Comments | ulaire_daidoji: Does this sound crazy?

ulaire_daidoji

Does this sound crazy?

Nov 24, 2009 10:43

What would happen if the Irish Govt were to start issuing punts again. Create our own currency, make it legal tender and use it to pay the public services and social welfare etc. Euros would still be legal tender and eventually the Punt would find it's real value based on demand for Irish goods and services. It seems to me that ability to devalue ( Read more... )

Comments 27

marginal_jc November 24 2009, 10:49:27 UTC

I could definitely get into it if I had some time. It is a realistic option. David McWilliams, for example, has advocated it. I may be back.

natural20 November 24 2009, 11:14:32 UTC

My gut reaction is, Jesus no. On a consideration my reaction doesn't really change. I accept that a strong Euro has made our exports more expensive in certain markets (the UK being the most obvious), but I'm not going to agree that we should go back to having our own currency to deal with that, perhaps we should be looking at ways to reduce our dependency on the UK and look more towards the bigger trading block we share a currency with? I firmly and continually believe we have more to gain from being an integrated part of the EU than we do from being an island out west, relying on the intermediary island for our trade. I'm sure that marginal_jc can put forth various excellent notions, but I'm afraid citing McWilliams as a first source is not going to make me think favourably of such plans.

ulaire_daidoji November 24 2009, 11:35:35 UTC

So how would you go about constructively fixing the 25 billion plus hole in the country's wallet?

IMO, everyone is paid too much, both public and private sector. At the same time, everyone is charged waaaay too much for everything.

Rents are a good place to start cutting costs and improving competitiveness. All this property the govt is about to come into possession of, how about letting all of that out to small and medium enterprises at nominal (free for first two years?) rents. That'll encourage growth, employment and therefore more taxes?

natural20 November 24 2009, 11:46:02 UTC

Well, lowering prices would be a good start. I don't think the currency is to blame for the rise in prices, at all. I like the rental idea, to be honest, but I'm not sure, with the clusterfuck that is NAMA, that there is a way of doing it. Decisions have been made that will affect the public purse for a long time, overpaying on NAMA to try and keep some of the precious bankers and developers afloat is the biggest of 'em.

Personally, without seeing costings, obviously, I'd cut the VAT rate, remove the travel tax, introduce a scrappage scheme and see how much unnecessary admin services can be cut from things like the HSE, as a start.

ulaire_daidoji November 24 2009, 11:53:26 UTC

I think outright cutting in the public sector is the wrong way to go. There's no money to pay for redundancies and there's certainly no money to pay more people social welfare.

I think radical restructuring of the public sector is the key. For example, why not get the unnecessary admin services employed doing necessary admin work in Police stations and getting gardai back on the streets?

Would everyone feel a lot better if we got Sean Fitzpatrick in a stocks on O'Connell street? It seems obvious that people are more worked up about the unfairness than the actual pain everyone is going through.

Thread 11

giftederic November 24 2009, 12:45:35 UTC

If we had the option of devaluing our currency our cost to borrow would soar. Part of what has made the current situation not require something akin to IMF intervention is the fact that we can borrow in euros at *reasonably* competitive rates. Being part of the euro has also encouraged investment (or at the very least encouraged investment not to flee at a faster rate) because investors don't have to seriously fear that their investments will devalue overnight.

Additionally devaluing our currency would punish people who have saved over the past decade. Import costs would rise and Ireland actually produces feck all finished goods that don't require imports of primary goods from elsewhere first so this would have a limited effect on our competitiveness. (it would effectively just reduce salary costs, and devalue what little other natural resources we have)

If you think that everyone is paid too much, surely raising taxes is the way forward. I don't subscribe to the argument that raising taxes causes contraction of the economy. On the ( ... )

bastun_ie November 24 2009, 13:03:40 UTC

Someone call a doctor, I'm agreeing with giftederic on economics!

Cutting services - yes, we do have to do this. The key is doing it fairly. Me, I'd be starting with non-essentials and services that impact the less well-off the least, while investing in the future as much as possible. So as few cuts as possible in education, and yeah, that'd be no more subsidies for horseracing, greyhound racing and the arts. Beyond what they get (should get) from the National Lottery. Yes, all of those areas are employers - but euro for euro, they benefit the rich moreso than anyone else and employ relatively few.

giftederic November 24 2009, 13:10:47 UTC

Unfortunately there just isn't alot to cut in these areas, though I agree that what little there is to cut there should be cut asap. I also imagine that there are cuts to be made in education, I certainly wouldn't have an issue replacing free 3rd level education with an interest free loan scenario instead. People should pay for their education if they are going to study degrees for the sake of it rather than economically productive education.

ulaire_daidoji November 24 2009, 13:12:25 UTC

Interesting facts about the Irish Bloodstock industry

http://itba.info/PDFitbadown/HIT_Statistics.pdf

The Headline statistic there is the 16,500 jobs in the industry.

Attacking the arts is a populist move. Why should we subsidise hip replacements for grannies? They aren't net contributors either under the same argument for attacking the arts.

Thread 10

ulaire_daidoji November 24 2009, 13:03:06 UTC

I don't think anyone would feel too bad about paying more taxes if they thought they'd get decent public services for their money. What are the chances of that happening in Ireland though?

I had a Danish flatmate who was terrified of going to hospitals in Ireland because she'd only get sicker there. Broadband penetration is abyssmal. It took about 4 years to re-pave O'Connell street.... Just a few examples of how crap our services really are.

lainey316 November 24 2009, 14:11:02 UTC

This.

Do we really need to cut services, or just make our services work properly? For example O'Connell St - do we cancel OPW projects, or just manage OPW projects and staff so that they complete in a reasonable amount of time and on budget?

(Broadband penetration isn't the government's responsibility directly though - it's not a public service. However if telcomms was managed properly when it WAS a public service e.g. by laying proper cabling and doing estates properly and so on, then we wouldn't have all the problems now. That said it's really not cost effective in some places to lay the cable.)

bastun_ie November 24 2009, 15:50:40 UTC

And in those places, you have wireless. Broadband isn't a public service, per se, but it is, in the 21st century, something that should be counted as part of every country's basic infrastructure, along with roads, rail, power, etc. The result of not having it is a disincentive to inward investment ( ... )

lainey316 November 24 2009, 16:22:44 UTC

Certainly I agree - it should be part of infrastructure, but it's not - I was only commenting on it in the context of the original mention of it. To get the penetration one would hope for would require government subsidy of the eircom investment (which I *think* does happen? but I'm not certain ( ... )

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