The National Debt


#1

The national debt was 50 bn before the Quinn/Anglo/ Fitzpatrick bailout

After the farce in anglo brian lucey is saying

*“I would suspect that as time has gone on it has become abundantly clear that there are so many unexploded land mines in Anglo that the government had to throw something on it,”

“Unfortunately they have thrown the Irish economy onto these exploding bombs … So, we have seen as a minimum I think a doubling of the national debt as a consequence of this”*

And we havent gone near Irish Nationwide, BOI, AIB yet :imp:

So say the national debt hits 100bn pretty shortly thats a drain of at least5-6bn in interest per year. Are we going to have to borrow to pay the interest? That sounds like default

that bloody guarantee is the end of us

of course as we all part of the knowledge economy now after primetime on weds and have 5 loaves and 2 fishes we are fine


#2

Please Note: This is now the defacto thread for all things relating to the National Debt. Carry on :confused: .


#3

Ah sure it’ll be grand, Steorn has that invention for free energy in the pipeline.


#4

https://www.ntma.ie/ButtonGIF/2008/GIF/ggd_gdp2.gif

Debt to GDP ratio was 41% last year and the government estimate (according to The Guardian) 53% this year.


#5

https://www.ntma.ie/ButtonGIF/2008/GIF/deb_trend.gif

Not a big fan of relating things to Irish GDP (or even GNP).


#6

I don’t understand how all the liabilities of Anglo will not be considered part of the national debt, that is, why would all 110 bn of liabilities not now be national debt?

Consider, 50 bn is depositors money and 20 bn is institutional deposits. If any of these people want their money back, Anglo (and so now the government) has to pony up.

Add to this the NAO (National Audit Office) in the UK ruled that all Northern Rock and Bradford & Bingley’s liabilities had to be added to the UK national debt.


#7

During the American Depression of the '30s, US GDP fell from approx. 103.6 Billion to approx. 56.4 billion that’s over 45% of a fall. Our ratios are going to look horrendous if we have falls in GDP of that scale (Which I suppose is not inconceivable).


#8

Constantin lets fly:
trueeconomics.blogspot.com/2009/ … tings.html


#9

Thanks to our nationalisation of the zombie Anglo Irish the cost of issuing NEW debt is now 2% ( 200 basis points) more than German debt . The spread was about 20 basis points a year ago and 69 bp in October .

Two years ago it was 3bp . We have had the same triple A rating as Germany for quite some time .

You will see an interesting analysis of the early part of this spread widening here ( with charts and tables even)

cib.natixis.com/flushdoc.aspx?id=43047

Even GREECE can issue cheaper debt that we can :frowning:


#10

Pity Lenihan doest listen to any advice from anyone…


#11

Mr. Lenihan, on The Right Hook doesn’t accept that the 100bn of Anglo’s debt should go on the state’s national debt, as there are performing assets covering the debt, or ‘repaying’ it, as he says. We’ll see what the rating agencies and the debt markets say, I guess.


#12

I’m not going to back up FF here, but in all seriousness suggesting 100% of Anglo’s debt should be put onto National Debt is a bit knee-jerk imo. I dont know the ins and outs of the UK’s decision re NR and B&B but the highest bad debt figure I’ve seen bandied about so far is 30% meaning 70% of the loan book still has value, no? My point here being not what percentage of the loans will go bad, but that those loans still have some value.

On the other hand, from the FT yesterday (sorry no linky):

Right, time for scoops


#13

i am assuming 50bn bad debt


#14

I agree on 50. I see it as EUR 20 bn Anglo [out of EUR 72 bn loans] plus EUR 15 bn each for AIB and BoI.

I fear AIB and BoI are about to go the wall very quickly.
The 25% drop in AIB’s share price and 16% in BoI today cannot be considered just ‘volatility’
All investors, institutional and international, are bailing out, very fast from both AIB and BoI.

We cannot afford the 50 bn.
The IMF will not get involved, as they will say it is up to the EU.
The EU has no centralised mechanism to fund us and we are not flavour of the month, anyway.
Maybe the EU can invent some mechanism to protect one of its member states - but currently it does not exist.

Put it any way you like, Ireland is bankrupt.


#15

its not an issue of the politics. its an issue of accounting and the key is what eurostat/cso say the treatment is of the debts.


#16

we can afford 50b. It wont bankrupt us. But its gonna hurt.


#17

'xactly - that’s why I keep quoting the lead from the NAO in the UK.

The assets of the bank will go on the government’s balance sheet, along with the debt, but that is separate to the national debt calculation.


#18

A yes vote in Lisbon 2 would be worth how much, at a guess?


#19

now…kevin cardiff, second secret in he dept of finance is an ex-cso guy…hmmm. Any national income statisticians on the pin?


#20

Forgive me, but I think the off-balance sheet accounting trick has had its day. Don’t you?
Sooner or later government bonds will be issued to cover banks bad debts.

We, and the markets, know this. We just don’t know how big the debt tsunami is, but its coming.

I can tell you what is going on in homes of people all over the country. People with means are thinking,
Fuck me, I don’t want anything to do with these losers. I am moving to my place in France, or buying
a pad in Berlin. I am getting as far from the irish tax net as I can.

There is going to be a flight of capital, both human and financial.