Fiscal Policy Panel

The ESRI Budget Perspectives conference has been taking place this morning.   It featured a fiscal panel with the following presentations

Also highly recommended is the paper by Tim Callan et al:  Taxes, Welfare and Work Incentives

7 replies on “Fiscal Policy Panel”

The primary function of the dole is to deleverage the financial system – and to do so in a manner that prevents outbreaks of disorder.
No goverment money is available for rational wealth increasing investment in this time period as that would deprive the local credit banking sector of immediate income needed to reduce their books without loss.
At its core the adminstration have no concern for the victims of this crime spree.
Its the rotten heart of the nation state really.

Mr. Keen’s solution is to increase wages for ordinary people (i.e. those proportionately most in debt), I believe. Of course he recognises that one economy can’t do this on its own.

Sounds like FG/Labour is going to go down the trap of cutting social welfare as it answer to everything. One huge problem we have at the moment is that anybody with enough income is saving all they can (probably mainly abroad if you look at the flow of bank deposits, thankfully recently stabilised but what happened to to 50 billion taken out of the Irish banking system by wealthy individuals – probably on deposit in Swiss and German accounts).

Bascially to pay these German and French banks euro + interest on their bubble investments in Irish junk estates we are now going to reduce the cash going to Social Welfare rather than taxing the savings and investments of the rich who have their cash in those very same German Banks.

They should remember a euro out of social welare is a euro out of the local economy and a euro reduction in GDP. A euro out of the salary of some overpaid consultant that was destined for a german bank account is an extra euro towards reduction of the deficit.

I am not saying that reductions in Social welfare are very important part of the mix, the incentive to work has to be there at all times. However a mix that does not include a large increase in taxes for the wealthy will head Ireland back into a steep recession and INCREASE in the budget deficit and INCREASE in debt/GDP simultaneously. The Greeks will have the last laugh as their debt per capita is lower than Ireland and they are going to get 50% of their bonds. So much for being the good boy in the class.

Yes I referred to the nation state model but whats really strange is the new market state euro system.
You see both America & Britain are still technically nation states in a financial sense at least – their currency / Gov bonds is not a liability on their commercial banks books – although commercial banks are international now so they have much less control.
But that is not the case with the eurosystem – the euro banks hold huge sovergin liabilties in the currency union debt matrix.
Now the ECB talks a lot about inflation ………..
But Ireland could have solved its problems in a instant without the ECB printing private euros by turning our credit deposits into Irish goverment debt (this would mean we owe debt to each other rather then base our declining money(credit) on declining asset values)
But that action would have destroyed private bank bond actors as financial assets would have collapsed in a instant – leaving them no time to escape.
We have been played to perfection by both insiders with skin in the game and also the higher priesthood who are now camped in Dublin Castle.

I think the roots of the really extreme leverage era goes back to the Rubin era US treasuary when they cut US goverment debt dramatically and also post maastricht Europe and it looks like they were both interlinked in strange twisted ways.
Its beyond sickening really and very very dark.

It would seem the crisis has now ushered in a Golden Age of macroeconomics in Ireland. The presentations from the Three Wise Profs make fascinating reading – from the technical (Prof Lane – apparently we are about to step into the realm of Fiscal Rules, Debt Brakes and so on), to the bold (Prof McHale outlining a fearless report from the Fiscal Council), to the not-so-bold (Prof Fitzgerald, arguing for continued laxity and inevitable slippage in our budgetary targets). I wonder were the presentations and discussion webcast, and are they available online somewhere?

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