tag:blogger.com,1999:blog-8817171247555815363.post517129945658563998..comments2024-03-26T05:57:44.937+00:00Comments on True Economics: Economics 22/11/2009: News Flash - our taxes are already killing FDITrueEconomicshttp://www.blogger.com/profile/07350536454228478974noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8817171247555815363.post-4963356170284573962009-11-25T21:09:28.657+00:002009-11-25T21:09:28.657+00:00Hi Constantin,
Bank of Ireland said today they wo...Hi Constantin,<br /><br />Bank of Ireland said today they would not need new capital post NAMA-<br />contrary to your analysis that they will need two billion euro.<br /><br />One last point Constantin, I see Brian Lenihan is going after David<br />Drumm- notice the "timing" he picked. I wonder is it to distract the<br />public's anger and fury over Lenihan's surrender to the appointment of<br />Colm Doherty at AIB<br />but where the hell is Sean Fitzpatrick.<br /><br />Regards,<br />Patrickpatrick1978https://www.blogger.com/profile/09173078693875805958noreply@blogger.comtag:blogger.com,1999:blog-8817171247555815363.post-41746607441115765652009-11-24T07:14:54.864+00:002009-11-24T07:14:54.864+00:00Not exactly, this does show that stimulus will not...Not exactly, this does show that stimulus will not work in Ireland, true, but it also shows that any deficit financing scheme will not work in Ireland. Our public spending today is deficit financing. In other words, you have to look at the current levels of spending by the State as if they represent a stimulus. You can also directly price the true economic cost of the current deficit financing - which is a net cost to the economy at the moment of issuance of new debt and will continue to be the cost to this economy through its entire life. Alternatively, you can think of deficit financing of the ongoing spending as an opportunity cost. Private consumption multiplier is in excess of velocity of money, or at least x2 to x3. Public spending multiplier is significantly less than 1 in most of the economies in the short run, while for an economy like Ireland it is negative. Every euro spent by the state today that is deficit-financed, therefore, represents a massive loss to this economy as it:<br />(1) generates direct loss through a negative fiscal multiplier, and<br />(2) generates a negative effect on private consumption.TrueEconomicshttps://www.blogger.com/profile/07350536454228478974noreply@blogger.comtag:blogger.com,1999:blog-8817171247555815363.post-74360470868627495762009-11-23T08:25:44.972+00:002009-11-23T08:25:44.972+00:00Hi Constantin,
So basically you are saying that s...Hi Constantin,<br /><br />So basically you are saying that stimulus wont work in Ireland. However, are you worried about the effect the proposed cuts will have in terms of deflation, increased unemployment etc?<br /><br />BAnonymousnoreply@blogger.com