Duncan’s Economic Blog

Some Links & More on Ireland

Posted in Uncategorized by duncanseconomicblog on December 8, 2009

Hopi Sen has a wonderful post on ‘class war’.

James Purnell & Graeme Cooke’s FT Article is worth a read.  Anyone especially interested in the Government Jobs Guarantee idea should probably also read this 1997 paper from L. Randall Wray.  

Freethinking Economist has an interesting post on credit ratings agencies.

Finally, I liked this Bloomberg Story.

I’ve been arguing for a while that if one wants to see Tory economic policy in action one only needs to look at Ireland.  As Osborne continues to demand immediate spending cuts, he should consider:

Dec. 8 (Bloomberg) — Irish government spending cuts aimed at reducing the budget deficit may end up sacrificing long-term economic growth, according to Michael O’Sullivan, head of asset allocation at Credit Suisse Private Banking.

Arguably the Irish bond market is being saved at the expense of Irish society,” O’Sullivan, 38, author of a 2006 book on Ireland’s economy, said in an interview at Bloomberg’s London bureau. “By cutting spending you lower the trend line of growth and store up bigger fiscal problems down the line.”

(My emphasis)

3 Responses

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  1. dannyboy said, on December 8, 2009 at 11:54 am

    Glad to see some more neo-chartalist ideas getting an airing.

    The reason the right don’t like them is because unemployment is required for firms to make a profit. At full employment wages would get bid up to the point profits are non existent.

    With regard to the job guarantee, if growth is flat or negative for long periods which seems likely, the number of jobless it may need to absorb is likely to be very high. How is this to be afforded?

  2. David Heigham said, on December 8, 2009 at 4:28 pm

    A ‘Government Jobs Guarantee’ sets the alarm bells ringing in the Deaprtment of Unintended Consequences (always exempt from efficiency cuts because it is the one Department of Government that never has any staff). Could it possibly be that a mass of new low paid workers will predjudice the already uncomfortable position of other low paid workers? and distort the labour market?

    But people who are persistently unemployed do need both current occupation and current income. They will also benefit from any measure which gives them a better chance of getting and keeping a job in future. An answer, as various Scandinavian governments seem to have realised, could be to pay the persistently unemployed while they train and educate themselves to improve their human capital. What our Governments can, and in my view should, do is offer a guarantee of this from of occupation and income.

  3. newmania said, on December 10, 2009 at 11:19 pm

    By cutting spending you lower the trend line of growth and store up bigger fiscal problems down the line.”

    I see , well lets spend lots and lots more then.. come to think about it we should obviously have started long time ago when that pesky 40% rule prevented us having a Party for ten years instead of going to work . Wheres the down side , can`t see it myself , its good for the Economy aint it ?
    I’m just so grateful that we got ourselves into a spot where we are spending £5 for every £4 we get in so all this fabulous borrowing has some excuse ( as if it needed one ..hic pass the Champers )
    Does it concern you at all Duncan that the Polly Anna Ecomonic pundits may klook so silly that they /you will become comical? Ridiculous , hated even when the dreadful day of reckoning comes ?
    Does ayone seriously think there is the smallest chance of Darlings revenue projections actually arriving they never did in the good times when asset boom quids were plumping up the swag bag.How is that going to be replicatd and even if it was why would revenues that came from one sort of a boom be replicated in what would have to be an entirely diffrent boom ?
    Are you going to defend the tax hike on jobs …oh sorry Nat Insurance , the almost criminal bribe to the old ? Can you not admit that we would have been far far better off if we had not over borrowed ,sacrficed growth for high taxes and fatted up the least useful bit of the Economy on the basis they vote Labour.

    Heck why not defend “Evil” ands really test your powers of distortion, this is too easy


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