowly but accelerates very quickly causing a default (maybe ) this is why rolling over debt is not an option this time, its just to large and the ecb has us on life support which is going to be switched off, (Italian bonds are around 3%and rising) I hope this helps to understand my thinking


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## Purple (22 Oct 2018)

Markel said:


> It's not a business though... Ireland is a sovereign state that can raise taxation over multiple generations and indeed can indefinitely refinance debt.


Except every country is doing the same thing as every citizen in the developed world wants to live beyond their means. 
I'm no economist but I don't see it all ending well.


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## Purple (22 Oct 2018)

The Irish economy is running a high risk of overheating at the moment.

The last thing we should be doing is borrowing money to put more fuel on the fire. We should also not be cutting taxes or increasing welfare rates, particularly for asset and cash rich pensioners.


A country is not like a household; the analogy is too simple and so falls down. A country does need to conform to some basic economic and accountancy norms though and while political expedience (populism) is important in order to keep the other guys out of office reality should not be ignored.


Saying that the current budget is in surplus and that we are only borrowing for the capital budget is just window dressing. We could just as easily present it the other way around.

If we want house price moderation and if we want sustainable growth we need to take some fuel off the fire. Capital spending is necessary at the moment but as that spending takes place within the economy it is inflationary. We should have more of it but it should be done within the context of an overall budget which is balanced.  


I would fund capital spending increases by not increasing any Welfare payments, removing many welfare payments for middle and higher income households, making all welfare payments taxable and putting a cap on the total welfare payments per household as well as looking at reduced spending in public services through more restructuring and shared services. That would result in a headcount reduction (through natural wastage, not redundancy). That reduction could be split 50:50 between reduced overall numbers and more “front line” staff. It’s small gains but over a 5-10 year period it would be significant.  There’s no need for big confrontations so a better buy-in from Public Sector Unions would be helpful. They need to accept that increases in productivity should not be tied to wage increases as better Public Services benefit their members as well.


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## TheBigShort (22 Oct 2018)

I don't necessarily disagree with any of the above.
But the issue being raised by some is to run a budget surplus in order to pay down the debt. Running a balanced budget is all fine and I agree that is the financially prudent thing to do.
I accept that there is a deficit being run in budget 2019, but as it is relatively small in the context of the overall debt and in relation to the overall growth in the economy I would not consider budget 2019 as tipping point, or a significant contributory factor if the economy were to crash again - that damage has already been done. Too much public and private debt.
Its how we steer a ship that has already taken on too much water to dry land for repairs so that it can sail again.
Do we put all our energy into paying down the debt, only to end up taking on more debt to plug all the holes?
Or do we drive the economy forward to a point that the debt is beginning to diminish?
I would suggest the latter. Its not without risks, but balanced budgets or, budgets with small deficits relative to the growth in the economy are the way to go.
Paying down the debt is futile. Bringing the debt to a point where it is manageable is the key. To do this our economy, along with economies of developed world, need to inflate. But as borrowing limits in both private and public sectors are stretched to outer limits, more borrowing is not going to cut it.
Incomes need to rise, raising prices and wages to sustain those price increases and spending and grow economies. More robust legislation is required than simply raising the minimum wage.


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## Purple (22 Oct 2018)

If inflation goes up then so do interest rates.
Be careful what you wish for.


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## Protocol (22 Oct 2018)

The ECB has done a fairly good job of anchoring inflation expectations at around 2%.

Actual inflation in Ireland has been below 2% for much of the last few years, as the weaker GBP has helped keep a lid on imported goods prices.

The price level in Ireland is already 125% of the EU average.

*We do not need higher prices here*, they are too high already.

Rents, legal fees, medical fees, insurance, energy prices, etc. are all too high already.

We need reforms like more competition, legal reforms, that will drive down these costs.

We need slow and steady rises in wages, based on productivity, combined with falls in the costs of overheads, like those listed above.

This of course means a fall in the excessive profits earned in these sectors.


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## Protocol (22 Oct 2018)

TheBigShort said:


> Paying down the debt is futile. Bringing the debt to a point where it is manageable is the key.



Running a small budget surplus, not running a deficit, and not adding more debt, makes the debt more manageable.

Say 1% of GDP, approx 2-3bn.

It will also reduce our interest costs.


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## BilliamD75 (22 Oct 2018)

Hi protocol you might be talking about demand inflation which is very high in Ireland but so is asset inflation however the real issue in Ireland is currency deflation which is the real issue, people in the private sector have to work harder for less while assets like property are out of reach, inflation in these say asset, demand and currency should rise in tandom but we do not own the currency, for those of us that remember it used to be two deutsch marks for a punt now its equilibrium, who gains. I would be interested in knowing how the ecb anchors inflation


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## BilliamD75 (21 Nov 2018)

The ntma has come out today and stated that Irish debt will be more expensive in 2019 because of brexit (good one that) and the EU has rejected the Italian budget, bond yields are going to rise, slowly at first and excelerate, who is going to pay for this?


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## Purple (26 Nov 2018)

BilliamD75 said:


> The ntma has come out today and stated that Irish debt will be more expensive in 2019 because of brexit (good one that) and the EU has rejected the Italian budget, bond yields are going to rise, slowly at first and excelerate, who is going to pay for this?


The same small group that pays for everything else.


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## BilliamD75 (26 Nov 2018)

Not this time, it will consume all the income tax receipts going forward


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## joe sod (9 Sep 2021)

I see that throughout the pandemic the ECB were the main buyers of our debt, they bought 70% of the bonds issued by the Irish treasury. This is interesting in that Irish bonds still offer a positive interest rate yet private investors would rather buy German or Dutch ones even at negative interest rates. We would be paying much higher interest rates except for the ECB.


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## RedOnion (9 Sep 2021)

joe sod said:


> This is interesting in that Irish bonds still offer a positive interest rate yet private investors would rather buy German or Dutch ones even at negative interest rates.


Don't confuse coupon and yield.


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## Protocol (9 Sep 2021)

joe sod said:


> I see that throughout the pandemic the ECB were the main buyers of our debt, they bought 70% of the bonds issued by the Irish treasury. This is interesting in that Irish bonds still offer a positive interest rate yet private investors would rather buy German or Dutch ones even at negative interest rates. We would be paying much higher interest rates except for the ECB.


*








						NTMA raises €1.25 billion in double bond auction
					

The National Treasury Management Agency said it sold €1.25 billion of 10 and 20 year bonds in a dual auction today.




					www.rte.ie
				



*

The National Treasury Management Agency said it sold €1.25 billion of 10 and 20 year bonds in a dual auction today.

The auction was at the top end of the NTMA's €1 billion to €1.25 billion range.

The NTMA has now raised €16 billion of its €18-20 billion target for the year.

*The 10 year bond was sold at a yield of 0.02% and the 20 year bond at a yield of 0.55%.*

Offers for both bonds were oversubscribed.



Irish bonds have positive yields, yes, but very low positive yields.

Irish bond yields are higher than DE and NL yields, yes, as expected.


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## NoRegretsCoyote (9 Sep 2021)

Protocol said:


> Offers for both bonds were oversubscribed.


Indeed, but not least because the ECB can absorb up to 33% of outstanding issuance on the secondary market.


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## joe sod (9 Sep 2021)

ECB holds 70pc of bond debt Ireland raised during the pandemic
					

More than 70pc of the Government’s substantial borrowing since the beginning of the pandemic has has ended up owed to the European Central Bank, the chief executive of the National Treasury Management Agency (NTMA) has revealed.




					www.independent.ie
				






Protocol said:


> Irish bonds have positive yields, yes, but very low positive yields.
> 
> Irish bond yields are higher than DE and NL yields, yes, as expected.


But you are not denying that the reason Irish bond yields are so low is because the ECB has bought 70% of our pandemic debt as per the independent article I posted, surely that is exceptional


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## RedOnion (9 Sep 2021)

joe sod said:


> ECB holds 70pc of bond debt Ireland raised during the pandemic
> 
> 
> More than 70pc of the Government’s substantial borrowing since the beginning of the pandemic has has ended up owed to the European Central Bank, the chief executive of the National Treasury Management Agency (NTMA) has revealed.
> ...


You realise the ECB are also buying German bonds?

As are end of August, they hold 618bn German bonds, and 40bn Irish.
In the month of August, their net purchase of German was 3.9bn, and Irish 0.2bn.

So, by the same logic, German bonds yields are low because of ECB purchases.

I don't think anyone can deny that Eur yields are low across the board because of ECB policy.


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## joe sod (9 Sep 2021)

@RedOnion yes I know they buy bonds of all the euro countries, they also hold gold, that's more to do with stabilizing the currency than anything else, if they were only to buy Irish , Italian and Greek bonds the euro would be in freefall and we would have run away inflation, the German economy is the whole basis for the relative stability of the currency.


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## RedOnion (9 Sep 2021)

@joe sod 
I've obviously missed your point completely.  What was it?


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