A nuclear strike to the heart of the private sector economy in Ireland?

Constantin Gurdgiev, adjunct lecturer in finance at Trinity College Dublin and ex-editor of Business & Finance Magazine is scathing on yesterdays budget. Once again he argues the government’s forecasts are too rosy and that the exchequer will fail to hit deficit targets – he predicts a deficit for 2009 of between 12 and 13%. Yesterdays budget attempted to bridge the ballooning deficit by increasing taxes rather than spending cuts. Constantin predicts that one side-effect of this will be to send more shoppers and money north, costing the state more lost VAT and excise revenues. Similarily Gerard O’Neill, an economist fond of the Austrian School, puts forward the view that the increases in taxes for middle-income families with children will make two-income families uneconomical. Laffer will will have the last laugh as parents retreat from the workplace, depriving the government of yet more revenue. In the medium term this may hold true. For now because we’re entering a depression with unemployment over 11% and rising, the fear of job loss will keep both parents working in many households – whatever the cost. Given that we are closer to the start of this crisis than the end the average PAYE worker in the private sector, and her family, must be looking to the future with fear and foreboding – tax rises, pay cuts, redundancies, negative equity. Bleak indeed.

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For me, the steps taken yesterday needed to be taken, but we’re not out of the woods yet. There will be more harsh budgets over the coming years. In global and European terms Ireland still remains a low tax country, but is the future to be more of the same with the burden falling ever heavier on middle income tax payers? Or, will the government have the balls to seriously tackle public spending too?

Milton Friedman famously said “There’s nothing so permanent as a temporary government program”, and today the government announced that the temporary income levies are in fact permanent. Public sector pay

To be fair, Brian Lenihan did at least hint at dealing with the €50,000 question, that is public spending and public sector salaries. From his speech –


I have asked the Review Body on Higher Remuneration in the Public Sector to undertake a fresh review of top level pay rates to take account of the changed budgetary and economic circumstances, and the changed private sector pay environment and to benchmark rates against those of other EU countries of comparable scale. This Review will be completed by July. I believe pay at leadership levels in the public sector should be more in line with pay in other countries rather than with top level private sector pay in this country which had become over-inflated in recent years and is now falling in any event.

It sounds like he does intend to cut pay at the top-end, however it is the overall spend that matters and tokenism won’t make any real difference. The cuts have to be deep enough to significantly reduce the average and the widening 30% differential with average private sector pay.

Social welfare

€21 billion of current government spending is projected to be spent on welfare. Making cuts here is a real political hot-potato. Even if we can’t afford it, I have real qualms about cutting payments to workers who contributed to the growth of the state, just when their need is greatest. At least one of those cuts, the cut in rental allowance should not adversley impact those on social welfare. Rental allowance is actually a payment to landlords (rather than to the social welfare recipent), and with a guaranteed government pay out rental allowance actually represents a floor for prices in the massively oversupplied Irish rental market. Rental supply has increased by a factor greater than 5 in the last 3 years. So, if you feel exceptionally generous, pity the poor lumpen-Irish-landlord, not only are rents falling with no end in sight, but the government is rescinding more of their tax reliefs – mortgage interest rate relief chopped by 25%. It’s easier to be more concerned about householders generally, as Brian Lenihan has clearly telegraphed the imposition of a property tax. Personally I think an annual tax on property to cover the cost of providing state services to that property is fair – but beware the backlash of those who have paid huge Stamp Duty cheques in the recent past.

The banks

While the government, for now, appears to have taken the easy route with tax rises rather than spending cuts (still waiting on An Bord Snip, I presume?), they did announce their solution to Ireland’s most pressing problem, the issue of the insolvent banks. Personally I am not at all happy with the Irish taxpayer being lumbered with the bad debts of deliquent property developers, investors and bankers. I’d like to see the government nurse the banks until the end of the guarantee and then let them go bust, protecting depositors but wiping out shareholders and the banks’ creditors – clearing the way for more competent banks to purchase the old banks assets and serve the Irish market in a more prudent manner. That is a pipe dream unfortunately and even worse the taxpayer may be lumbered with dealing with bad loans of around €80bn secured against assets worth a fraction of this (apparently 1/6 of these toxic loans are in the north, 1/3 in total are external to the state!). It’s still unclear what the actual cost to the taxpayer will be. The budget includes the possibility of the taxpayer recouping some losses via a levy to be paid years from now, that idea is not without it’s critics either. Where will the money to fund the National Asset Management Agency come from? Constantin Gurdgiev thinks he has the answer – the ECB.

  • EWI

    Constantin Gurdgiev, adjunct lecturer in finance at Trinity College Dublin and ex-editor of Business & Finance Magazine

    Also one-time director of the hardline anti-regulation Open Republic Institute, as well as being someone who not that long ago was bragging in the pages of the Sunday Tribune about how easy debt was from his American credit card in comparison to Ireland(!).

    [Note to Mick et al – if part of Gurdgiev’s bio is to be quoted here to add weight to his words, so should less flattering parts of same be legitimate comment as well]

    So the taxpayers will end up banking with the state. The fat cats of the public sector will end up banking with BofI and AIB. /i>

    Newsflash to Gurdgiev and the OP both – public servants are taxpaying workers too. The world could do with far fewer of the believers in the free-market fairy who cheered us over this economic cliff, however.

  • Mack

    EWI –

    Play the ball not the man.

    There was no spin put on Constantin’s bio, I was quoting from a blog so put in biographical information to show that he has a relevant background. If I had said Constantin Gurdgiev ex-director of the Open Republic Institute, how would that have appeased you?

    Newsflash to Gurdgiev and the OP both – public servants are taxpaying workers too.

    Care to respond to the e50,000 question?

    http://ronanlyons.wordpress.com/2009/02/04/public-sector-pay-in-ireland-the-e50000-question-its-not-that-difficult/

  • Mack

    EWI –

    I notice that Michael Taft, a Union economist, largely agrees with the substantive point raised by Constantin Gurdgiev highlighted in this blog entry .

    http://www.indymedia.ie/article/91856

    So already, the Government’s deficit target has been blown off-course driving it back up to nearly -11 percent this year. Wait for this year’s and next year’s and the following year’s budgets to kick in. GDP growth will weaken further and, so, the deficit will remain stubbornly high.

  • EWI

    If I had said Constantin Gurdgiev ex-director of the Open Republic Institute, how would that have appeased you?

    The ORI was a quite hardline anti-regulation think tank of the modern American type, like the AEI (whom they had links to) – i.e. heavy on links to interested private sector industries. This is not just any old biographical detail when it comes to readers being introduced to “Constantin Gurdgiev, adjunct lecturer in finance at Trinity College Dublin and ex-editor of Business & Finance Magazine”. Especially in the context of the current meltdown being because of deregulation of the financial ‘industry’.

    Care to respond to the e50,000 question?

    Already have: http://ronanlyons.wordpress.com/2009/02/04/public-sector-pay-in-ireland-the-e50000-question-its-not-that-difficult/#comment-195

    You care to actually do an apples to apples comparison? Engineers in the public sector vs. engineers in the private sector, for example?

    Or even to acknowledge that our public sector engineer is doing the same work, paying the same taxes and putting at least the same amount of money back into the economy as his private sector equivalent (who is is probably being employed as a consultant or contractor alongside him at much higher cost to the taxpayer!).

  • EWI

    I notice that Michael Taft, a Union economist, largely agrees with the substantive point raised by Constantin Gurdgiev highlighted in this blog entry .

    Oh, really? Gurdgiev is (and has for along time) lobbied for shanking the public sector so that the all-benevolent private corporations he champions can suction the public coffers out of the country. This latest concern for deficits is just another battle in this war to him, I think.

    I very much doubt that Michael Taft has the same views.

  • Mack

    EWI –

    Who is is probably being employed as a consultant or contractor alongside him at much higher cost to the taxpayer!

    We’ll in that case the government should fire the more expensive option and rehire the same worker at the best value rate. The problem at the minute is the potential for never ending tax hikes on workers living with the threat of pay cuts and redundancies. With public spending of €55bn on revenues (after this budget) of maybe €37bn something has got to give.

    My own experience of working in the public and private sector is that my public sector hourly rate is much higher for much less economically valuable work.

    Bear in ming the pay differential is substantial before you calculate additional benefits such as superior pensions (and yes I appreciate that public sector workers contribute to their pensions now), job security, allowances, working conditions (bank hour in the electronic age!).

    On the point you raised on the blog, many roles the public sector attract higher salaries for doing the same job for more qualified individuals. How does this make economic sense? Why should someone get paid more, just because they have a degree?

    The average salary in the semi-state ESB is €90k. The average salary for a train driver is over €50k, the top paid academic earned €409k last year!

    I’ve said it before (on other threads) if it’s only the guys at the top that are skewing the average then cut their salaries. BTW, I fail to see how any state employee, such as a doctor, is worth CEO wages (250-350k). It’s nuts.

  • Mack

    I very much doubt that Michael Taft has the same views.

    Which is why you should stick to the ball, not the man!

  • EWI

    Which is why you should stick to the ball, not the man!

    What, exactly, does your conflating Michael Taft and Constantin Gurdgiev as anything other than ideological opposites, have to do with “playing the ball, not the man”?

    To pick another example; the Provos and Libertas/Rivada both oppose Lisbon. In which universe do people imagine that this is any basis for claiming that these two are ideologically in the same library, never mind the same page?

  • Mack

    EWI –

    Who claimed they were ideaologically linked. I mean, really?

    An economist on the web posts something up, another one posts something up that comes to the same conclusion. What has their idealogical background got to do with it?

    That’s why you play the ball – argue the point, not someone’s background.

  • Wilde Rover

    Mack,

    “BTW, I fail to see how any state employee, such as a doctor, is worth CEO wages (250-350k). It’s nuts.”

    To be fair, it would be hard to say that most CEOs are worth CEO wages these days.

  • Mack

    Lol, very true Wilde Rover. At least most of them aren’t burdens on the state, the pay ceiling imposed on Bank CEOs was a bit of a joke too…

  • Mack
  • EWI

    We’ll in that case the government should fire the more
    expensive option and rehire the same worker at the best
    value rate.

    The fallacy in free-market ideology is that they presuppose noble rational actions by those making the decisions (and we’ve all seen how those turn out). Same here: the economically-rational decision is likely to be outweighed by other factors rational to the mind of the manager making the decision; “does this firm’s experience in this particular field make this a politically-safe decision for me?” for
    example (others spring to mind as well, but I’ll refrain).

    The problem at the minute is the potential for never
    ending tax hikes on workers living with the threat of pay
    cuts and redundancies. With public spending of €55bn on
    revenues (after this budget) of maybe €37bn something has
    got to give.

    These tax hikes apply to workers in the public sector as well, you’ll notice – and, I hope, actually acknowledge. If there is one thing that lights my wick, it’s the sight of shills for the boss class on the media day after day trying to divide and conquer PAYE workers angry at the present circumstances that our wonderfully-renumerated, ‘tax efficient’ business elite have led us to.

    ‘Private’ vs. ‘public’ sectors? The supposedly private sector is more than happy to suckle off the public teat, as many will notice, and I’m certainly seeing no such distinction when the bankers require their 80-90 billion euro bailout(!), industrialists want ‘stimulus’, agriculture wants subsidies etc.

    My own experience of working in the public and private
    sector is that my public sector hourly rate is much higher
    for much less economically valuable work.

    I would like to hear your definition of “less economically viable work” here.

    Bear in ming the pay differential is substantial before
    you calculate additional benefits such as superior pensions
    (and yes I appreciate that public sector workers contribute
    to their pensions now), job security, allowances, working
    conditions (bank hour in the electronic age!).

    To address in turn:

    As a citizen and human being, to me the situation where public sector workers seem the only ones who can count on an adequate pension (unless you’re a private manager, of course!) reflects rather badly on free-marketism, and not on the public sector. It seems rather to be letting the private sector off the hook to allow them to dump retired employees into poverty – wouldn’t you say?

    Job security? Not guaranteed for a while now, I think. And perhaps those decrying such can first point out which services the country can do without – doctors? Guards? soldiers?

    The ‘bank hour (half-hour in reality, I think?)’ doesn’t make sense for employees on electronic payment. However, are you sure that all public servants are on such? I myself came across an example of someone still drawing a paycheque not two years ago.

    On the point you raised on the blog, many roles the
    public sector attract higher salaries for doing the same job
    for more qualified individuals. How does this make economic
    sense? Why should someone get paid more, just because they
    have a degree?

    Yes. And it’s quite odd to see someone who elsewhere argues for pay based on value (and what better value than
    professionals who are qualified experts in their fields?) arguing otherwise.

    The average salary in the semi-state ESB is €90k.

    The ESB happens to be quite an oddball among semi-states in many ways. It’s linked to private sector pay deals, the ESBi part (whih I have some knowledge of) has a peerless reputation internationally for its consulting business, the government requires it to make bigger margins on electricity – tough luck, consumers! – so as to make domestic private competition possible, etc.

  • EWI

    The average salary for a train driver is over €50k, the
    top paid academic earned €409k last year!

    Iarnrod Éireann I know little of, so I can’t comment on what the history of this is. I can only comment that I would prefer that the trains that the public travels in be staffed by experienced, professional staff – see Sullenberger’s comments on union-backed professionalism after he brought his plan down – but that’s my personnel opinion. YMMV.

    I am glad that you brought up your “top-paid academic. Those who have been following the goings-on in the Irish third level sector over the past decade will be familiar with the influx of academic managers who were influenced by the American system with it’s ‘free-market’, corporate, style of operation. The result? The poaching of ‘star’ academics (with accompanying ‘star’ salaries), the burdening of these colleges with enormous debt as aggressive business expansion occurred, the wholesale dumping of “less economically viable” university courses and schools, and of course the greatly increased paycheques of these new masters of the academic universe.

    Your “€406,000” refers to the situation in UCD under Hugh Brady. There are copious online sources of information online about how the paragraph I wrote bove has played out within the Belfield context to illuminate the pitfalls of applying the free-market business voodoo bullshit to non-business fields.

    I’ve said it before (on other threads) if it’s only
    the guys at the top that are skewing the average then cut
    their salaries. BTW, I fail to see how any state employee,
    such as a doctor, is worth CEO wages (250-350k). It’s
    nuts.

    Firstly, please either compare those doctor salaries to the equivalent top doctor pay in the private sector, or get off the pot.

    Secondly, you “fail to see how any state employee […] is worth CEO wages”. Funny thing is, that someone (such as Mr. Lyons) who is at least passingly familiar with the benchmarking process ought to be able to remind you of the rather intuitive idea that those with equal workloads and responsibilities ought to be on equal pay.

    And finally, you may want to note, a managerial salary of “(250-350k)” would be laughed at as chump change by the actual CEO’s in this wonderful free-market paradise of ours.

  • Mack

    EWI –

    Suffice to say I disagree with most of your response.

    Let’s take this from first principles.

    1. We have a self-feeding property bubble, fueled by borrowing on the European credit markets. Irish money supply increases dramatically (amount of money in the economy). This is not real wealth, but borrowed money.

    2. Illusional borrowed wealth is taxed and redistributed in the form of higher wages to public sector workers. With the extra borrowed money in the economy private sector wages rise too. In some cases (e.g. construction spectacularly so).

    3. Foreign borrowing by private sector stops. Related private sector industries collapse. Government revenues collapse. Private sector employment drops, wages drop. High public sector salaries remain.

    4. Huge short fall in government revenues.

    Now, you either accept that what happened before was illusory or you don’t. The cash in the economy was borrowed cash that was malinvested – i.e. the investments won’t even pay for themselves (as our bankrupt banks testify too).

    What to do now? If you think the wealth in the economy was real, then you might be tempted to borrow and raise taxes – to make up the deficit.

    This is where I think many part with reality.

    Having the government borrow to continue to party will only end up with the government being insolvent too. (Even D. McWilliams an advocate of this approach argues that we should do it to force more prudent Europeans to pay in the end!).

    The only alternative, I think is for both the public and private sectors to deflate (yes – deflate – devaluation isn’t an option) quickly to levels at which we regain international competitiveness – while encouraging investment in job creation (either by private enterprise or the state) to get people off the dole and Ireland working again.

    Borrowing to pay high wages is ludricous. On taxation you argue public sector workers pay tax too, which is true – but the high wages are also the cost!

  • Mack

    Specifically on wages.

    A fair wage for labour is proportional to it’s productivity – nothing to do with benchmarking against workloads or even responsibility elsewhere. Just because one entity overpays, doesn’t mean that it should be replicated elsewhere, and fundamentally there has to be some differentiation between employing entities such that employees make an informed choice as to where to work. Private sector wages should be higher to encourage the best and brightest to work hard in generating the wealth that can then be redistributed.

    This is also why it’s crazy to pay someone more just because they have a higher qualification (note in the public sector they don’t even have to be relevant). It’s actual performance on the job that matters – qualifications are a proxy at best and are useful standardised mechanism for demonstrating potential.

    I don’t really want to focus too much on my own situation, but on the one hand I develop software (in conjunction with others) that helps generate hundreds of millions in revenues on with sky high profit margins. On the other hand I teach pensioners how to use their home computers to word process and the like.

    CEOs and senior managers have renumerations that I find ridiculous and as an occasional small shareholder down right offensive. That I think they are overpaid is one thing – I at least can choose to purchase different products and services if I think they are overrpiced, to suggest that lower paid taxpayers should then be crucified to fund similar salaries in the public sector is deeply immoral – and falls little short of theft.

    –>
    I agree the whole areas of pensions is a very difficult problem. With aging populations it’s going to become more of a problem (less workers per dependent). And yes, it is deeply inequitable to ask less well paid private sector workers to fund superior pensions for workers in the protected sector.

    Where do you see wealth being generated from to pay fanatastic pensions for everyone? You attack the ‘free-market’, perhaps you are unaware of the collapse of Soviet Russia, of Deng Xiaopeng’s adoption of capitalism in China (where farm productivity soared after returning property rights – contrast with the disaster that was the Great Leap Forward)? Or perhaps of the difference in living standards between North and South Korea?

    Capitalism trumps socialism by and large because it does generate more wealth, if we can just make sure that those who would exploit the system and others for their own gain fail, we’d all be better off. (See Nassim Nicholas Taleb’s eminently sensible suggestions here)

  • EWI

    Suffice to say I disagree with most of your response.

    Let’s take this from first principles.

    1. We have a self-feeding property bubble, fueled by borrowing on the European credit markets. Irish money supply increases dramatically (amount of money in the economy). This is not real wealth, but borrowed money.

    2. Illusional borrowed wealth is taxed and redistributed in the form of higher wages to public sector workers. With the extra borrowed money in the economy private sector wages rise too. In some cases (e.g. construction spectacularly so).

    3. Foreign borrowing by private sector stops. Related private sector industries collapse. Government revenues collapse. Private sector employment drops, wages drop. High public sector salaries remain.

    4. Huge short fall in government revenues.
    Now, you either accept that what happened before was illusory or you don’t. The cash in the economy was borrowed cash that was malinvested – i.e. the investments won’t even pay for themselves (as our bankrupt banks testify too).

    What to do now? If you think the wealth in the economy was real, then you might be tempted to borrow and raise taxes – to make up the deficit.

    This is where I think many part with reality.

    The disconnection with reality clearly lies elsewhere, I think. You say that the “illusory borrowed wealth” went straight into the public sector’s pockets? An amazing assertion, in the face of the PD-FF coalition’s fiscally-irresponsible taxation slashing policies in the boom-times; the very policies which led us to not being able to actually afford even the extremely modest, in EU terms, public sector which we now possess – when the financial industry-created bubble imploded.

    Having the government borrow to continue to party will only end up with the government being insolvent too. (Even D. McWilliams an advocate of this approach argues that we should do it to force more prudent Europeans to pay in the end!).

    I am intrigued by this notion of a “party”. I’m assuming here that you’re not referring to the PD-inspired tax cuts of the last two decades? Or to the myriad of of other giveaways (relief at highest rate of tax? I ask you!) that have been showered on the better-off in the same period.

    The only alternative, I think is for both the public and private sectors to deflate (yes – deflate – devaluation isn’t an option) quickly to levels at which we regain international competitiveness – while encouraging investment in job creation (either by private enterprise or the state) to get people off the dole and Ireland working again.

    I suspect that this “encouraging investment in job creation” involves yet more of the don’t-tax-the-rich! philosophy that has landed us in this budgetary imbalance.

    Borrowing to pay high wages is ludricous. On taxation you argue public sector workers pay tax too, which is true – but the high wages are also the cost!

    I notice the public sector having taken an average 7.5% pay cut this year (with likely more to come), along with recruitment and promotion freezes and also subject to the same income tax increases as everyone else in the PAYE net. I also note that you appear to have retreated from your supposed examples of public sector cushiness.

    So don’t lecture me on “high wages”. The villains here are those who have tried to run a modern European country while hewing to batshit-crazy theories of the “miracle of Europe”, built on the Free-Market Fairy of deregulation and unsustainable tax levels.

    That this pyramid scheme, the child of the great and the good of the pro-business brain trust, has inevitably collapsed is no fault of ordinary PAYE workers – but who seem to be the ones expected to solve it through ‘pain’.

  • Mack

    EWI –


    You say that the “illusory borrowed wealth” went straight into the public sector’s pockets? An amazing assertion

    I said no such thing. Might be worth recapping on the causes of the property bubble. There was large scale borrowing on the European wholesale market by Irish banks, the average loan to deposit ratio was 160%. What this means is that the lent out more than they had on deposit – the difference was borrowed on European markets. It gets worse than that, because of Fractional Reserve Banking – the borrowed money gets lent out, then spent. The reciever of the spending deposits the money in a bank again (this is the same money that has just been lent out), where it can be lent out again. This effect massively multiplies the amount of money in the system. Irish money supply was increasing by as much as 35% p.a. during the boom. Most of this increase in money was entirely illusory – the effect of borrowing of foreigners only to lend and borrow that money multiple times on housing. Once the bubble is gone, the money is gone. Unfortunately unsustainable structural changes, such as the tax cuts you correctly point out, but also pay rises across the board remain in place.

    I hope this clarifies what I mean by party. It’s not the tax cuts or the pay rises, but the very supply of money itself. The money that was sloshing around in our overheated economy wasn’t real wealth, it was borrowed money.

    afford even the extremely modest, in EU terms, public sector which we now possess

    It’s modest in terms of the services it delivers. Unfortunately it costs 40% of GNP to maintain (GDP in Ireland is boosted by transfer pricing), which is not a modest amount.

    I suspect that this “encouraging investment in job creation” involves yet more of the don’t-tax-the-rich! philosophy that has landed us in this budgetary imbalance.

    We’ve just sent tax rates back to early 1990’s levels. It’s like the Celtic Tiger never happened, so tax rates are high. Pragmatically I’d like whatever works to be done. If the rich won’t invest their money the government should take it of them, if they;re willing to use it to create sustainable jobs here – they can keep it.

    Jobs are crucial, critical to everything. I’d prefer the private sector to generate the jobs, but favour pragmatism over idealogy in solving that problem – can you say the same?

    That this pyramid scheme, the child of the great and the good of the pro-business brain

    You occasional make good points. But.. you are anti-business? How would you power an economy? Create wealth? Is this just angry rhethoric, or have you really thought any of this through?

    I agree, the burden on the PAYE worker is a disgrace – in particular the making the taxpayer liable for the mistakes of the bankers & developers. Realistically we had a bubble, it sucked in borrowed money we didn’t earn that inflated everything in our economy. Unless you can put forward arguments as to how we can generate that wealth for real – as the rest of the world collapses into depression, then we have to adjust quickly to something approach our true value (with cost of living decreases too) so we can be competitive and grow our economy properly – which we haven’t managed to do since around 2001.

    By the way, I retreated from nothing, I just didn’t repeat myself. All that concerns me about public sector wages is the cost to the exchequer. I would rather see average salaries 10% (which can be done by cutting at the top rather than the bottom) and 10% more people in a job (teachers, nurses, Gardai etc).

  • Mack
  • Dave

    Mack, the debts that are to be transferred to the public sector are not intended to be collected but, rather, to be written-off and repaid instead by the taxpayer. Due diligence or concern for the nation or the state has no relevance. That is why, for example, Mr Lenihan did not bother his backside to read the due diligence report on Anglo Irish Bank. The backers of FF and the wealthy elite who have large deposits in these banks (most of whom are foreign corporations) are to be protected at all costs.

    If, as the cover story goes, the guiding dynamic is restoration of funding to the economy, then that is more efficiently accomplished by the state forming a new bank with, say, 5 billion in Tier 1 capital under the Basel II accords to allow it to leverage to, say, 12 times that amount. You then have a new bank with zero debt and 60 billion to lend. The State could then sell the bank when it is established and realise a multi-billion capital gain for the taxpayers while protecting them from assuming responsibility for the losses suffered by those who invested in the failed banks.

    At any rate, we need to introduce a new set of amendments to the constitution to prevent quislings like these from having powers that are morally beyond their remit. We need to do that because we are too stupid as a nation not to elect such quislings.

  • Dave

    By the way, the limit on the old deposit guarantee scheme was 100,000 before the government interfered to make the guarantee unlimited. Most taxpayers did not have 100,000 in the bank, never mind more than that amount. Yet it is they who are being forced by the state to work for 2, 3 or more decades to repay the debts of the wealthy elite and to guarantee their wealth. It is these FF politicians and their backers who have large deposits in these failed banks that they don’t want to lose. As an Israeli passport holder, you can guess where my money went.

  • Mack

    Sensible move Dave. I think most people are still in denial about the scale of the problem in Ireland.

    With marginal tax rates today of 28% and 53%, Ireland has reset the clock back to the early 90’s. Economists on the left (Michael Taft) and right (Constantin Grudgiev) point out that this won’t actually reduce the deficit at all from where the government thought it was. So with already
    penal tax rates, we face the same problem – before even facing up to the banks!