(un)luck of the irish

We note once again today that reality has struck back at Europe with economic delusion taking a good punch in the face.

The irish economists seemed to have got everything backwards. Perhaps all those good years have got to them; they seriously don’t seem to have a clue what they are doing.

Senior Irish cabinet ministers spent yesterday hammering out the winding-up details for debt-ridden Anglo Irish Bank, which has now been nationalised.

The final decision, due to be released on Thursday, is expected to include a plan for restructuring the bank’s bonds.

And here the Irish government faces a tricky dilemma. If the bank’s bondholders are forced to share in the pain, the Irish government will alleviate some of its intense budgetary strains.

At the same time, the decision could spell problems for other Irish banks which need to raise about €25 billion ($US33.7 billion) this month to repay maturing debt.

Telling the share/bond holders to take a haircut is what should have been done on day one. But it is way too late to be discussing this as an option now. They have completely destroyed what was left of the economy and are now simply making the problem worse. The economy is completely destroyed after years of Austerity measures. Look at the delusion

The Irish government was counting on an economic recovery to improve its budget outlook. But these hopes were crushed last week by figures that showed that the Irish economy shrank by 1.2 per cent in the second quarter.

We simply ask how it was ever going to improve? If you are running a surplus budget you are taxing more than you are giving. The economy shrank ? Really!! 1+1=2.

We are suprised it only managed a 1.2% fall. There are obviously some innovative private businesses in Ireland, it is a real shame they are being undermined by the incompentent government. Seriously; how many times do supposed economists need to be told the fundamentals. If you are not a net importer and you strive for a surplus then you are making the people poorer. If people feel themselves getting poorer, they are not going to spend which means businesses collapse , which means people get poorer, and so on.

This doesn’t seem that hard to comprehend does it ?

As we noted last week Ireland has fallen for the usual IMF induced stupidity that bond holders are the ones you should please, and when you do everything will be rosey. We simply ask again, when the hell will Ireland wake up, default on its Euro debt and leave the EU ?

We also
note today, that the political process has almost completely fallen apart.

Hopefully this will mean that the government is kicked out and someone with a clue will make the hard decisions that need to be made.

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  1. "if you are running a deficit budget you are taxing more than you are giving" – I think you mean Government is spending more than it is taxing. I see that you read Billy Blog, so I presume it's just an absent-minded error.

    Keep 'em coming!


  2. Economic Delusion

    Thanks Andrew..

    The line should be "If you are running a surplus budget you are taxing more than you are giving".