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The Luck of the Irish Runs Out
theodp writes "Looks like threatening to take their ball and leave paid off for US tech firms. The Irish government announced plans this week to tap the welfare state and working class for much of the $20B in savings they've pledged to find over the next four years, but the austerity measures will not touch large businesses like Microsoft, Intel, Google, HP, Facebook, LinkedIn, and Pfizer, which created jobs and fueled exports in Ireland after being lured by low corporate tax rates. More than 100,000 Dubliners took to the streets to protest the bailout plan, calling for the Irish government to default on the country's debts, and demanding an immediate election. 'We should default,' said a retired union worker, 'the idea that the workers of this country should pay for the gambling of the billionaires is disgusting.'"
Debt's that cant be repaid, wont be repaid. The only question is how you intend not to pay them.
09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
Debt is intrinsically bad when it's gov't debt, because gov't is not supposed to be a business.
A business can invest money to generate some positive cash flow and then maybe even some revenue, gov't does not and shouldn't be expected to.
When gov't borrows to finance its programs, it means the same thing as taxes, only this is taxes + interest forwarded to the future generations of voters, which is theft, because those future generations didn't agree to any of it, and it would be best for those future generations to get their belongings and leave the country, rather than stay repaying the debts of their parents/grandparents.
Taxing consumption is the only true and honest way to fund a gov't, and gov't shouldn't be spending much on anything beyond basic protection against military invasion and a justice system *(and probably cops/prisons, to give teeth to the justice system.)
Gov't IS consumption, any citizens benefits from gov't only as much, as he benefits from any other consumption. Gov't is consumption, and thus its income (taxes) should be proportional to other consumption that people are willing to spend on.
When gov't taxes production, it cannot be controlled, the only feedback mechanism, by which a growing gov't system can be stopped (if it's taxing production) is basically loss of jobs and of productivity, which implies reduction in production and wealth and destruction of economy. In that case the gov't usually switches to acquiring debts, which shouldn't be allowed.
Gov't with a debt, is a gov't that cannot be afforded by its country current and especially future.
Consumption based taxes would provide gov't with enough money to finance the minimum required spending, while also creating a feed-back mechanism, necessary to control the size (budget) of gov't, because if people spend less on everything, they end up spending less on gov't, and this basically reduces gov't consumption just like all other consumption, and it is a good thing, needed to restructure a slowing economy.
Obviously all Keynesian shamans' brains explode at this very moment, but that's also a positive thing, we need their brains to explode, they have done enough damage.
The only way to get out of a recession is the way it was always done: stop spending, save money, rebuild savings, have a deflation by reduction of money supply, see prices for products and labor fall, use the saved capital to start new businesses, rehire people, start production.
The gov't wants to do it like so: print/borrow money, prop up spending on consumer goods produced in different economies, OK, so support economies of other countries while destroying the currency itself, and robbing everybody who holds it of purchasing power, do not allow the savings to be rebuild by low interest rates. Somehow hope that this will inflate another bubble that economy will somehow use to float on, but this new bubble obviously needs to be bigger than the previous one, that caused the last recession.
Every new bubble is bigger and will cause a bigger explosion, until the very bubble that will end up taking out the currency itself, as well as bankrupting the country and sending interest rates into the skies. Good luck with restructuring then, the pain will be enormous.
Oh, the next bubble to blow - US bonds. Then it's probably hyper-inflationary depression, because the gov't still relies on Keynesians like Krugman.
You can't handle the truth.
The implied claim high taxes destroy the economy is yet to be proven.
That, my friends, is the one truth that the millionaires and billionaires want to keep out of the public debate at any and all cost. Roosevelt called these people "economic royalists" and he was right. Every country that has high marginal taxes on large profits and large incomes and sticks to it has a strong and stable economy. When you embrace the insanity that Reagan and Thatcher brought to the world, you get bubbles followed by crashes. It happens every single time it's been tried, but it's wildly profitable for the uber-rich and the hell with everyone else, right? Then they go around and spend some of that money convincing all you free market libertarian or conservative types to vote against your own economic interests. Religion, marginalizing certain groups or points of view, extreme nationalism all get trotted out to make the uneducated or the delusional vote for policies that directly hurt them. Lather, rinse, repeat.
another G. W. Bush or Obama
I'd say the chances of this are pretty likely. Barring a major upset, Obama will get the Dem nomination and the GOP will likely pick someone that makes GWB look like Einstien. I wouldn't be suprised to see "we must stand by our North Korean allies" Palin get the nod from the GOP.
Sometimes the light at the end of the tunnel is the headlight of an oncoming train.
Except our mess very much isn't just the GWBs/Obamas of the US. We're in what, 13T(rillion) of debt right now?
The problem is that the baby boomer generation promised itself SO MUCH, we're going to go bankrupt from entitlements. Social Security is a small part of it. The real meat is Medicare. And that's not all LBJ. For instance, after Bush barred seniors from going to Canada/Mexico to appease the drug industry, he and Ted Kennedy (I think) pushed Medicare Part D to appease the huge senior lobby. This was called the single most financially irresponsible piece of legislation in history and will cost $10 Trillion dollars looking forward. The debacle shows how much the dear leaders here are really for free market, how dare people shop for cheaper drugs! /s
Looking forward, at current tax rates, we'll have a total of $50 Trillion dollar gap between revenue coming in and revenue going out. By 2030, the Federal Government will have little more revenue than to pay entitlements and interest on debt, nothing for it's official functions.
And is this surprising in a country where most government workers (including Army, USPS, many suburban Teachers depending on their local contracts, etc) work 20-25 years and can then retire on half pay and full health insurance the rest of their lives. How many private sector jobs let you start at 18 and quit with by 43? Yeah.
Most of my numbers came from David Walker, former US Comptroller General from 1998 to 2008, America's head accountant, appointed by both parties to various positions. Many of them came before the 2008 disaster although he was warning of a bubble iirc. It's probably worse now.
http://video.google.com/videoplay?docid=-7461407498377956300#
Anyway, I don't blame politicians except for bending to their constituencies. I blame following our democratic tendencies instead of our republican (small r) one starting with the 17th amendment. The People wanted entitlements, they got them.