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Live Blogging the Irish Budget

by Frank Schnittger Tue Dec 7th, 2010 at 09:28:14 AM EST

The draconian budget due to be implemented as part of the ECB/IMF bail-out is due to be delivered at 3.45 pm today.  The media is full of speculation as to what it will contain and its broad outline was in any case published as part of the four year plan agreed with the IMF/ECB.  In round figures this provided for a 2011 Budget reduction of €2 Billion in current expenditure, a €2 Billion reduction in Capital expenditure, and a €2 Billion increase in taxes.  These figures may seem small by European standards but must be seen in proportion to Irish GNP as a whole which is already down to c. €130 Billion.  In other words the total €6 Billion "adjustment" amounts to c. 5% of GNP with the cumulative impact of the 4 year plan is estimated as being equivalent to 18% of GNP.

The Capital expenditure reductions will have a direct impact on employment levels and both the current expenditure reductions and tax increases are overwhelming targeted at the poorer sections of society.  Few will be fooled by a very few token reductions aimed at high earners - in practice only a very few high earners - by a cap on public sector pay at €250k and token reductions for senior politicians.  The vast bulk of the expenditure reductions will come from a reduction in social welfare payments, pensions, child benefits, minimum wage, and public sector numbers and pay generally.  Most of the tax increases are targeted at low earners ("a widening of the income tax base"), students (fee increases), and pensioners (abolition of tax allowances).

It is looking increasingly likely that the Budget will be passed by a narrow majority thanks to the Government buying off a couple of right-wing independents with promises of largesse for their local constituencies (funding for a casino, a local hospital and a ring-road etc.).  The dysfunctionality of an electoral system based on small constituencies rewarding candidates for the delivery of local largesse (earmarks in US parlance) as opposed to their ability as national legislators and leaders has never been more glaring.  Their support also makes it unnecessary for Fine Gael to abstain on the budget and thus enables them to avoid being tarnished by its more glaring inequalities.

Fine Gael will probably now lead the next Government and give us a minor variation of the same - with Labour performing their usual role of propping up a Fine Gael Government much like the Greens propped up the current Fianna Fail administration.  The Catholic tradition of self-mortification seems to be alive and well.

I will add further details of the budget below the fold as they emerge.


Key points:

1. 4% reduction in social welfare rates

2. €10 per week per child reduction in child benefits

3. Public service job loses to be ameliorated by "work placement schemes" for the unemployed presumably on minimum wage.

4. 4% reduction in public service pensions above 12k p.a.

5. Future public service pensions based on average rather than final salaries, retirement age to be raised, and increases to be based on retail prices rather than public sector pay.

5. €250K p.a. ceiling for all public servants - top Judges etc. - for NEW appointees only.

6. Property based tax reliefs to be phased out

7. Some tax reliefs on pensions to be phased out.

8. No change to 12.5% Corporate tax rate

9. Temporary reduction in air travel tax and incentives for airlines adding routes

10. Online betting to be taxed at same rates as phone and retail betting. (How will this be enforced on betting sites outside Ireland?).

11. Minor increases in tax on petrol and diesel (why is this very efficient and progressive form of taxing so underused?

12. No increases tax on drink? Well done to the drinks industry lobbyists...

13. Car scrappage scheme retained. - described by one economist as being about as economically useful as a Gucci handbag scrappage scheme

"We will defend our 12.5% corporate tax rate against all comers..."

'nuff said...

Display:
There are 15 satellite trucks outside Leinster House (The Irish Parliament) indicating that there appears to be quite a lot of international media interest in the Budget and its outcome.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 10:09:04 AM EST
The first part of his speech is a paean of praise to the real economy. So why the need for a bail-out?

No admission that it was his stupidity in bailing out private banks...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 10:50:47 AM EST
The man is a fuckwit.

He just said that the mistake was trying to spread the benefits to everyone. Stupid us.

We'll ignore that inequality rose rapidly during the boom, will we?

Oh, I can't do this without booze and loud, shouting and cursing.

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 10:55:00 AM EST
No reduction in state pension, in the hope that some of the befuddled old people will continue to vote for us.

Cutting social welfare by 4% because the problem with the economy is that welfare provision has been too generous. Our aim is economic growth AND IMPROVED COMPETIVENESS!

Yes, boys and girls, it's fucking COMPETIVENESS time.

Which is to say, making the poor hungry enough to work.

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 10:57:53 AM EST
[ Parent ]
And an internship and work placement scheme.

(The street to the Dail has been closed to traffic by a force of 40 police. I believe this is to protect the Dail, not a coup in progress, though I suppose we can hope.)

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 11:00:41 AM EST
[ Parent ]
Ha.

Reducing the Taoiseach and Minister's pay by a big chunk.

Next year.

When the chances of any of the current crop having to worry about it are pretty minimal.

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 11:03:46 AM EST
[ Parent ]
8% of earners pay 60% of tax,

HOW MUCH OF THE FUCKING MONEY DID THEY MAKE??? NO ONE EVER MENTIONS THAT, DO THEY?

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 11:09:01 AM EST
[ Parent ]
You have to compensate entrepreneurship, for that's the engine of the economy.

Get with the program, Colman.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 11:15:43 AM EST
[ Parent ]
I've added some key provisions to the diary below the fold - refresh!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:16:41 AM EST
Ok, now I'm just shouting at the screen.
by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 11:27:34 AM EST
[ Parent ]
We will defend our 12.5% corporation tax rate on the beaches ...
by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 11:29:31 AM EST
[ Parent ]
'nuff said....

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:31:10 AM EST
[ Parent ]
You cannot cut and tax your way out of a recession...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:33:08 AM EST
The hubris of a small country guaranteeing 450 Billion in bank bonds

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:33:55 AM EST
[ Parent ]
when bank debt became national debt the position became unsustainable and Ireland has become insolvent as a direct consequence - do members of the Government ever feel ashamed?

You have grovelled to your masters in Brussels and Washington - as if you had been waterboarded - or indulged in the gombeen cap in hand mentality thinking you would be given 85 Billion for nothing

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:37:50 AM EST
[ Parent ]
Nothing done for people in negative equity...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:51:35 AM EST
[ Parent ]
Debt slavery...

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:07:23 PM EST
[ Parent ]
The government could still default on that guarantee. And restructure the banks.

Does the Irish treasury have the cash in hand to guarantee all the bank deposits up to €100k per person per institution, or don't they?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:06:28 PM EST
[ Parent ]
No, but they can borrow it for 6% from the Germans.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Dec 7th, 2010 at 12:09:52 PM EST
[ Parent ]
The whole point of the ECB/IMF package is that the Irish are not allowed to even consider default any more.  Thus no credit if they do default.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:13:14 PM EST
[ Parent ]
They really ought to just default.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Tue Dec 7th, 2010 at 12:15:53 PM EST
[ Parent ]
The ECB is evil.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:24:01 PM EST
[ Parent ]
Delendum est Vadum Francorum?

Google finds only eurotrib references

Frankfurt is laid low?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:44:09 PM EST
[ Parent ]
by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Dec 7th, 2010 at 01:12:16 PM EST
[ Parent ]
So should it not have been Vadum Francorum delenda est?

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 01:40:02 PM EST
[ Parent ]
The way Melanchthon put it in the comments was ceteris censeo Vadum Francorum delendum esse. Vadum Francorum is neutral while Carthago is feminine.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 01:49:15 PM EST
[ Parent ]
The ECB is the lender of last resort - not the Irish taxpayer

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:44:04 AM EST
A reverse natural selection will apply.  Anyone who can leave the country, will, and generally it will be those who are best qualified and who could have made the largest contribution to Irish recover

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 11:46:05 AM EST
[ Parent ]
Who's the pundit?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:05:03 PM EST
[ Parent ]
Constantin Gurdiev - TCD economist - I think - I've switched channels

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:07:15 PM EST
[ Parent ]
Dr. Constantin Gurdgiev

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:10:28 PM EST
[ Parent ]
Well, I'm also a pundit since I'm a blogger, and I also have a Ph.D. So...

The lender of last resort is still a national function - it is the Central Bank of Ireland that is the lender of last resort, not the ECB, not the European System of Central Banks.

The Irish Central Bank is owned by the Irish Treasury.

Normally the Irish Central Bank would be able to issue base money in sufficient amount to capitalise itself if necessary (for instance, after restructuring the entire Irish banking sector under a Good Bank model). The Irish Treasury might also be able to capitalize the central bank or restructured commercial banks. Unfortunately, EU treaty rules would prevent the Central Bank from monetizing Treasury debt used to capitalize lender of last resort/restructuring operations.

In addition, the Irish Central Bank may be hamstrung in its ability to issue base money by its obligations to the ECB/Eurosystem or actually by statute.

In any case, the combined Irish Central Bank/Treasury might well be insolvent. In that case, it would appear to be for the ECB to restructure and for the EU's combined mamber states tresuries to recapitalize the Irish Central Bank.

Or Ireland could simply default on its obligations to the ECB/Eurosystem.

See my diary Can the Eurozone National Central Banks create fiat Euros by themselves? for quotes, references and links...

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:21:41 PM EST
[ Parent ]
Thanks - I'll read it when I get a chance.  I never wanted to be an expert on banking, but it seems to be a survival imperative now

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:28:49 PM EST
[ Parent ]
No, it's not a survival imperative.

But it helps to know just to what extent the whole thing was preventable, and by whom.

So one can lay the blame properly when talking to the grandchildren about their poverty.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 12:34:20 PM EST
[ Parent ]
If Ireland is to survive it needs to get a lot smarter in dealing with the global financial "community"

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:45:51 PM EST
[ Parent ]
I came to the conclusion that I had to understand finance and the economy just before I started lurking on ET, back in early 2008. Hope you move through the learning curve faster than I have!

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 01:29:50 PM EST
[ Parent ]
There's nothing to understand: it's armed robbery.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Tue Dec 7th, 2010 at 01:32:59 PM EST
[ Parent ]
Yeah, but I have learned a lot about how to rob a bank. Unfortunately, I can't afford to own one.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 01:56:23 PM EST
[ Parent ]
Mothers and Children paying for the sins of bankers...

Health and children and social protection take a hit of 1.6 Billion out of total cuts of 2.1 Billion

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:05:44 PM EST
Treason?

Given away National Sovereignty
IMF only here to bail-out bankers - not the Irish people
selling out the Irish people for a Casiono in Tipperary

Health service taking one third of entire hit - 700Billion
morally wrong
economic sabotage
what did children, students ever do to you?
prolonged cycle of recession

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 12:50:23 PM EST
Pearse Doherty is sounding a lot more impressive than the much more "experienced" FG and Labour spokespeople - and representing popular anger much more effectively

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 01:02:24 PM EST
[ Parent ]
No wealth tax, no higher rate of income tax - flat taxes are the new norm.

Social welfare rates have been reduced - allegedly because of negative inflation - when the cost of basic essentials has actually increased

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 01:10:44 PM EST
[ Parent ]
a 48% higher tax rate would have brought in 400Million
a wealth tax on assets above 1 million would have brought in a similar amount
a 100K p.a. income ceiling for public servants would have saved 400 Million
even after the cuts Brian Cowen still earns more that David Cameron

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 01:13:43 PM EST
[ Parent ]
He's really getting under the skin of Mary Coughlan, Tanaiste - who has made some intemperate responses

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 01:14:30 PM EST
[ Parent ]
Sounds like the advantage of not having adapted the language to the dominant frames.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Tue Dec 7th, 2010 at 02:18:44 PM EST
[ Parent ]
I'm beginning to like the idea of Labour acting as senior, moderating, partner to Sinn Fein in government.

I think I'd like to see Gerry Adams leading the negotiating team for a talk about restructuring the rescue.

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 02:21:23 PM EST
[ Parent ]
Only problem is Gerry Adams is economically illiterate... but as Foreign Minister he could be an interesting appointment...

But I agree - a Labour/Sinn Fein government could be quite effective - is Ruairi Quinn still available for Finance Minister? They could transform the frame and are much closer to the popular mood atm.

Only problem is I am extremely doubtful they could get a majority - even if the Red C poll is accurate.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:29:09 PM EST
[ Parent ]
Budget will deflate economy by 1.5%
What growth there will be will be export led which is not very employment intensive
some of the savings are once off sale of state assets
property tax will have to be a significant part of future revenue but the budget doesn't progress this

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:12:14 PM EST
"Export led" growth puts you in direct competition with China and India. Meaning:

A.  Wages, and that apart of the economy (70%? - don't know about Ireland,) such as house prices, rents, etc. dependent on wages.  

B.  Suggesting this is only the first loop in a downward financial spiral.  House prices, for example, were, I assume, aligned to the wage rate and Cost of Living.  As the wage rate drops the ability of the people paying the mortgage to afford to continue to pay drops.  Eventually, the mortgage payment cannot be met and the stream of cash of those payments will no longer flow to the banks, etc.  Driving the "assets" (sic) on the banks, etc., Balance Sheets further into the Non-Preforming category.

shrug

It's a recipe for disaster but then that seems to be the goal.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Tue Dec 7th, 2010 at 02:40:09 PM EST
[ Parent ]
Me brain goes faster than me fingers!

"Wages, and that apart of the economy (70%? - don't know about Ireland,) such as house prices, rents, etc. dependent on wages must trend to Chinese and Indian norms as well."

 

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Tue Dec 7th, 2010 at 02:42:32 PM EST
[ Parent ]
The logic of globalisation in a world with a huge oversupply of labour

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:46:05 PM EST
[ Parent ]
Yup.  

Of course the dummies at the financial institutions and their whores (politicians) can't grasp the "B" part.  

It does get real simple:  if people can't pay, they won't.

And when they won't pay, cuz they can't, the banks will discover the underlying "asset" (sic) is worth only what they can get for it.  Which is a bunch less than what they lent.

The reality is we are in a Global Financial Melt Down, the global financial institutions are bust, the world is in the shitter, and it's only a question of time before it all goes to hell.  

IF the Decision Makers would deal with Reality rather than trying to prop-up a failed system we could get through this thing quicker and More Better.  At the cost of bankrupting the global elites.  Since the global elites ARE the Decision Makers they ain't about to get rid of themselves.

So they are desperately propping-up the system hoping the situation will "get better" if they keep on doing the things that caused the situation.

Rather funny, if you like gallows humor.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Tue Dec 7th, 2010 at 03:04:01 PM EST
[ Parent ]
It is a good thing for them that Bernanke explained for all why they don't need to read Fisher's
Debt-Deflation Theory of Great Depressions.
Otherwise some people might become seriously concerned.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 04:06:33 PM EST
[ Parent ]
Grr. Brain on auto-pilot. I used blockquote instead of underline. :-/

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 04:07:34 PM EST
[ Parent ]
The problem was that house prices had become so inflated that rising wages couldn't even keep pace.  Only low interest rates and 100% mortgages made them affordable.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:44:52 PM EST
[ Parent ]
Duh

We were saying housing prices relative to wages were beyond absurd 5 years ago.  IIRC, one of the first Front Page diaries on ET discussed this very issue.  

And all the Serious People© told us we were full of it.  Housing prices ALWAYS rose.  NINJA loans were fully backed by housing since house prices always rose.  And the rest of the blah-blah-blah.

We were right.  They were wrong. (And to them I say, "neener-neener, nyah-nyah.")

Those freaking houses ain't worth shit.  I don't care what "value" the financial folks have on their Balance Sheets.  It's fantasy accounting in Woo-Woo Land.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Tue Dec 7th, 2010 at 03:16:35 PM EST
[ Parent ]
They'll be worth less than their weight in shit before too long, judging by what's happening here.

I'm not even sure I'm kidding anymore.  I think our car is worth more than a good half of the properties here.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Dec 7th, 2010 at 03:44:07 PM EST
[ Parent ]
Only at the start of the price decline if this is any guide:



Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Tue Dec 7th, 2010 at 04:11:52 PM EST
[ Parent ]
"National"=U.S., I presume. Where can you find similar graphs for European countries?
by gk (g k quattro due due sette "at" gmail.com) on Wed Dec 8th, 2010 at 02:27:50 AM EST
[ Parent ]




Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Dec 8th, 2010 at 07:53:41 AM EST
[ Parent ]
I don't know where that recovery in Irish house prices is coming from - in any case it will free fall again once NAMA and the banks start offloading their asset bases to raise cash - and the Government puts greater taxes on householders....

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Dec 8th, 2010 at 08:37:10 AM EST
[ Parent ]
Thanks. Why the recent upturn in Ireland?
by gk (g k quattro due due sette "at" gmail.com) on Wed Dec 8th, 2010 at 02:05:41 PM EST
[ Parent ]
A house that has been through an improper foreclosure procedure is more of a liability than an asset. Title is seriously clouded but taxes and maintenance expenses continue while the asset wastes. If the banks had a neuron between them they would push for a way to get the government to pay at least HUD rates to get some of them occupied while reducing homelessness. But that might make them look like they had half a heart between themselves.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Dec 7th, 2010 at 04:12:46 PM EST
[ Parent ]
If my calculations are right I could lose less in after tax income than someone on the minimum wage - which is utterly absurd...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:32:25 PM EST
Well, if you're on minimum wage and your income drops €1 an hour, that's €160+ a month, and you'll paying about an effective tax rate of 5%, so yeah, that sounds possible - we expect our monthly take home pay to go down by about €160 a month.

But the problem was, after all, the high minimum wage and competitiveness. Well known fact.

by Colman (colman at eurotrib.com) on Tue Dec 7th, 2010 at 02:45:19 PM EST
[ Parent ]
well if you pay them little enough, people will emigrate, and that helps your unemployment stats

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Dec 7th, 2010 at 02:51:02 PM EST
[ Parent ]


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