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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.'"
Look, left-wing parties are likely to do well in our next election, but no-one sensible here, left or right, wants to raise the corporation tax rate. These companies provide our jobs.
If a raise would be announced, ordinary people here would really start to protest.
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It's the private bank's debts.
For some unknown reason the Irish government decided to guarantee all debts by banks in Ireland including banks that are owned and run by people who are not Irish or based in Ireland. These debts were not sovereign debts until the Irish government decided to unilaterally back them without any good cause. They did this back in 2008 and it's only now that they massive amount that they've basically handed over to private investors is becoming apparent.
It's pretty nuts that private investors had hoped to make money by investing in Irish banks - but now that they're actually facing losses the people of Ireland are going to step up and cover all these debts. So for the private investors it's a case of head I win, tails you lose - where there is no risk of the private investors losing any money - and no chance for the public to get a share of the profits that banks were making in the good times.
"Free software as in beer, copy protection as in racket" - Telsa Gwynne
Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.
Paul Krugman's latest column addresses this. The main point is that Iceland let the banks default, while Ireland took the banks debts as public debts and guaranteed it. In the end, Iceland has recovered while Ireland's people have to bear the burden due to austerity measures.
god n. : the Supreme Being, indistinguishable from a good random number generator.
Who would ever lend Ireland money ever again?
Good, then maybe it will force their politicians to actually make do a balanced budget rather than keep running a deficit, spending money they do not have, effectively using the country's future income to secure their own positions in elections.
Well, one can hope.
Oliver.
Should be the more appropriate headline here.
Posts, MyBio or Sig, may contain satire, sarcasm, bolded nouns be sardonic or even witty & be Church of SD
The rich aren't paying 40% tax! The top tax rate is 41% but this is only paid on income over €36K (single) or €45K (married) or €73K (married both working).
But when you factor in people's tax credits and various tax reliefs, the statistical data for workers in Ireland shows that income tax peaks at about 20% of income. Those with a *lot* of income who would in theory be affected more significantly by the 41% tax rate actually pay tax advisors and use various schemes so that at the top end, the income tax proportion drops below 20% again!
Most workers pay almost no income tax - as you pay none at all up to something like €17K (when you factor in tax credits). Median income is about 20K, and ordinary workers would pay a max of about 10% effective tax rate. On an above-average income, I pay about 12% total in tax.
10% is the tax rate some countries charge the low paid! (as opposed to 0% here!)
We do have many other taxes, but that's to make up for low income tax.
Of course all this is only valid until the budget on 7th December.
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There was never any serious proposal to raise the corporation tax rate in Ireland, it's the one non-negotiable position of the Irish government and always has been. Having a low rate is also popular generally, though many would feel the rate could go up a few percent (though still well below other many other European countries) so that corporations do contribute more, but no-one seriously proposes raising it dramatically. What should perhaps be changed are the rules about moving profits around so that multinationals actually pay the 12.5%. I read this week Google only paid a few million in tax last year. It's not the rate, it's the application of the rate. Germany may have a nominal rate much higher than Ireland but the effective rate is often much lower due to special tax breaks in certain sectors.
As usual, many people are quick to defend these pricks, saying that if it weren't for them, everyone would be out of a job. Yes, the economy is in their power. Calling that a mutually beneficial relationship sounds like Stockholm syndrome.
If your very survival depends on receiving a living wage from a corporation that can simply choose to go away if it is asked to pay for the infrastructure it also uses, then you are not living a "dream" generously provided by altruistic corporations, but in slavery to organizations who can let you starve if they wanted to. Not only workers, even governments are forced to debase themselves before these corporations, lowering their living standard, their wage expectations, cutting their social system and their taxes bit by bit to compete with other countries that are forced to do the same.
Ireland, and the entire European Union at that, should make a stand against this and play hardball. The fact is that while corporations can move their production elsewhere, they do have to sell something eventually. A high-tech market requires a high-tech industry to flourish: If corporations leave the country, the economy goes to shit and nobody can afford the flashy gizmos these corporations are selling. Standardize the tax hike over all EU states, accompany it with an import tariff on technology not produced inside the country, and suddenly paying a little more corporate tax will seem like a much better alternative. The workers are not only their slaves, but also their customers.
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.
http://www.economist.com/node/17577107
I watched a German documentary this morning about how the Euro was bad (German is not my mother tongue, but I am fluent and could understand everything). Some of the stuff in that was political dynamite: I don't think that politicians in Europe understand the powder keg that they are sitting on.
From the The Economist article,
The most concerned onlooker is Germany, which sees its credit lying behind the entire euro area. As ever, Europe’s biggest tabloid, Bild, captured the mood this week, asking “First the Greeks, then the Irish, thenwill we end up having to pay for everyone in Europe?
Oh, let's piss off the Germans . . .grand idea . . . in Europe, that always ends in tears.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
The debts involved are massive, too.
From this article (though note it was written back in September):
"Under the current program, we estimate that each Irish family of four will be liable for 200,000 euros in public debt by 2015."
Ouch.
According to whom?
Surely it's not the workers, because when Big'n'Big Co pulls up their tent pegs and moves shop, all the workers are suddenly unemployed.
It's probably not the consumer, because when Big'n'Big Co finds a way to half their cost of production, it's not guaranteed to drive prices down. Why bother cutting prices and taking a bigger market share when you can just shovel up a pile of cash big enough to buy your competitors (or a controlling interest in their stock)? Hell, why not just collude with your competitors to keep prices artificially inflated - then everyone's happy!
Surely then, it is the desperate - those poor starving people in $Third_World_Nation who desperately need employment of any sort. Except that, after their standard of living starts to rise, Big'n'Big Co just moves on to the next shithole and leaves the desperate unemployed too.
Well fuck, if it's not the middle class or the lower class, who the hell is left? :P
Oh, right, the bourgeois. Well, as long as they're doing all right, everything is just peachy! Hurray for Capitalism!
Each American family of four is liable for about $200,000 in public debt.
No, they are broke because the government decided to cover the private bank's debt to the tune of a hundred or so billion euros.
-- Give me ambiguity or give me something else!
No one ever 'generates' a lot of money, certainly the government mints print it but for every one else making s lot of money is all about being greedy. Paying very little for something and then putting a huge markup on it and selling (importing cheap junk), employing people where you have to capital to buy equipment and they do no and basically selling they're labour for much more than you pay for it, inheriting large sums of money and buying up all the income produce property you can, gambling with other peoples money at financial institutions, oh wait, they is always prostitution they certainly do generate money with their assets but they are the only ones (Psychopath pimps still take the lions share, hmm, much like the rest of the economy).
Human society is a function of all humanity, those that profit most by it should pay the most for the benefit they gain, of course being greedy, they just want more. You neither read, write nor even speak without the support of the rest of humanity. It is time to put a stop upon preying upon the rest of human society and start working together for mutual benefit.
Chaos - everything, everywhere, everywhen
That is why I figure the USA will default in 5 years, 10 tops. The only thing really keeping us afloat is the Fed printing money as fast as the presses will run and using it to buy our debt, basically making the money worthless. Then figure in the retiring boomers, huge masses of working poor that are only kept afloat by social programs, and the cost of two endless wars? Yeah I give it a decade tops. Enjoy it while you can folks, because from the looks of it another worldwide great depression will soon be upon us. The only question is whether we will learn from our mistakes and put heavy regulations on the banks like we did during the last one, or if those that believe in the free market fairy will win out. Without control free markets quickly end up corrupted when too much ends up in the hands of too few, just as we have now.
ACs don't waste your time replying, your posts are never seen by me.
How do you run a deficit without generating debt?
Leprechauns
Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.
Paul Krugman's latest column addresses this. The main point is that Iceland let the banks default, while Ireland took the banks debts as public debts and guaranteed it. In the end, Iceland has recovered while Ireland's people have to bear the burden due to austerity measures.
Iceland didn't let it's banks default as part of an act of clever crisis management even if that's what the members of the firmly right wing Icelandic independence party will confidently tell you. What happened was that a series of governments (dominated by the independence party) and stuffed full of free market fundamentalists sat around from the mid-nineties to 2008, deregulating everything, letting the banks grow at a fantastic pace and crippling the various organizations that were supposed to regulate the financial industry. For years they just held their ears shut singing: "lalalalalala... I can't hear you!" whenever somebody criticized the state of the icelandinc banks and the fact that they had become 12 times the size of the national GDP meaning that the state was therefore unable to back them up in a crisis. By the time the crisis finally hit the Icelandic government was completely bowled over. The Independence party had by now formed a coalition with the Social Democrats who proved just as useless as their right wing coalition partner and did little other than watch while the Independence party (who also dominated the central bank) fumbled about and caused things to fall apart. There were no emergency plans in place, nobody had anticipated this. After all, the infallible all-knowing free market should not act like this should it? They finally decided, at the climax of an epic panic attack, to nationalize the most endebted bank, Glitnir, which caused the whole icelandic banking sector to collapse like a row of dominos. Krugman (probably unintentionally) gives you the impression that the Icelandic Government that presided over the 2008 collapse allowed the banks to default by clever design when in reality they simply "pulled a Homer" a phrase which wikipedia defines as: "to succeed despite idiocy". Like Mr. Krugman I pity the Irish for their successful efforts to postpone the pain by a couple of years because it made the problem exponentially worse.
Most of that money comes from countries where income tax is well above 50% (or even 72% in Denmark).
Yes even the Danes that don't use the Euro have pledged a substantial guarantee.
In the mean time two of the countries with the highest taxes, Denmark and The Netherlands, have the lowest unemployment of the Union, around or even below 5%.
The implied claim high taxes destroy the economy is yet to be proven.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
That is why I figure the USA will default in 5 years, 10 tops. The only thing really keeping us afloat is the Fed printing money as fast as the presses will run and using it to buy our debt, basically making the money worthless. Then figure in the retiring boomers, huge masses of working poor that are only kept afloat by social programs, and the cost of two endless wars? Yeah I give it a decade tops. Enjoy it while you can folks, because from the looks of it another worldwide great depression will soon be upon us. The only question is whether we will learn from our mistakes and put heavy regulations on the banks like we did during the last one, or if those that believe in the free market fairy will win out. Without control free markets quickly end up corrupted when too much ends up in the hands of too few, just as we have now.
So what part of that list of woes is due to "free markets"? The Fed printing money? Retiring baby boomers? Social programs? Two "endless" wars (one which is in the process of ending, I might add)? None of those items are due to free markets. Four words describe globally the bank/real estate problem: "private profit, public risk". It's not a free market when you can pass on risk of your investments to the public.
Having said that, I don't know if you're accurate in your prediction of default. The US is a big train and there's still a window for improvement of US government finances both in the next two years and in the presidential term after that. Still, if we get another G.W. Bush or Obama, I'd have to consider default in the next ten years a real possibility.
Debt is not intrinsically bad. Anyone who believes this should spend some time playing Transport Tycoon - the best strategy in that game is to borrow right up to your limit, because a well run company will make much more profit from the capital investment than the cost of the interest. It's a very simplified economic model, but the point still stands. If a government borrows $n, has to repay $n+20%, and invests the money in infrastructure that generates $n+50% in tax revenues, this is a sensible and responsible thing for the government to do. This is why most companies have outstanding loans - they are making more money from the investment than they are losing from the interest payments, so repaying the loan would be a net loss.
The problem is not debt, but debt without a plan for repayment.
I am TheRaven on Soylent News
http://upload.wikimedia.org/wikipedia/en/3/3e/Zimbabwe_%24100_trillion_2009_Obverse.jpg
The AACS key is NOT 0xF606EEFD628B1CA427BEA93A9CA9773F
Tell that to the people who will have to emigrate from Ireland in search of work. A bit of a sore point I believe because of history.
100 years ago, they travelled to the USA. Now they'd probably not be allowed entry because the USA frowns upon economic migrants.
in democracy with deficits allowed you are doomed to wreck your economy, because in order to win the elections you got to promise a shitload of 'freebies' (which are not free at all), otherwise someone else who promises a lot will win. Sanity and economic soundness are not valued by the average voter so it's the race to the bottom.
as Tocqueville said
The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
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.
Unemployment in the Netherlands is a lot higher than the official figures indicate. We used to "park" a great many hard-to-employ people in our Medical Disability scheme, which is why at some point we have stopped counting people on Medical Disability as unemployed, because the figures became something of an embarrasment. That practise has recently picked up again in the form of the new Medical Disability for Young people (WaJong); a scheme which according to the Bureau of Statistics is set to become as large as the original disability scheme.
We've about 900.000 people on Medical Disability in NL, that's roughly 6% of the population and 12% of our labour force. You can stop wondering why our unemployment is so low, because it isn't. Start wondering instead why our taxes are so high....
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
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.
moving the capital around has everything with free markets, but exclusive deals, special treatments and subsidies for the chosen do not. Bailouts are such cases. Some failing bank or a car manufacturer gets bailed out, but your favorite bakery at the corner does not. Free market is a fair judge, treats all the same and the winners and losers are decided only by their merits, not by who they know.
moving the capital around has everything with free markets, but exclusive deals, special treatments and subsidies for the chosen do not. Bailouts are such cases. Some failing bank or a car manufacturer gets bailed out, but your favorite bakery at the corner does not. Free market is a fair judge, treats all the same and the winners and losers are decided only by their merits, not by who they know.
The back and forth in this thread really just shows that a "free market" is an illusory concept. It is useful to a limited degree, but you have to keep in mind that it is not possible in real life.
Once you throw government into the mix, you necessarily limit the freedom of the market. But, without a government, you don't have the structure to set up anything resembling a "free market".
The other point that seems to have been missed is that, although you are right in saying that the Irish situation is not due to a real "free market", the term "free market" is what is thrown about to keep the proles in line.
Similar to the upcoming US election results
Of course, that's already outlawed. So your argument is that we need more cops then ? I don't understand.
You're purposefully misunderstanding. Anyone living in 2010 knows very well that regulation has been essentially shredded in favor of exactly the kind of practices that grandparent described. Where it's still outlawed, the regulator monitoring is usually crippled by legislation purchased by Big'n'Big Co.
Cases to point: microsoft, banking system.
Well fuck, if it's not the middle class or the lower class, who the hell is left? :P
Oh, right, the bourgeois. Well, as long as they're doing all right, everything is just peachy! Hurray for Capitalism!
And since this mobility first started, we moved from 1950's to 2010. Are you seriously claiming either the lower class or the middle class is worse off ?
This is just blatant trolling. The reason why standard of living has moved up is because science has progressed to the point where we can produce things needed to raise standard of living far more efficiently. If Big'n'Big collusion and significant income variance had been shrunk to reasonable size, average standard of living would be MUCH HIGHER.
So yes, in comparison of 2010 without flaws, and 2010 with flaws is indeed obvious. If you want to argue that 1950 vs 2010, we can just as well start praising benevolent North Korean leaders, who made sure that their standard of living of their people is better then in 1800.
Which is the whole bloody point, and to miss it, you have to make a real effort.
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.
The back and forth in this thread really just shows that a "free market" is an illusory concept. It is useful to a limited degree, but you have to keep in mind that it is not possible in real life.
It's not a very useful concept when used to argue we should remove trade barriers, which it is used all the time to do so.
That, right there, is the real problem. It's not that corporations can make special deals with governments, there is functionally no way for any country to stop other countries from doing that. There is no way to solve that problem, ergo, that can't really be the problem. If houses you build keep falling down, the problem to investigate is not gravity.
The solvable problem is that they then can continue to operate and sell in the US while not paying any taxes here.
We need to get rid of the idea of 'corporate' taxes where profit can mysteriously move from place to place and they pay taxes somewhere we've never heard of. (And they're way to easy to avoid altogether.)
We should tax them when they pay workers, in the location those workers are. We should tax them when they sell goods, in the location those goods are sold. (Or, easier, when those goods are imported.) We should tax their capital and real estate, in the location that capital and real estate is. We should tax their corporate dividends, in the location that stockholders live.
Fuck asking where the company, an entity that is an artificial creation, 'lives'. Tax the things that physically exist where they actually are and tax the money going in and out where it's actually going in and out.
If corporations are people, aren't stockholders guilty of slavery?
You do realize that what you have described is the opposite of a free market, right?
I swear, 99% of arguments against free markets are really arguments against fascism (a form of socialism, where profit is appropriated by corporations rather than ruling party members), which is the OPPOSITE of a free market. It's like saying how terrible a color white is because it is so dark and nasty, and it absorbs all the light. When anyone points out that they are describing the color "black" then they say, oh, well, there is no such thing as white anyways, so we should start off with a baseline grey, which apparently won't change color and turn black like white does, except that in reality, it is closer to black, so it will get that way much faster.
If you want white, pick white, and keep it as clean as you can. Just because you can never get it perfectly clean doesn't mean that the concept or idea of the color is any less valid. It is the same way with the free market. Sure, it is never going to be absolutely free, but it is far better than ANY other system, which is by definition NOT free. Understand that free markets are not just about removing regulations, they are about removing SUBSIDIES as well. Those evil banks that everyone loves to hate so much are totally dependent on subsidies at this point. A free market will wash them all down the toilet, with the fittest honest bank now able to step up and place the highest bid on thier capital, and expand. If they become corrupted, then they will fall, and others will step up to take their place. This is the way it was in the US right up through 1913, and that principle took us from desolate backwater devoid of rich resources other than lumber and fish to industrial superpower. Any nation which followed any other path wound up like any of the South American or African nations.
People always seem to drag this one out, but fail to understand what Mussolini meant by corporatism. Fascism is at its core a merging of Nationalism and Syndicalism. The corporation is a syndicate, which is a vertical trade union in which binds management and labor together. Its more like a guild.
Each "corporation"/syndicate/guild elects deputies to the Chamber of Deputies, who are there to represent the interests of the industry as well as to speak on its behalf as experts in the field. Thus members of the transportation syndicate, who would include workers from railroads, airlines and the shipping industry, would be responsible for crafting the legislation that the executive committee, and ultimately the dictator, would be responsible for signing off on. This avoids the problem of having lawyers with no concept of how things work writing laws with regards to agriculture, communications, etc.
Under Fascism there would have been no Ted "series of tubes" Stevens. The election for telecommunications representatives to the chamber of deputies would have been democratic through all levels of membership, from cable monkey to executive. The best people would be chosen to represent the interests of the guild and people with no clue get no say.
Honestly, having read extensively treatments on various political ideologies in the left, right and center, by those who adhere to them as well as by those who critique them, the picture I got of fascism honestly doesn't sound half bad compared to some of the other harebrained bullshit people have come up with in the past.
Borrowing from social security to pay for non-social-security-related expenses is like borrowing from your kid's college fund to pay for a new deck. Yes, you've increased your wealth in terms of material assets, but it's not like you can liquidate the deck to pay back the college fund later. So, the government has to borrow to pay back the cookie jar. The debt isn't reduced, it just gets muddled.
As to your response re: teachers, you seem to harp on one part of a list to try and make the person you're replying to sound dumb. Soldiers, civil servants at various levels, etc, can start at 18 and retire after 20 years. And not all of those soldiers get shot at. Desk clerks, supply sergeants, etc, can all retire after never having seen action. Of course, there is a chance they could be made to if the situation were dire enough.
Federal dollars do go to the states to pay for education, so teacher salaries are going to be a part of that. However, it's likely not statistically significant, but to say that its not at least a little bit related is just being sloppy at best.
Frankly, this country has been on an unsustainable path since Andrew Jackson was President. We've finally reached the breaking point because we can't expand anymore. We've propped up all the countries we could expand into in order to get cheap labor and a new market without having to spend on infrastructure or let them vote, but they're realizing that they don't really need us anymore. We've spent too much, borrowed too much and let it get out of control.
It's gotten to the point where no one on the left or the right really has the will to do anything about it, or a plan that's worth a damn if they do. Combined with lowered standards in education (my mother is a public high school teacher and has been for the last 15 years or so. New requirements that all students graduate in 4 years have created a situation where now teacher's aren't allowed to give any grade lower than a 40 and grades have been readjusted to a 10-point scale, making it practically impossible to fail no matter what. She's so angry about it she's about ready to just give up and go find a new job that doesn't suck (AB from an ivy league school and a MA in her subject, she's not going to be hurting to find work)), this is pretty much the death knell of America.
That is why I figure the USA will default in 5 years, 10 tops.
This keeps getting repeated and it keeps being wrong. The US CAN'T default on it's debt. Our debt is denominated in US dollars, which means the US government can always make payments, either through raising taxes or inflating the currency.
The only thing really keeping us afloat is the Fed printing money as fast as the presses will run and using it to buy our debt, basically making the money worthless.
So then, there must be rampant inflation then correct? According to economic indicators our currency has been strengthening recently, and inflation has been low to non-existent. In fact it has been too low which has worried some that we would enter a deflationary period.
Then figure in the retiring boomers...
Yeah, who will be taking their SS money and dumping it back into the economy. Sure it will stress the SS program but that money isn't evaporating into thin air. It will be re-entering the system.
huge masses of working poor that are only kept afloat by social programs
Mainly because we don't have a real education system in place for people to gain new skill sets. There's a reason why we rank far below other developed nations in education.
and the cost of two endless wars?
No argument there. The money that was spent on those two conflicts alone could have done much more good here in the US.
Yeah I give it a decade tops. Enjoy it while you can folks, because from the looks of it another worldwide great depression will soon be upon us.
You're a little late to the party on that one. So far it has mainly been a recession. The US is in a recovery, albeit a slow one.
The only question is whether we will learn from our mistakes and put heavy regulations on the banks like we did during the last one, or if those that believe in the free market fairy will win out. Without control free markets quickly end up corrupted when too much ends up in the hands of too few, just as we have now.
People like to think a free market is like nature, where survival of the fittest would yield the best companies. However this is naive. Companies will influence the market much like humans influencing their environment. Humans alter their environment, wipe out all competitors for resources, and any possible predators. Companies in a pure free market would act in the same regard. Eventually you would end up with one or a handful of companies that would completely dominate the market.
You will always need to control greed.
~X~
You clearly know nothing about the situation, or our country, and just have a free-market axe to grind. Well buddy, I'm a believer in free enterprise, and I'm Irish, so let me give you a summary of what's going on. The billionaires referred to are the large investment institutions and the high net worth individuals that took bonds in the Irish banks. The argument is that they were paid interest for the bonds, in return for risk (thats how investment usually works, the reward is in return for the risk). The banks became insolvent (partly due to the global banking crisis, partly due to irresponsible behaviour, partly due to the low EU rate of interest (which suited the larger economies) providing cheap credit). The comment in the summary is referring to the fact that the bonds of the investors, who took the risk, are being guaranteed by the Irish state. Supposedly to avert a banking crisis, due to the systemic importance of the banks. Only we seem to have gotten a banking crisis anyway; which has made the billions poured into the banks seem like a bad use of money... As such, the losses of the bondholders (the 'billionaires' of the summary) are being socialised. This is what pisses people off. Irish people are very pro enterprise, pro business, and pro building shit. That's why so many companies invest here. We have a low rate of corporation tax, true, which is a big part of things; but we've also got a creative culture, and its a good business environment here. People like to have the craic; but they also like to work hard, and have a healthy disrespect for authority that helps them innovate. Now, sure, there is social welfare for the poor, and free health care, which maybe you are referring to. And its probably a little on the high side, these days. But Ireland doesn't have a culture of entitlement. The history of the people of Ireland is not one of entitlement, and its not in our psyche. Sure, some of the kids in the boom recently may be a little entitled - but thats because of the free money they had, not because of the welfare state. If anything, there isn't enough entitlement in Ireland. We didn't really know what to do with the money because it was the first time we ever had it; people couldn't believe how good it was, couldn't believe it could last, and that economic prosperity could come to us... ...and so didn't ask enough questions about whether it was being managed right, whether the politicians were properly serving us etc.
And as regards the parts of a welfare state we have being so bad...
Well, I remember spending a summer in Boston. Lived in cambridge, beside Harvard, MIT.
I'll never forget walking past a really awful looking woman, sitting on harvard square. She was clearly pregnant and had a sign saying 'please help, pregnant with AIDS'. And she looked it.
I've worked in the valley too - great tech culture, great enterprise culture. But walking around palo alto, past the homeless crazy guys on the street, asking for money, with nowhere to go...
Well, no, Irelands not perfect; but there's aspects of a welfare state I'll take over the 'fsck the poor' attitude any day.
Don't believe the false dichotomy - you can have a great culture of enterprise, without stepping over broken people on the way to work.
If we can figure some way out of the bank bailout here, maybe we'll get there yet.
Debt is intrinsically bad when it's gov't debt, because gov't is not supposed to be a business.
That sounds like you've bought into that position as an a priori assumption. While I'd agree that governments aren't businesses, to say that all government borrowing is therefore bad is foolishness. The purpose of good borrowing is so that investment can be made so as to increase income in the future that will repay the debt and ensure more money to do other things with. When applied to a government, the purpose has got to primarily be to invest in steps that will lead to increased total tax take in the future, generally through increasing overall economic activity in some way.
This is all independent of how wisely governments in your locale are spending, taxing or borrowing. If you're going to make an argument, it helps to start out from an intellectually-sound basis, which saying that "government borrowing is bad" is not. Reality just doesn't allow for such simple distinctions, and any sane policy must be at least grounded in reality.
"Little does he know, but there is no 'I' in 'Idiot'!"