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Austerity In Ireland Disproving Krugman?

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pairunoyd Posted: Wed, May 16 2012 10:48 AM

http://www.ibtimes.com/articles/340331/20120512/debt-europe-budget-crisis-ireland-france-greece.htm

 

 

But while Paris and Athens have rebelled against Berlin-inspired discipline, one country has embraced the austerity model without, it seems, without so much as a murmur.

Ireland -- the Celtic Tiger so viciously declawed after its housing bubble imploded in 2008 -- has taken the harsh medicine dutifully and, unlike its testy European peers, grimly borne budget cuts and tax hikes with minimal protest.

In December 2010, the government accepted an €85 billion loan from the EU and International Monetary Fund in exchange for budget cuts amounting to €15 billion.

And, on the surface, the strategy of cuts, cuts, and more cuts appears to be working. The country's underlying budget deficit last year fell to 9.4 percent of gross domestic product, below the target of 10.6 percent agreed to with the EU and IMF.

Added to this, Ireland's unemployment rate was down slightly to 14.2 percent from 14.3 percent in December; it has avoided recent euro-zone downgrades by Fitch and S&P; and its 10-year government bond yields have fallen to less than 7.0 percent from 14.5 percent.

"Ireland is not doing too badly," according to Cillian Ryan, dean of liberal arts and sciences at the University of Birmingham in England. "They have managed to find something to replace the cutbacks in government spending," he said.

"The best way to bail out the economy is with liberty, not with federal reserve notes." - pairunoyd

"The vision of the Austrian must be greater than the blindness of the sheeple." - pairunoyd

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Of course, they [=the Irish citizenry] would be better off forcing their govt to repudiate the debt altogether.

The world would learn a valuable lesson. Don't lend the Irish govt money. You won't get it back.

The Irish would learn a valuable lesson, too. The less money the govt has, the better off we, the people, are.

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Yes, why would anti-statists want the government to pay off its debt? Would we want the mafia to pay back its lenders?

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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Good to see you back, FOTH.

Nothing wrong with the mafia paying back it's lenders, if they use their own money. But if they go door to door, using violence and threats of violence, to get the money to pay back, we don't wnat that, do we?

BTW, a recent post on my blog talks about Marx's critique of Say's Law. Do a search there for Steve Keen, and/or Marx.

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Of course, they [=the Irish citizenry] would be better off forcing their govt to repudiate the debt altogether.

The world would learn a valuable lesson. Don't lend the Irish govt money. You won't get it back.

The Irish would learn a valuable lesson, too. The less money the govt has, the better off we, the people, are.

 

 

The vast majority of the money Ireland is paying off does not belong to us. We are paying off unsecured bond holders of banks which have no systemic importance. The reason? Because the French and German banks have massive amounts of money in the Irish system. If Irish banks were to default, this would collapse French and German banks. The Irish government has also failed to make sufficent cuts and we are behind our deficit target. Aswel as this the government launched a stimulus package and jobs initiative when they were elected. They now want to launch a €13 billion stimulus in return for passes the fiscal compact treaty.

 

 

'' The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.'' Stephen Hawking

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Vladimir,

I don't understand what you are saying. Who is "us" and who is "we" in your post? Are you Irish?

I also don't understand how what you are saying relates to what I wrote. Are you agreeing? Disagreeing?

How does what you write support what I'm saying [if you agree] or contradict what I'm saying [if you disagree].

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''Us'' and ''we'' are the Irish. I was trying to point out that the money that has been lent to the Irish government is and has not been paying for government services. Corrupt government officials have made secret deals with former bank CEO to pay all their bondholders. The Irish people are not in debt. The banks are, and the government has paid for this debt despite the IMF telling the not to. The has been talk of defaulting but only on the banks debt. So people will not learn a lesson to not lend to the Irish but not lend to the banks. Plus the people have learned nothing from this. There is now a record number of socialists in parliament who want to increase social welfare and taxes on the rich.

'' The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.'' Stephen Hawking

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Yep. Ireland was running a budget surplus until the bank crisis hit. So was Spain as a matter of fact.

 

 

 

Also, I'm no certain that a 0.1% drop in the monthly unemployment figures is reason to claim that the economy is improving. The month to month figures tend to jump around a bit anyway, and so it is the general trend that is important.

 

btw, am I the only person not able to see images on posts? Is it my end that is broken or mises.org's?

 

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excel replied on Fri, May 18 2012 3:36 AM

I'm having the same problem, until I hit reply to your post. At which point they(the graphs) showed up. 

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BTW, a recent post on my blog talks about Marx's critique of Say's Law. Do a search there for Steve Keen, and/or Marx.

Cool. I'll check it out.

BTW, I am currently preparing a response to Mises's Human Action, which should hopefully clear up some of my objections to Austrian Economics and reframe some of the discussions I've had with posters here.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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