Skip to comments.As Cyprus teeters, Ireland says it has shown "medicine" works
Posted on 03/24/2013 12:24:01 AM PDT by Berlin_Freeper
Ireland's expected exit from a European bailout program later this year should be a morale boost to other euro zone countries in crisis, its European affairs minister said on Saturday.
(Excerpt) Read more at reuters.com ...
Creighton said Ireland's experience proved that austerity measures were never easy but that debt-burdened euro zone members had no choice.
EU economic recovery policy driven by Germany is austerity.
Any tax increases come solely from the individual member leadership, like Frances insane Hollande.
Nothing can be done about tax increases from the EU level when people choose to elect lunatics like that.
The point remains valid, austerity is the only real solution.
Read the story at the link and see they went out for $10 billion in bonds to pay the Euro bailout debt
Ireland earlier this month took a major step towards exiting the bailout with a successful sale of 5 billion euros of new benchmark 10-year bonds.Bonds are an investment for the buyer. That is valid economic practice commonly used. The fact they were "successfully" sold is more proof that austerity works, otherwise they would not have been sold.
No, it is more proof that carry trade "works" or more specifically, stupid monetary policies designed to push up levels of debt on the theory that it will trickle into economic growth "work". Even more specifically, large institutions will borrow from the stupid central banks at 0.5% and "invest" in Irish bonds yielding 4.5% . Those "investments" are simply speculations that the Ireland will be kept in the Euro and actually pay their creditors.
But like the last time, this will merely create another bubble. This time the bubble will be built on top of an even-more hollowed out economy. When the bubble collapses the large institutions will quickly exit their positions creating massive deleveraging and instability. Government and central banks will respond again with more "austerity" (after ridiculous levels of socialist spending, even a small cut looks austere) and more of the same failed monetary policies.
Your odd opinion against reasonable speculation is noted.
Perhaps you have a better way, other than expecting a free hand-out?
Lapid: It’s Worse than I Thought
Israels new Finance Minister, Yair Lapid, admitted on Saturday night that he would have to implement tough economic cuts in order to repair Israels economy.
“I have discovered that there is a monstrous, growing overdraft in our bank account,” Lapid wrote in a message to his supporters.
It’s time to deal with that overdraft, he added. We’ll work hard, well limit ourselves, well reduce expenses, we will also have to cut where its most painful. It will be difficult, it will be stressful, but there’s another advantage: If we do this now, it will not continue for a long time.
Lapid added that in the coming year he will take actions that will enable greater leeway for next year in addressing the problems of housing, education, welfare and equal sharing of the burden.
“The problem arose because, instead of responsible economic management, they took huge loans and partied. I’m not going to repeat that mistake,” said Lapid.
He admitted that he would prefer to engage in happier things than dealing with the deficit, but added, I believe that my job is to go exactly where it is difficult.
Those who feel in the coming year that their situation has worsened should know that it will be temporary, said Lapid. The stronger the actions we take now, the more we can do to improve next year.
In January, figures assembled by the Accountant General’s Office found that Israel’s budget deficit was double than what had been expected. Instead of the 2% that Israel had been thought to be in overdraft, it turns out that the deficit is 4.2%.
The Treasury said that most of the unexpected deficit, about NIS 18 million, was due to lower than expected tax receipts. Spending overruns accounted for only NIS 2.2 billion of the deficit.
Lapids statement comes just one week after he said that he is not afraid to make decisions in his new role that will cause his popularity to decline.
“I am not afraid to make moves that will hurt my popularity, he emphasized. My job is not to be popular, but to lead. I went into the election with the slogan ‘Where’s the money? and this is a binding statement.
IMO austerity should be the normal economic policy and taxes should be wafer thin.
Anything else is immoral (crooked) and irresponsible (destructive).
My better way is “reasonable speculation” in economic ventures. Speculation in government’s ability to raise taxes on the rich while keeping the hole-digging and handouts going is not reasonable. It stalls economic recovery by squandering resources on non-economic projects. Long term capital will be committed to private enterprise in Ireland and anywhere else where there is a literate and willing workforce, but long term capital is suppressed by the monetary manipulations for debt-fueled government spending. Ireland has abated their spending somewhat, but only to clip off the bubble spending of the early 2000’s.
I agree. Limited, lean government should be the norm.
Of course not. But you're right -- in Europe [and here] austerity means making the citizens pay more in taxes while imperceptibly slowing the growth in spending.
It has fooled a lot of people, though. I've even seen posts here where FReepers lament that in Europe "austerity" hasn't worked; when they haven't actually tried it.
I believe Iceland is the only place that let the banks fail, cut spending and has actually cleaned up its mess a bit. No one wants to talk about them though.
One simple fact of austerity is that Irish citizens would no longer buy nice European goods at Euro-subsidized prices, but they are not willing to give that up.
So long as it’s real austerity and not socialistic “austerity”, I agree. But this is a deliberately-engineered crisis designed to get EU member states (and especially those of the eurozone) to give up their political power. Imagine the USA doing that to the different states of the Union, getting them to give up their states’ rights?
Bad enough that there are a number of Irish people (or so I presume) saying that the troika ruled the country better than the domestic government. That’s willing slavery.
I am not arguing that way with you. You are of course correct. Still, borrowing to get out of debt will always seem ironic to me.
See above what? What's above? Prithee, tell me.
Post 11. Ireland didn’t practice austerity, they just cut back a bit of the extra spending and wrapped themselves in the Euro (i.e kept their purchasing power intact).