Dan O'Brien - Claims that bank debt is source of all woes untrue

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This is a point that has been made on these forums before.

I think the above article strikes a correct balance in terms of putting banking debt in the context of our more immediate problem - Non-banking debt!

It is unlikely, but debatable, that we could have avoided a bail out in the absence of taking on the €40bn+ banking debts.

What is not debatable at all is that the austerity plans would have been implemented at the same pace - closing the primary deficit is non-negotiable.

Hi Kaiser

I saw that piece from Dan O'Brien yesterday.

I raised this question about a year ago.

How much of our debt is due to the bank bailout?

If you include in our debt the unfunded public service pensions, the percentage falls further still.

This bit is really frightening.

If all public debt disappeared overnight and not one cent of interest had to be paid, the State would still need to borrow about €10 billion annually to meet existing spending commitments. (If the State ends up defaulting – and it may well come to that – the short-term impact would be much reduced if there were no primary deficit. For that reason, it is imperative that the primary deficit be closed as quickly as possible.)

Click to expand...

DerKaiser said:

What is not debatable at all is that the austerity plans would have been implemented at the same pace - closing the primary deficit is non-negotiable.

Click to expand...

There is one statement in that article that I think is well worth highlighting:

If all public debt disappeared overnight and not one cent of interest had to be paid, the State would still need to borrow about €10 billion annually to meet existing spending commitments.

Even if they are off by say 50% it is still a ridiculous figure, clearly no country could continue like this... Clearly we have a long way to go to get our house in order!