What sort of four-year plan?

While there has been much comment about the four-year fiscal plan since the government announced it last month, it is still not clear what sort of plan they have in mind.  At one end of spectrum (the relatively useless end) would be new targets for current spending, capital spending and tax revenues, with possibly a listing of realistic options for achieving those targets.   At the other end of the spectrum would be a true multi-year budget, with detailed phased measures that are legislated where possible. 

The governments statement yesterday hardly suggests that a proper multi-year budget is what they have in mind:

The purpose of the Four Year Plan for Budgets and Economic Growth is to chart a credible way forward for this country. The size of the adjustment for 2011 and the distribution over the remaining years will be announced in the Four Year Plan. The Plan will contain targets for growth and strategies for the achievement of those targets.

When exactly did the four-year plan become a plan for economic growth?   While returning the economy to growth is a critical part of the overall challenge, the four-year plan had a specific and urgent goal: to convince potential buyers of Irish debt that Ireland could lower its borrowing requirement sufficiently to avoid a bailout or default.   Of course, decent economic growth will make this challenge easier, but I cant see how the year-by-year, sector-by-sector fiscal plan expected by the EU Commission is the place for growth targets and strategies.  We have to worry that the targets and strategies are filler to distract from the paucity of the fiscal plan itself. 

Minister Lenihan also confirmed yesterday a nominal cumulative deficit adjustment target of €15 billion by 2014.  The debate has now switched to how much to frontload this adjustment in 2011.   Of course, the necessary front-loading depends on the credibility of the overall plan.   The more investors have doubts that we can make good on our promises, the more they will need to see the money taken out up front that is, the more the adjustment must be inefficiently concentrated at the time when our anticipated output and employment gaps are at their largest.   Having to frontload because the government (and opposition) cant or wont deliver a true multi-year plan would be a serious policy failure. 

55 thoughts on “What sort of four-year plan?”

  1. The 4 year plan isn’t about bondmarkets. It’s about neutralising the budget as an election issue. By bringing in the opposition to observe the budget preparations, they hope to avoid having to be compared to them in the upcoming election on budgetary issues.

    I doubt if there will be excessive frontloading in this budget. Michael Noonan may have come out of Govt. Buildings shouting about the need for 7bn in cuts, but no government anywhere will artificially accelerate cuts prior to an election. They will still have to cut of course, but they won’t be going for a big bang adjustment before heading into a poll.

  2. @John McHale,

    The Government will have to pad the plan out with BS and aspirations to convey the impression that it is still in charge, but the man from the EC, Olli Rehn, will show who is really in charge next month and will tell it as it is. The only hope is that the EC/ECB have a game plan to square the markets so as to allow the NTMA to re-enter. It is as much in their interests as in ours that they have a plan and that it has better than evens chance of working. In fact, I think it is more in their interests than in ours.

    There will obviously be a lot of noise about GDP projections, but the Government will have to recognise that the blunt tool of fiscal adjustment may not work as it might expect – and Irish macroeconomists may have to go back to the microtheoretic foundations of their models.

    Parts of the economy in the tradable sectors are probably doing OK, but many other sectors are in shut-down mode as a result of general deleveraging, absence of demand – or prospect of demand – and limited or costly credit. Others are in denial and operating in “what we have we hold” mode – and imposing burdens on everyone else. (For example the ESB cut up rough when the CER proposed network revenues for the next five years based on a cost of capital of 5% – it needs the extra dosh from consumers to finance the acquisition of the NI networks, you see – and has forced the CER to up the rate to 5.95%. The result is additional deadweight costs on consumers and the economy on top of the extra costs Minister Ryan is imposing in pursuit of his inefficient and costly green policies.)

    There is no shortage of similar examples, but an extremely weakened government – struggling to implement an externally-imposed fiscal plan – is in no position to address these fundamental issues.

  3. @ john
    “Having to front–load because the government (and opposition) can’t or won’t deliver a true multi-year plan would be a serious policy failure.”
    But that is only possible if the government are going to be around for 4 years.
    You are in effect making a heck of a good case for a general election.
    i.e. if there is a new government with a full term they can draw up a 4 year plan that is more balanced over the full 4 years.

  4. @Eamonn,

    There are incontrovertible democratic, moral, political and economic grounds -even possibly constitutional grounds – for having a general election, but the Government can’t be deflected from its strategy to save the country. And the man from the EU is coming – and you wouldn’t want to upset him.

  5. The term ‘growth’ occurs several times in the Gov statement. There was also a mention of an IMF ‘forecast’.

    Question: How are these ‘growth forecasts’ arrived at? Historical data? Current data? Which data? If anyone has some ref sources I would be grateful.

    I have formed the opinion that the ‘growth forecasts’ are a tad optimistic: I would put even money on 0%! – the actual outcome value that is, as opposed to some statistical spun value.

    @PH: “Irish macroeconomists may have to go back to the microtheoretic foundations of their models.”

    Paul, methinks its the location where they, (the macro chaps), have located their foundations that may be the problem! Hope I wrong about this.

    The models are Known (sic) to model the reality of virtual, rational robots – so real reality which is populated by real folk, and thus a tad quirky, has to be shoe-horned!

    “In fact, I think it is more in their (EC/ECB) interests than in ours.” Yep! Why is this so opaque to so many?

    Brian P

  6. I would suggest to Ollie that he starts the 4 year plan with a 6 month suspension of ECB being the lender of last resort to Ireland, with automatic limited reactivation only if agreed targets are met.

  7. IF the overall money supply contracts for the next decade or so – growth as we know it will be a dream.
    I do not think we can pay our debt but for what its worth we have to concentrate on reducing spare capacity and increasing efficiencies if we want to prolong the agony.
    A report recently stated it costs 100+ extra to live in rural areas.
    Yet we have prime empty apartments in central areas that could accommodate workers (if work is available) who would not need a car to commute.
    We cannot pay our external debt effeciently if policies designed to protect banks balance sheets prevent the largest efficiencies in the system.
    The development during the boom was not all bad – but if we neglect the bits of the capital base that was sustainable to keep the entire sub rural / sub urban complex alive we will not last very long.

  8. I think Eamonn is right John: the more detail goes into a four-year plan, the more important it is to have a new government in place to develop and deliver that plan. I don’t think it is credible to believe that FG, Labour or SF would stick to the fine detail of a plan developed by the current government.

  9. What plan? We are nearly 3 years down the track on this and now its a four year plan?!

    Nothing has really changed given that we still need to borrow to sustain the illusion that our economy is the “size” it currently is. We need a one off permanent adjustment to bring economic reality to the financial situation that pertains.

    The sooner we do it the sooner we will have certainty. Perhaps after a further period of pain we will see some real, not imagined, growth in the economy.

    Until this happens we will still be in dreamland. Thankfully the EU are now realising this and are delivering a few well timed and well aimed kicks in our direction.

  10. Eamonn/Paul/Kevin

    An election and a clear mandate would be best. But its not going to happen in time.

    We are thus in the world of the political second best. I hoped vainly for some limited cooperation. But alas.

    So now the government with little cover look like they will produce a plan that falls far short of what is needed. To make up for that there will have to be a 2011 adjustment that will probably have to close to €7 billion.

    I actually think the government can legislate for changes that take effect beyond their expected time horizon. The next government could always undo the changes. But the new situation becomes the default. The new government is likely to be glad the forward looking changes were already legislated, and thus likely to leave them in place. The changes thus gain credibility compared to vague promises that any new government might not view as binding.

  11. @John McHale,

    Sadly, you’re probably right. But my view is that ‘political second best’ is just not good enough. This is particularly the case when one considers the damage these fiscal adjustments will cause when their impact is transmitted thoughout the economy by the way key unrestructured, uncompetitive and inefficient sectors are reacting and will react. The issue is not so much the actual top-level fiscal adjustments – although they will be severe, but the way certain sectors will be able to protect themselves from the full impact and to continue to deflect the burden on to the more productive sectors and on to those who are least equipped to cope.

    An administration that, via a variety of mutations, has been in power for 13 years and that has pandered to these sectors throughout that time should not be allowed to even contemplate devising a programme of fiscal adjustment of this nature.

  12. The front loading will keep people out of work for longer and turn the long term unemployed into long term unemployable.

  13. I think there is a decent possibility that the government will fall before the end of the year. The coalition is down to 2 independents and if they switch sides the game is up. There are a lot of FF backbenchers who don’t know what is coming and are not going to be able to sell the level of cuts needed to their JoeDuffy listening constituents. The 2 independent TDs are 2 relics of a bygone era- Healy Rae and Lowry. Corrupt kettle say hello to dodgy pot. FF have already lost the support of ex PD Grealish over health budgets. He won’t be the last. If there is an insistence on retaining Pairc an Chrocaigh the cuts will take huge chunks out of the remaining 30% of the health budget. €15bn is 20% of all govt spending – do the FF backbenchers get this ? how will they react? Does Biffo have any credibility left? Will the whips be able to keep smacht on them ?
    2 of the words of the moment are front line and front load. The front load is going to hammer the front line. Are the punters ready for it? I don’t think so.

  14. @John: at the heart of democratic politics is the question of the size of the state, the level of taxation, etc. Obviously we are going to have to increase taxes AND cut expenditure, but how much of the adjustment takes one form or another isn’t something that we can assume parties will agree on going forward, since it is the subject of legitimate political debate. It certainly will be the subject of considerable debate at the next general election, which is both inevitable and — in a democracy — desirable. So, I think if the current government lays out a detailed plan and asks markets to believe that this is the plan that will be followed ex post, the markets will decline to believe the government.

  15. @Paul Hunt
    “The issue is not so much the actual top-level fiscal adjustments – although they will be severe, but the way certain sectors will be able to protect themselves from the full impact and to continue to deflect the burden on to the more productive sectors and on to those who are least equipped to cope.”

    Spot on.

  16. This issue brings home to me how little we have invested in microeconomic policy design and implementation. The size and magnitude of the budget plan, the whole ‘what we need to do’ stuff, is well debated and I accept. The thing that scares me is the implementation. The bluntness of the implementation; the ignorance to the fact that cuts may raise costs, not reduce them, in the medium term; and the lack of a guiding framework in key areas such as labour market policy against which the fiscal adjustment can take place – all of this is pretty scary. It does feel like we will just cut, close our eyes, and hope for the best.

    The point was brought home to me during the coverage of the UK package. Seeing the distributional, factual and focused analysis by IFS going toe-to-toe with the Treasury made me weep for how we lack that depth of thinking here (which comes back to John’s original point). By the way, one reason is that we lack the data…..something which badly needs to be addressed.

  17. @Seafoid
    Ex PD Grealish rejects health cuts ! – where is his ideological backbone when the chips are down ?
    I guess the PDs were infested with Tom Parlon like figures who did not even know what they stood for or indeed cared.
    Take the trough away and they are but rednecks without soul.
    Its a bitch for amadan monetarists when they are deprived of credit to fullfill their crazy dreams but somehow strangly satisfying in a world without colour.

  18. @Keith

    I checked out the total budget for the Indian state of Maharashtra, population > 100million. €5.5bn

    The health budget for the West of Ireland, population 0.5 million is €2bn.

  19. Indeed, Cowboys are more expensive then Indians – but what is the life expectancy in that Indian state ?

  20. Indeed, Cowboys are more expensive then Indians – but what is the life expectancy in that Indian state ?

  21. Indeed, Cowboys are more expensive then Indians – but what is the life expectancy in that Indian state ?

  22. @seafoid
    “2 of the words of the moment are front line and front load. The front load is going to hammer the front line. Are the punters ready for it? I don’t think so.”
    I agree with you. We will get the wrong cuts. I return to my question of the benefit of cutting operations and wards without cutting staff. If we are paying staff not to perform operations, why are we paying them at all? This is not to say that we should be doing either – is there an analysis anywhere of whether it is cheaper to perform operations sooner rather than later? Should we, perhaps, be looking at increasing the amount of operations rather than reducing them? What’s the tradeoff between maintaining someone on pain-killers/preventative care vs. ‘curing’ them?

    Unfortunately, I am not sure that current management and staff in the HSE are capable of delivering those outcomes. The divide between them seems too great. I am unsure as to what the solution to this is. The doing less with less policies serve to continue the problem. The doing the same with more seems to be what has been tried the last few years…

  23. @Kevin 
    I hear what you are saying.   But what about a US-style budgetary PAYGO commitment from the opposition?  More precisely,  the opposition parties signal that if they subsequently change any legislation/target they will replace if with another measure that is deficit neutral.   I don’t think this would be a big ask given that they have already agreed to the 3 percent by 2014 target.   Moreover, I still believe that they are likely to leave legislated measures in place, so these measures do gain added credibility.   The important point that they are free to enact any policies they wish, so I don’t see it as anti-democratic.   I think it gives us the best shot at the credible plan absent an election and absent any more extensive cooperation.  

    @Colm 
    I had the same thought reading through the UK’s Spending Review yesterday.   An independent fiscal council would be a good start; possibly also a more formal role for the ESRI.

  24. “The great powers of our time,” the German chancellor Otto von Bismarck told a Russian diplomat in 1879, “are like travellers unknown to each other, whom chance has brought together in a carriage. They watch each other and when one of them puts his hand into his pocket, his neighbour gets ready his own revolver, in order to be able to fire the first shot.”

    Maybe not as dramatic but amidst an economic emergency, the silence of both the vested interests and individuals in areas they know well, as to specific proposals, is striking.

    ICTU has nothing to say on the protected private sector and its rent seeking practices while IBEC is silent on the slow-motion reform in the public sector.

    It appears that nobody wants to upset the bountiful applecart with fingers crossed that the grim reaper will pass them by.

    @ Colm Harmon

    It does feel like we will just cut, close our eyes, and hope for the best.

    Poltroon politicians are not the only ones to blame for the tolerance of low standards, limited accountability and public data.

    These issues can be found in many areas, including for example in the universities and at the state broadcaster RTÉ.

  25. I dont think there is a need to row back from the suggestion that an election is the only way to secure a credible plan.

    The PAYGO idea is interesting and would achieve some credibility in theory but i fear in reality would be regarded as a series of promises with no responsibility to the promiser. What weight would that have?

    The only way to achieve credibility for a four year plan when there is a govt. with maximum 18 months left is to have a new election.

    Its right to be maintain neutrality but neutral or not the short term nature of the govt. and the long term nature of the plan are a concern.

    Saying there must be an election is still a politically neutral thing to do. This is a sovereign debt issue no longer a political one

  26. @Colm Harmon,

    I don’t think the problem is related to the absence of data; it’s really related to resources and demand. Government departments, regulators and other public bodies will pay consultants and even academics to give them the answers that they want. There is no demand for independent, objective analysis. The country is probably too small – and there is an under-developed corporate and civic culture – to provide sufficient funding to support think-tanks such as the UK IFS. There is only so much that may be done on a pro-bono basis – and, in any event, such effort will lack credibility (as I have found).

    In the academic sphere there is probably too much focus on research at the bleeding edge – to maintain university rankings – rather than mixing it with an application of tried and tested research tools to analyse pressing economic problems and policy issues. And, believe me, there are no shortage of these. (It seems that most people have swallowed successive government’s persistent BS during the last decade about “competition and better regulation” and that the banks and property developers losing the run of themselves in the absence of effective bank supervision and financial regulation was a horrible and exceptional abberation – and that competition and regulation are operating just fine in all other sectors. Nothing could be further from the truth; and the impending, severe fiscal adjustments will demonstrate just how dysfunctional much of the microeconomy is.)

    The best source of demand for this kind of independent and objective analysis and research are empowered and resourced Oireachtas Cttees. Forcing governments to present their proposed policies before these Cttees (rather than whipping fully-formed bills through the Oirachtas) and empowering and resourcing these Cttees to retain the expert analysis and advice that would subject these proposals to the necessary scrutiny would lead to better policy and provide a demand for this research and advice.

  27. @ Seafoid

    the independents switching sides and voting the governments is like turkeys voting for Xmas – what purpose do you think they will have in a FG/Labour alliance? Their only purpose was to help out FF in the ricketly coalitions they have had for the last decade. Independents will go back to being more or less an irrelevance, which may not be a bad thing.

  28. @Eoin
    “the independents switching sides and voting the governments is like turkeys voting for Xmas – what purpose do you think they will have in a FG/Labour alliance?”

    They may have no further purpose but they they will still aim to retain their jobs post the election and remaining in coalition is probably a poor strategy for that aim.

  29. @Eoin

    The pull of muppets like Lowry and Healy Rae is still very strong. Did you see the picture of the Healy Rae clan dancing at some bypass in Kerry in the Irish Times on Saturday ?
    I wouldn’t be surprised to see a few FF backbenchers leaving the party over the cuts if they thought it could save their asses at the election. Remember 1982 when Jim Kemmy and Tony Gregory were the deciders. And one of the governments fell over VAT on shoes.

  30. @Wow 
    Just the record, I am not going out of my way to be neutral.   With apologies for stating the obvious, I don’t believe this government will voluntarily give up power.   And they may well be able to hang on through a what is a critical period for the country’s chances of avoiding a bailout/default.   So we have the face the question of how a credible four-year plan could be put in place by the present government given its limited expected time horizon and the limited cooperation that we now know will be forthcoming from the opposition.  I understand why people have doubts that this can be done.   But I don’t think we can just throw our hands in the air.   The stakes are too high.  

    @Paul
    I think you make a very good suggestion for providing some balance to excessive executive power.

  31. The Swedish example as is being followed by the Conservatives in England is to frontload structural adjustments. “Structural” is as much a keyword as “frontloading”. Both are necessary to create confidence.

    Front-loading is not necessary because a four year plan can’t be spelled out but rather because frontloading structural adjustments makes a real difference and therefore creates real credibility as Karl whelan has pointed out. It is action rather than words. It is achievement rather than aspirations.

    No matter what 4 year plan we propose, it will be subject to change. As Brian Lenihan has alluded to, we can look at the 3% again at a later stage. Our task for the moment is to make a credible start towards that goal. Whether or not we reach the goal is another matter. However, if it proves difficult to reach the goal then we may have more wriggle room if we have acted credibly already.

    Apart from all that, frontloading of structural adjustments enjoys intellectual currency with our EU counterparts.

    Frontloading is not a sign of political weakness. It is a concrete effort that evidences our commitment to deal with our fiscal crisis. As Karl Whelan, the Minister and the NTMA have pointed out, the measures taken in the next four months are crucial.

  32. @paul @John

    Indeed both good suggestions for maintaining flexibility to change while permitting the development and implementation of what we need to do immediately.

    I do see the point about our scale perhaps not supporting an IFS, but there could be ways around that – IFS is not a big outfit, the key players are often academics paid by their University. IFS and places like it blend the two domains of ‘bleeding edge’ and academic output beautifully – the best two Econ Department in Europe are UCL and LSE and between the two IFS is provided with most of it’s key leaders. I am working on it!

    My data point though is related to your overall point – whether for scientific application or for policy advising I don’t have the data to assess the current state of household finances, of earnings determination, of education choices, or even public sector pay differerentials in a manner that is consistent with best practices. Put another way, I regrettably write little of what I think is policy relevant academic work on, say, education policy, with Irish data because there is little of it. That is something we can solve and it will allow the sort of analysis that the IFS Folks can do, rapidly and with authority.

  33. John

    this is, I hope fresh terrain, although as Lenin said, everything is connected to everything else. But I want to query this statement,

    “While returning the economy to growth is a critical part of the overall challenge, the four-year plan had a specific and urgent goal: to convince potential buyers of Irish debt that Ireland could lower its borrowing requirement sufficiently to avoid a bailout or default.”

    The urgency is not as great as suggesed.

    According to the presentation from NTMA’s Oliver Whelan kindly provided by Philip Lane there are ‘relatively small amounts of bonds maturing over the next few years’ the next in November 2011 and just €16bn maturing overall by the end of 2013.

    At the same time, NTMA has cash balances of €20bn and the NPRF funds of €24bn. Surely returning to growth over that 3yr period would cast a whole new light on the need for fiscal adjustment, or at least the degree?

  34. I believe the lobby fodder on the Government benches will hold firm and vote for whatever the Government decides. Not one of them wants to be known as “the TD who lost Ireland her independence and allowed the IMF in”.

    @Zhou, pragmatic and wise , as always, but I worry about the failure to secure the people’s consent and the impact severe fiscal adjustments will have on a significantly dysfunctional domestic economy.

    @Colm H, (we’re probably going off-piste here) the IFS can provide rapid and credible scrutiny, but HMG, similar to our own dear Government, will carry on regardless. Executive dominance is only marginally less extreme there than it is here. As John McHale has noted, I want to see demand for policy analysis, advice and review of implementation and, more crucially, the supply informing the decisions of legislators – allowing them to hold the executive to account and to exercise restraint.

  35. Michael,

    You are of course right that the long average maturity of outstanding debt and the large cash balances are a huge advantage. But while the statement you quote may indeed have taken the alarm up a notch too high, I think the situation is quite serious. Bond investors are now pricing in a probability of default somewhere around evens. Even though we don’t have to do any new borrowing over the coming months, it will not be too long before we are heavily back in the market. Moreover, the secondary bond yields are already having an impact on other interest rates in the economy, particularly as they affect the guaranteed banks marginal cost of funding.

    There is some uncertainty about the interest rate we would pay if we had to turn to the EFSF, and I’m sure the government would pay a sizeable additional premium to avoid it. But the trigger rate is still too close for comfort. And it is worth noting the makrets are pricing in a high probability of default despite the existence of the bialout fund, just as they are with Greece. Today’s widening of spreads is a reminder of how precarious the situation is. Our creditworthiness is important and we are going to have to work hard to retain it.

  36. Staying with Michael Burke’s Lenin theme, a ’70s Russian anecdote had Lenin, Stalin and Brezhnez travelling in a train across Siberia. The train suddenly stopped in the middle of no where. Lenin wanted to get out and teach the engineer the principles of Marxist-Leninism; Stalin wanted to get out and shoot him. Brezhnev restrained them and said, “Close the curtains and let’s pretend we’re still moving”.

  37. Zhou,

    I do not disagree that a significant effort needs to be made up front, not least because a large part of the deficit is structural as you say. But all the estimates that I have seen have Ireland’s output gap reaching its maximum about now — probably somewhere around 6 percent of GDP after allowing for a signifcant fall in potential output. The Swedes have also been known for their ability to use countercyclical fiscal policy, especially as it relates to the timing of capital spending. Having to do your biggest adjustment just when the economy is at its weakest, and all because you do not ahve the credibilty to pursue a less procyclical policy, is a form of political — or maybe better, political system — failure in my view.

    I do not take this failure as given, however. Real political leadership and good fiscal strategy can make a difference: targeted political cooperation based on a national crisis that transends busines as usual; careful design of the overall programme to convince people of its broad fairness and thus prevent a damaging “war of attrition” as each group trys to pass on the burden to the next but mainly succeeds in shrinkng the national economic pie; use of whatever commitment technologies are available to make promises of out-year adjustments as credible as possible; getting the adjustment mix right, especially in terms focusing on measures that yield permanent structural deficit improvements while trying to maintain demand to some extent with measures that are viewed as more temporary (notably Swedish-style capital spending).

  38. Does anybody have any ideas on the micro level where the cuts should come from and where the taxes should rise? Should Metro North be scrapped or kept? How about college fees? Now that a major adjustment is inevitable shouldn’t the focus turn to the details of the plan?

  39. @Paul Hunt

    >> Government departments, regulators and other public bodies will pay consultants and even academics to give them the answers that they want.

    >> In the academic sphere there is probably too much focus on research at the bleeding edge – to maintain university rankings – rather than mixing it with an application of tried and tested research tools to analyse pressing economic problems and policy issues.

    Personally I’d like to see even a fraction of the sums we piss away on McKinsey/Accenture/IBM et al going to qualified, impartial and objective researchers in the university sector — professionals who are motivated by Public interest and not billable hours.

  40. I guess the PDs were infested with Tom Parlon like figures who did not even know what they stood for or indeed cared.

    You mean unlike Mary Harney, who could stand at the opening of an €100 million extension to the elitist private Blackrock Clinic while mouthing off to the press about there being no money for public hospitals?

    If so, more Parlon, and less “Marie Antionette” Harney.

  41. @ hogan
    ‘If we are paying staff not to perform operations, why are we paying them at all? This is not to say that we should be doing either – is there an analysis anywhere of whether it is cheaper to perform operations sooner rather than later? Should we, perhaps, be looking at increasing the amount of operations rather than reducing them? What’s the tradeoff between maintaining someone on pain-killers/preventative care vs. ‘curing’ them?’

    If you can sort out the principal-agent problems, the information aassymetries and the perverse incentives in healthcare, the sky’s the limit.

  42. @EWI
    I detest the monetarist ideology of the PDs and all they stand for – but the gombeen hangers on that feed in the trough without even thinking what they are doing are even more despicable.
    They have not even the courage of their convictions.

    At least McDowell told the Irish people he wanted to see more income inequality to drive growth – what ever that is.
    You can engage in argument with such people but the orcish hordes are a lost cause.

  43. Now FG claims the country will only need a €9bn adjustment over the 4 years to meet the target, and Pat Rabbitte won’t countenance more than a €4bn adjustment this year (or so he said Tonight with VB), so it seems that cross-party consensus on a four-year fiscal outline is right out.

  44. Having mulled it all over, I think the government will fall shortly after the budget is presented in December and the IMF/EU bailout (whatever you want to call it) will happen during Q1 2011 and there will be some ‘burning of senior bondholders’ shortly afterwards. You heard it here first at Old Joe’s Almanac.

  45. With more complete knowledge of the “plan”, and after extensive research, and after applying rigorus math, I can confidently predict the following for end 2011
    GDP -15%
    National Deficit 160 billion
    Unemployment 17-20%
    that is, if the international communtiy let’s it get that bad.
    Nothing surer. Check back next year. My platform is air, you can judge if it is hot. – and I would really like to know what John mMcHale thinks

  46. Joseph
    The most likely course, agreed!
    Still no commitment to real structure…..
    Freedom of Information and the internet means?
    Education and the internet means?
    No money for gombeen to make in the internet, so no interest in modernisation. Decentralization means doing away with workplaces altogether! Only until their kind have withered as they will over the decades, will there be a firm foundation. Sand and silt all the way sadly, for decades to come. No pollies opposed the car scrappage scheme? Typical attempt to put profits into certain hands at a loss to the taxpayer.

    Simple economics will be forced upon this bunch due to extreme deficits…… There are simply too many cronies to be paid off because they all know too much. Keep the banks books closed, else the heavens will fall!

    You are in for decadal reform. The pols have to be annihilated, not decimated. That takes time, as we know cockroaches will be the last life on earth.

  47. @ John

    “With apologies for stating the obvious, I don’t believe this government will voluntarily give up power. And they may well be able to hang on through a what is a critical period for the country’s chances of avoiding a bailout/default. So we have the face the question of how a credible four-year plan could be put in place by the present government given its limited expected time horizon and the limited cooperation that we now know will be forthcoming from the opposition. I understand why people have doubts that this can be done. But I don’t think we can just throw our hands in the air. The stakes are too high.”

    I can understand where you are coming from here but the only thing I believe keeping the governments show on the road at the moment is that the other political parties are somewhat agreeing to get in to bed with the government. I think its is a terrible strategy that is bad for the country and bad for Democracy.
    If FG and Labour Come out and make a joint statement saying that they believe the necessity for a general election is imperative as it would enable the country not to have to front load, and that until one is called they will not put their names to all party fiscal correction they would surely force an election?
    It seems to me that it was the sniff of some power, by being let to see ‘the books’ has dazzled the opposition into going along for the ride. Gormley showed a lot of clever political acumen by suggesting to them to do so. But to fall for the bait was a mistake.
    Some people may say it is their duty to do so to save the country. I say there is a better chance of saving the country if they force a general election.

  48. Apparently 2 Fianna Fail backbenchers are seriously ill with cancer and motor neurone disease respectively. The 2 Brians may not be able to pull off the Houdini trick this time.

  49. @anon
    “Now FG claims the country will only need a €9bn adjustment over the 4 years to meet the target”
    Noonan based this on growth of 4.5%. But I have no idea why he thinks that is likely or even if his sums are right?

    On the same show the FG spokesman was demanding to know the growth projections for the next 4 years.
    As if there was any way that these figures mean anything meaningful? They are forecasts in an extremely volatile environment. Lenihan’s lack of willingness to be upfront about the DoF numbers for the reason of “maintaining confidence” has to stop. It is causing way more harm than good.

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