Hairy Statistics

In 2007 the Irish Government owed under 30% of GDP and around 30% of GNP and since then the debt has inexorably risen.

Today GNP is around €140bn and falling
Today GDP is around €160bn and static
Today Government debt ( ex Nama) is €90bn and rising
Today Government Debt ( including Nama) is around €103bn and rising

GNP is falling at a rate of 10% per annum and will be under €130bn by the end of 2011

At the end of 2011 Government debt ( ex Nama) will be €110bn and rising
At the end of 2011 Government debt ( including Nama) will be at least €130bn and rising

All of this excludes any further bank recapitalisations to those such as INBS or AIB who will be around with the bucket long before end 2011. Anglo is also excluded. I have no idea what that POS will cost us :frowning:

All of this excludes the following.

Today the Irish Consumer owes €150bn on Mortgages or 116% of GNP

**By end of 2011 the total debt held by the Irish consumer on Mortgages and the Total debt of the Irish Government, ADDED TOGETHER will be at least 225% of GNP and Possibly 250% of GNP. **

In 1987 the sum total of Mortgage Debt and Government Debt Together NEVER Exceeded 150% of GNP.

At what point does a debt spiral kick in?

Are we now or very soon to be totally insolvent?

It doesn’t apply to a sovereign, even in the case of a genuine default, everything will just be restructured on the never never and we’ll end up renegotiating till the cows turn into zombies.

That’s gross debt though. The state still has the NPRF and other assets like the ESB, Bord Gais, etc.

We could end up repossessed by the germans.

Assuming GDP and govt debt of €130bn, and borrowing costs of 6%, Ireland’s economy needs to increase by 6% per year to avoid a debt spiral.

Of course you should also include consumer debt in the calculation, which would bring the required GDP increase to something like 12% per year.

Tut, tut. GDP includes both government and private sector.

Of course, what you’d need on the private side is for both state debt service (taxes), deficit reduction (taxes) and private sector debt reduction (interest and principal payments) to increase without that somehow reducing consumer spending… eh, incomium leviosa…

Hasnt the NPRF been tapped on the current debacle.

Either way, isnt it under-funded and actually a liability too?

Some of it has, most of it (€20 billion-odd) hasn’t. If the government were able to throw €7 billion on it into Irish banks, then I’m sure there would be no problem buying Irish sovereign debt with its.

You’re also assuming that all of our debt is financed at 6%, this isn’t true (our existing 10-year debt is at much lower levels, plus there is short-term debt too).

Ahem, that would be closer to 17 bn odd…

Not sure what you are saying here. Are you agreeing or disagreeing that private debt should be included?

And incomium leviowhatnow?

If GDP grows at 6% it grows at the same amount, in theory, for public and private incomes, absent one gouging the other. Even if I’m wrong (which I likely am!) you can’t just add one to the other :slight_smile:

It’ll take Harry Potter and one of his whizzy spells to get GDP growth back up to 6%…

But I was adding the private debt to the other side of the equation. On the left you have [GDP], on the right you have either [Govt Debt], or else [Govt Debt + Private Debt].

I think comparing [GDP] to [Govt Debt + Private Debt] makes more sense. Therefore GDP needs to be increasing at more than 12% per annum just to pay for the interest on our debt.

Deathus Spiralus Bankruptious.

Drat. I don’t have the counter-spell for that curse…

Fair enough on your method…

Holdum Nervous!

I said ‘Holdum Nervous’!!


At what point is Bertie going to ride in to the Treasury Building, take the NPRF and bet it on the geegees?

I heard they were already working on plans to ship Metro-North to Berlin.
Iarnrod Eireann will be retained to ensure it runs on time (natürlich).