Fiscal ruin of the Western world beckons

Discussion in 'The Intelligence Cell' started by Blogg, Jul 20, 2009.

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  1. Thanks Ambrose, that has really cheered me up. :(

    But if idiot Governments keep piling on the debt, it will happen.

    "For a glimpse of what awaits Britain, Europe, and America as budget deficits spiral to war-time levels, look at what is happening to the Irish welfare state. "


    "Events have already forced Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state. He has passed two emergency budgets to stop the deficit soaring to 15pc of GDP. They have not been enough. The expert An Bord Snip report said last week that Dublin must cut deeper, or risk a disastrous debt compound trap.

    A further 17,000 state jobs must go (equal to 1.25m in the US), though unemployment is already 12pc and heading for 16pc next year.

    Education must be cut 8pc. Scores of rural schools must close, and 6,900 teachers must go. "The attacks outlined in this report would represent an education disaster and light a short fuse on a social timebomb", said the Teachers Union of Ireland.

    Nobody is spared. Social welfare payments must be cut 5pc, child benefit by 20pc. The Garda (police), already smarting from a 7pc pay cut, may have to buy their own uniforms. Hospital visits could cost £107 a day, etc, etc. "


    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5857074/Fiscal-ruin-of-the-Western-world-beckons.html
     
  2. The welfare state has ruined this country financially and morally. We need a kick up the arrse. Perhaps this will be it.
     
  3. I read that article with a degree of scepticism as Mr Pritchard has a reputation of being Dr Gloom personified. However, a cursory glance at the Irish news websites revealed that he might not be too far from the truth.

    In the UK, we are slightly shielded from that which is affecting Eire because sterling has already plunged against the Euro by some 25% (which is why Eire shoppers are crossing the border to shop in NI). Our imports are, therefore, more expensive and that has choked off consumer demand whilst boosting our exports. Had we been part of the Eurozone, I think we would have been deeper in the brown and smelly stuff than we already are.

    I understand that Germany is also doing badly because its export business has been wrecked by the strong Euro - but I would welcome comments from anyone living in Germany. Is it as bad there as the press makes out?

    I'm off to buy tinned food, gold, shotguns and ammo...

    Litotes
     
  4. msr

    msr LE

  5. Alsacien

    Alsacien LE Moderator

    Absolutely not a crisis going on, caution is the word on the street. The issues there are were already issues before the financial world went tits up.
    Skyscrapers and shopping centers are still getting built, and my books are full with financial industry work for the next couple of years.

    There is a certain amount of self-fulfilling prophecy from the doom merchants which needs to be balanced.

    Substance and balance here:
    http://www.imf.org/external/np/ms/2009/060809.htm
     
  6. Doom merchants need not apply: job has already been done for them.

    Irish budget has planned €74 billion expenditure this year and total projected Revenue of €53 billion revenue.

    A gap of €21 billion per annum is equal to 11 per cent of GDP.

    Given the cr@p rating of Ireland debt funding for that is wholly and entirely unrealistic and the matter is way beyond party politics. The markets, World Bank, OECD and IMF have spoken.

    So something has to be done and that is higher taxation and very substantial cuts in government expenditure. There is no other option.
     
  7. At this end of the Reich everything seems depressingly normal, there is plenty of news about companies facing hard times and NRW has been badly effected, however consumer spending has not dropped as expected, most shops seem quite satisfied (not Quelle or Karstadt!).

    I already have loads of ammo, bullets, cases, primers and powder. :D
     
  8. Alsacien

    Alsacien LE Moderator

    Well the Irish economy has always been a bit of a basket case, with the notable exception of the last few years riding the EU wave and world growth.

    http://www.ecb.europa.eu/stats/keyind/html/sdds.en.html provides combined stats from Eurostat and ECB for the whole zone and is reliable data. They tend to be a bit PC when it comes to picking on one country and its data, which may be good and bad I'm not sure.
    2010-11 will be a crunch time in the EU, but everything is comparative to what happens in the US and Asia, so nobody knows for sure.
     
  9. msr

    msr LE

  10. Alsacien

    Alsacien LE Moderator

  11. Biped

    Biped LE Book Reviewer

    See my sigblock.

    Labour will not change the process and stop spending. If anything, they've got this bent idea that MORe government spending will fix the problem!!

    When Call-Me-Dave gets into power, he's going to do very little in terms of cutting government expenditure, because he knows he's not Thatcher, and if he puts a large number of Labour's people (civil servants) on the dole to cut costs, he'll be a one-hit PM like Broon, only not as hated.

    Dave is going to plump for the long haul, and gradually reduce public expenditure over (he hopes) 3 terms to minimise the pain and get the books remotely tidy. It's going to take 5 terms before we are in the black at least.

    If Western nations can dump this lunatic idea that MORE government spending is going to fix all ills, then perhaps the West will not sink into a cesspit of its own making.
     
  12. Alsacien

    Alsacien LE Moderator

    Surely you are not saying the EU approach is right and the British one wrong Biped? :wink:

    (Al ducks to avoid low swooping pig)
     
  13.  
  14. An interesting article, Rocketeer, and thanks for pointing me to it. I normally avoid MSN articles because they always seem to be "stating the bleeding obvious" when talking finance but, perhaps, this global problem needs to be explained in "Janet and John" terms! Even I understood the article.... I think!

    The major problem now is that we have to escape from looking in the rear mirror. The car crash is past us, and we have to move on. That takes strategic leadership at a high level, and I do not think our current leadership is up to it. Messrs Brown, Darling and the Treasury appear to be frozen to the telly watching the slow motion replays of that car crash and arguing about which juggernaut, car or pedestrian caused it.

    Just to be fair, I do not think that Mr Cameron and his sidekicks have a plan either, beyond gaining power. And that frightens the sh*t out of me!

    I note that, despite these articles promising the end of the world as we know it, the price of gold is drifting downwards and is c$925/oz. If we were about to go down the pan, surely gold would be stronger than it is?

    Thank you to the German based posters for their comments. I suspect that it is the same in the UK for most people; if you have a job, income and prospects, all of this is background noise. Life continues as before, except that Zavvi and Woolworths have vanished from the High Street and you have to walk a bit further to buy that CD. However, if you used to work for JCB, LLoyds-TSB, RBS or Corus, life will be pretty grim on the dole.

    I am not even going to try and imagine what life must be like in, say, Zimbabwe.

    Litotes