How COVID-19 is accelerating the path to a cashless society

The usage of checks and cash has been in a decline for quite some time, and that trend has continued over the last four years. With the growing usage of credit and debit cards, as well as the growth of fintech, cash is becoming more and more obsolete. In recent years, fintech payment platforms such as venmo, paypal, and cashapp have contributed greatly to the growth of digital banking payments in Ireland and around the world. The COVID-19 pandemic created a new demand for these type of payments, as many businesses required contactless payments and online commerce greatly increased. The latest figures from BPFI’s payment monitor reflect this growing shift in payment methods. 

 

On March 15th 2021, Banking and Payments Federation Ireland published the figures from the BPFI Payments Monitor for the fourth quarter of 2020. The data showed a 67% increase in online/mobile banking between 2016 and 2020. It is also interesting to note that in the same four year period, check usage was cut in half. In fact, check usage fell to only 4.8 million in …

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The Rise of Income Inequality in the United States Part 3

Now that we’ve assessed how wealth inequality started and how to improve wealth and saving data, here are some ideas about how to further reduce wealth disparity:

The top 1% savings rate is much higher than both the next 9% and bottom 90% savings rates. One idea that is radical is to encourage long-run savings. The United States government could directly invest in these savings accounts so that they earn great rates of return. The other aspect of this plan would be to have interest in borrowing savings so as to encourage people not to borrow from their savings. Encouraging saving of the bottom 90% would reduce wealth disparity.

Other ideas to reduce wealth disparity include the following:

Increase progressive income taxation to decrease wealth disparity. Increase estate taxes in the United States to decrease inherited wealth Increase access to education and health benefits cost controls. Improve minimum wage policies. This will in effect shift power from shareholders to workers. Create better laws protecting consumers (such as predatory lending) and increase financial regulation to increase middle class wealth. Educate the bottom …

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Affordability Tradeoffs – Food for Thought

“Virtually anything can be made more affordable in isolation, simply by transferring resources to it from elsewhere in the economy” -Thomas Sowell (American economist and social theorist)

Three of the primary things Bernie Sanders, an American presidential candidate, is trying to make more affordable are housing college, health insurance. Has anybody stopped to ask, what will happen to the economy three steps down the line if his policies were to be enacted? Thomas Sowell believes that transferring extensive resources from other activities to subsidize an exorbitant luxury makes the country poorer as a whole.

Medicare for all is estimated to cost between 2.8-3.2 trillion U.S. dollars per year. This is an exorbitant luxury. Housing for all is estimated to cost 2.5 trillion dollars. This is an exorbitant luxury. College for All would cost 70 billion per year from the state and national governments per year. This doesn’t mention his cancel all student debt plan (student debt in the united states is currently 1.6 trillion dollars. This is an exorbitant luxury.

Bernie Sanders’ plan fails to recognize tradeoffs and opportunity costs. Price …

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Unemployment rate falls towards 6%

New figures released by the Central Statistics Office show that the current rate of unemployment is 6.3%, the lowest it has ever been since the market crash. This rate is 2% lower than that recorded in June of 2016 and the exact number of workers who are listed as unemployed fell by 42,100 during this time.

 

The current rate of unemployment in Ireland is 3% lower than the EU average, reflecting this country’s incredible economic progress in the past few years. Although the unemployment rate is still higher than that in countries like Germany and the Netherlands, experts predict that the steady downward trend will continue.

 

Furthermore, Ireland has an unique advantage in its ability to better integrate immigrants into the work force. The unemployment rate for foreign nationals in Ireland stood at just 7.7% last month, when they are much higher across the rest of Europe.

 

Economist Mariano Mamertino believes that “Ireland remains on a clear trajectory for unemployment to …

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Irish economic policy for the crisis: What next? (first session)

On Wednesday there was a conference in Trinity College Dublin called ‘Irish economic policy for the crisis: What next?’. This post is video footage taken at the conference (thanks again to Philip Lane and Patrick Honohan for allowing me to film it).

There are some really fascinating ideas in the talks and for those of you who couldn’t make it on the day it is really worthwhile watching.

The first speaker of the day was John Fitzgerald of the ESRI who gave a talk about competitiveness. The other parts are here ( part 2, part 3, part 4, part 5 )

Karl Whelan of TCD followed with a piece on Potential Output. Karl’s talk raised some great points about the structural deficit but pointed out (towards the end) that the actual deficit is the thing to focus on. …

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The bailout has arrived, Irish banks in line for Government funds.

The banking bailout has come along, as many of us always thought it would, in the form of a (potential) €10 billion Euro package. An announcement was made yesterday and shares in financial institutions surged on the back of the news. The actual details of the deal are scant at present.

The Minister of Finance remarked on RTE radio that the main thing he hoped to see as a result of this was for lending to return to the market, we can only assume this refers to enterprise lending and not to mortgages as the mortgage market has not frozen to the same degree the business loan/credit area has.

The National Pension Fund Reserve is the area the funds will come from, an obvious issue here is that the fund made losses of c. 33% in the last year and cashing out now will mean those losses are crystallised without hope of return should the markets come back any time soon. …

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