We got it wrong on austerity and made things worse - IMF

[tay]

THE IMF has held up its hands and admitted it got it wrong when calculating the effects of austerity in Ireland.

The organisation said that it completely underestimated how the Irish economy would perform under strict spending rules.

The International Monetary Fund (IMF) said in an academic report that it believed for every €100 of austerity through higher taxes and spending cuts -- this would impact €50 in terms of growth and unemployment.

However, the real effect meant that the austerity cut €90 to €150 out of the system.

The admission is likely to make Finance Minister Michael Noonan's job far more difficult ahead of yet another austerity budget in December.

The IMF said there was an overall drop in incomes due mainly to increases in taxes and austerity measures in Ireland.

This ultimately served to push up poverty levels and squeeze the middle class.



We got it wrong on austerity and made things worse - IMF - News, Frontpage - Herald.ie

 

[taxslave]

So are they now saying that uncontrolled spending of borrowed money is a good thing?
If governments had not grossly over spent when time were good they would not be in this position now. This goes for many households as well. Making the minimum payment on your credit card does not mean you have money to burn.

 

[PoliticalNick]

So are they now saying that uncontrolled spending of borrowed money is a good thing?
If governments had not grossly over spent when time were good they would not be in this position now. This goes for many households as well. Making the minimum payment on your credit card does not mean you have money to burn.

Minimum payments are a trap. We bought a new washer/dryer from the brick. According to the statement if we made the minimum payment of $60 it would take 26 years to pay off $2500. That is $18,720 for a washer dryer that would be at the dump before we were half way through paying for it. I used the 90 days/no interest plan and made 3 payments to clear it to zero but some people will make that minimum payment.

 

[petros]

Is anyone curious of where the Action plan money is coming from?

 

[PoliticalNick]

Is anyone curious of where the Action plan money is coming from?

It is borrowed. They are hoping our grandchildren will figure out a way to pay it back somehow.

 

[petros]

It is borrowed. They are hoping our grandchildren will figure out a way to pay it back somehow.

Borrowed or it's partial payment from a customer who wants to buy Canadian goods but insists these cash payments goes to infrastructure first so they can get the good they bought out of Canada?

 

[relic]

And how many millions of the "action plan"money is spent on BS adds telling us how great the torys are?

 

[petros]

And how many millions of the "action plan"money is spent on BS adds telling us how great the torys are?

I don't know. How many? There were Action Plan ads under Liberals and now under Cons.

 

[Locutus]

Maybe we need to shut down the 'action' hat and 'action' vest factories. Those things are everywhere when you need to buy some action and make people feel good. ;-)

Fill-in or make-bigger?

Action cheques will be available after work today men.

 

[Machjo]

THE IMF has held up its hands and admitted it got it wrong when calculating the effects of austerity in Ireland.

The organisation said that it completely underestimated how the Irish economy would perform under strict spending rules.

The International Monetary Fund (IMF) said in an academic report that it believed for every €100 of austerity through higher taxes and spending cuts -- this would impact €50 in terms of growth and unemployment.

However, the real effect meant that the austerity cut €90 to €150 out of the system.

The admission is likely to make Finance Minister Michael Noonan's job far more difficult ahead of yet another austerity budget in December.

The IMF said there was an overall drop in incomes due mainly to increases in taxes and austerity measures in Ireland.

This ultimately served to push up poverty levels and squeeze the middle class.



We got it wrong on austerity and made things worse - IMF - News, Frontpage - Herald.ie

So it's only the degree they got wrong. The direction they got right. Of course austerity makes you poorer, but it's a stable poverty on a solid foundation as opposed to an unstable wealth on a weak foundation.

Also, if everyone in the country becomes poorer, then it's not so bad since infrastructure will react accordingly: cities building fewer highways and more walking and cycling paths, etc. It might even turn out well for the poor as infrastructure gears itself towards their best interests rather than those of the upper classes. it will restructure the country towards sustainable efficiency. Honestly, after restructuring, I won't be surprised to see Greece and Ireland coming out as European powerhouses of sorts once they're fully retrenched. They'll be used to austerity by then, making them lean and efficient economies.

It is borrowed. They are hoping our grandchildren will figure out a way to pay it back somehow.

Plus interest!

 

[tay]

The errors in forecasting the unemployment rate are described as "large and significant".

The economists also studied the GDP forecast errors of four groups. They found that the IMF had the highest level of error followed by the European Commission, the Economist Intelligence Unit (privately owned), and the OECD.

The economists conclude that more work is needed on how the effects of government spending change with time and economic conditions.

Finance Minister Michael Noonan said he had not yet seen the report but that the question of too much austerity had been raised by the IMF before, and it was always a consideration for any finance minister.


IMF Statement

IMF: We got effect of austerity wrong | Irish Examiner

 

[captain morgan]

The IMF didn't get Ireland into to trouble to begin with.

 

[SLM]

Maybe we need to shut down the 'action' hat and 'action' vest factories. Those things are everywhere when you need to buy some action and make people feel good. ;-)

Fill-in or make-bigger?

Action cheques will be available after work today men.

My goodness! None of these men have shovels!

Whatever did they lean upon whilst watching the one guy work?????

Austerity is one thing but this is madness!8O

 

[petros]

My goodness! None of these men have shovels!

Whatever did they lean upon whilst watching the one guy work?????

Austerity is one thing but this is madness!8O

A joke from back in the day...

A city worker is leaning against his shovel when a dog comes along and pisses on his leg. The city worker looks down at the dog and says "If I had another shovel, I'd hit you with it".

 

[captain morgan]

A joke from back in the day...

A city worker is leaning against his shovel when a dog comes along and pisses on his leg. The city worker looks down at the dog and says "If I had another shovel, I'd hit you with it".

Two city workers were working for the city public works department. One would dig a hole and the other would follow behind him and fill the hole in.



They worked up one side of the street, then down the other, then moved on to the next street, working furiously all day without rest, one man digging a hole, the other filling it in again.



An onlooker was amazed at their hard work, but couldn't understand what they were doing. So he asked the hole digger, 'I'm impressed by the effort you two are putting in to your work, but I don't get it -- why do you dig a hole, only to have your partner follow behind and fill it up again?'



The hole digger wiped his brow and sighed, ........


'Well, I suppose it probably looks odd because we're normally a three-person team. But today the guy who plants the trees called in sick.'

 

[damngrumpy]

The biggest problem is it does not matter how many action plans we have or don't have.
Yes the biggest problem is so far they have been able to hide the truth from the citizens
of the world. We are quite simply all broke period. If that truth ever came to light the
result would be civil unrest to mere panic. The financial forces of governments on the
international scale have a finger in the dike, trying to hold the inevitable back while they
collectively find a way out of the mess we are in.
Think about it, on Syria, Iran, North Korea, the Sudan, and a host of other places we see
various positions and diplomatic spats that amount to little or nothing. On the financial
front these days there is barely a whisper and little friction. The reason is they are all scared
the truth will come out, in fact they are more terrified than an errant priest or a miscreant
Boy Scout Leader. Austerity works only if the collective society embraces it.
Today we have governments embracing austerity while banks send out letters increasing
consumer credit card debt. The reason is simple, everyone is broke and borrowing more is
the only way consumers can keep consuming. Our economy in general has become the greatest
Ponzi Scheme in world history

 

[captain morgan]

The biggest problem is it does not matter how many action plans we have or don't have.
Yes the biggest problem is so far they have been able to hide the truth from the citizens
of the world.

The truth is that this is what happens when you spend more than you make.... Period.

The austerity measures are unpopular in places like Greece because the plans call for a balance between income and spending. The USA will have their form of 'austerity' just like Canada and the rest of the world, but at the end of the day, the 'consumers' in all of the aforementioned countries were more than happy to accept the graft up front and now that it's time to pay the piper - everyone is all upset.

 

[PoliticalNick]

The truth is that this is what happens when you spend more than you make.... Period.

The austerity measures are unpopular in places like Greece because the plans call for a balance between income and spending. The USA will have their form of 'austerity' just like Canada and the rest of the world, but at the end of the day, the 'consumers' in all of the aforementioned countries were more than happy to accept the graft up front and now that it's time to pay the piper - everyone is all upset.

This is the culmination of many, many years of deficit budgets coupled with the debt-based currency. This is why we really do need a constitutional amendment making it illegal for any govt to operate a deficit of any kind with the exceptions of national disasters and someone declaring war against us.

 

[tay]

My goodness! None of these men have shovels!

Whatever did they lean upon whilst watching the one guy work?????

Austerity is one thing but this is madness!8O

I call BS on the pictures. That is a class of Civil Engineers getting a real view of what they have/or will do.



As former billionaires shuffle through the criminal and bankruptcy courts, the Irish public is gasping at the extremes of deceit, cronyism and hubris that pushed the country into a massive bail out from the IMF and European Central Bank – and an interminable recession under suffocating austerity measures. At the center of current attention is sixty-six year-old Sean Quinn — once dubbed the “The Mighty Quinn”– and recently deemed to be worth $6 billion, but now bankrupt and struggling to stay out of prison.


more

The Law Closes In On The Richest Man In Ireland--The Billionaire Mighty Quinn - Forbes

 

[captain morgan]

This is the culmination of many, many years of deficit budgets coupled with the debt-based currency. This is why we really do need a constitutional amendment making it illegal for any govt to operate a deficit of any kind with the exceptions of national disasters and someone declaring war against us.

Debt based currency is one thing.. It's the unrestricted use of debt as a means to fund society that has landed certain nations in this mess; that is the real problem.