With the Budget looming, a range of opinions are being aired about the relative importance of tax increases versus spending cuts. This post attempts to put Ireland’s public expenditure in perspective, by comparing the size of our Government, relative to the economy, with that of our European neighbours. It finds that Ireland’s government will, in all likelihood, be the largest in Europe in 2009. Read more
This post asks whether Ireland is in a recession or a depression, using the metric of jobs lost. It compares losses in Ireland with those in the US now and in the US during the Great Depression, and finds that – with almost one sixth of its private sector gone – Ireland is in indeed a jobs depression. Come the new year, it will be time for our jobs crisis to take centre stage as its cost to society is easily as large as NAMA or the public finances. Read more
This post examines three key assumptions underpinning the assertion that NAMA only requires a 10% rebound in property values in 10 years to ‘wash its face’. It looks at the importance of measuring the fall right, questions the yield given for NAMA’s loan book and raises the possibility of any yield correction coming through downward rent adjustment, not a rebound. Read more
This post looks at the numbers behind NAMA in more detail, producing estimates of how much is in different segments of Irish and international property markets. It also critiques the calculation of long-term economic value, which turns out to be based on about 5% of the loan book, and presents revised estimates based on a broader sets of loans and more realistic assumptions. Read more
This post sets out the key facts about NAMA, as per the Department of Finance’s supplementary information, published on Wednesday. It goes through the amount lent, the number of deals, the loan-to-value, the estimated fall from peak so far and NAMA’s proposed ‘plateau’ level, before raising some issues to be dealt with in later posts. Read more
This post reviews some initial evidence from the 250 respondents so far to the poll on expected income changes in 2009. About 60% of respondents expect their income to fall this year compared to last. A breakdown by sector and by income level shows that across five broad sectors of the economy, lower paid workers are being spared the worst income cuts. In ICT, wages are expected to be static for the typical worker, regardless of income group. Read more
With the global recession being just a coincidence for Ireland, whose exports have actually grown this year, what will the likely impact of any global recovery be? This post explores two sets of scenarios, a global dream/snooze/nightmare and a domestic equivalent. Given the nature of Ireland’s economy and its exporting sector, even a global dream recovery is likely to have little economic impact in Ireland. It’s the domestic consumer that will drive our next phase of growth. Read more
This post reviews Ireland’s relatively sparse wage data for signs of a real devaluation (or not), before discussing some of the problems in waiting for official data. To light a candle, rather than curse the darkness, the post includes a short poll for readers to complete, on employment and earnings. A successful take-up of the poll would be a real contribution to the debate on earnings in Ireland. Read more
The increase in the Live Register since the start of the year has been as large as the change in the previous 18 months. The first six months of 2009 were not just a repeat of what had gone before though. This post examines the numbers in detail and highlights two trends in particular: the growth of female unemployment and the growth in urban unemployment. Read more
Last week, over 200 people filled out a simple quiz on Ireland’s tax system. The results are revealing. As one might expect, people think the system is far less progressive than it actually is and that the typical worker is paying a significant amount more in tax than they actually are. Perhaps the more surprising result is the broad consensus across all groupings about what the tax burden on typical workers should be: 23%, rather than the current 4%. Read more