Results 1 to 7 of 7

Thread: weekend commentary - watch Ireland today for prelude to US

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default weekend commentary - watch Ireland today for prelude to US

    (snip)" Ireland was one of the first countries in Europe to go down the path of austerity and as I wrote about last time, it did not work. Of course the failures of Irish austerity have much more to do with the global increase in debt than anything else, but Ireland is also suffering from a very similar malaise affecting all civilized nations: a giant federal government and the painfully flawed concept known as the welfare state. Observe the highlights of the Irish plan, courtesy of RTE:

    * Public expenditure down €10bn, tax up €5bn
    * Irish bank shares see big falls
    * Corporation tax will remain at 12.5% (maintain the visible tax, raise the less obvious ones)
    * Social Welfare to be cut by €2.8bn by 2014 (Social welfare costing too much?)
    * VAT will rise to 23% by 2014 (This is on top of other taxes, mind you there are people in Washington DC that want to introduce a VAT!)
    * Health spending to fall by €1.4bn over term of the plan (Federal health spending costing too much?)
    * Minimum wage to fall to €7.65 per hour (Minimum wage not sustainable?)
    * Property tax in place by 2012
    * Domestic water charges to be in place by 2014 (extra fees instead of taxes)
    * Plan includes 'full implementation of the Croke Park deal (a freeze on union pay and benefits, unions out of control?)
    * New entrants to public service will face a 10% pay cut (bloated Federal salaries?)
    * Public service pensions to be cut by an average of 4% (bloated Federal benefits?)

    That is just the tip of the iceberg, but I encourage you to look at some of the feedback coming from the large Irish institutions and opposition parties. Significant riots are imminent because so many people will be hurt and it is heartbreaking to witness this. However Ireland is just the start because most people, regardless of political affiliations simply loooooove their Government services. In a recent WSJ survey we learn that a vast majority of Americans refuse cuts in Medicare, Medicaid, Social Security and Defense spending, but at the same time refuse tax increases. Hello? McFly? Are the people surveyed employed at Ben's printing press station? It's baffling that a majority of the biggest superpower in the world has the combined IQ of a diseased chipmunk. Talk about having your cake and eating it too.

    Ireland is doing today what we will be doing in the future. When government is FORCED to make the most painful cuts just to stem the deficit only because we absolutely refuse as a nation to sit down and make sacrifices. AS A NATION. This no longer has anything to do with politicians, this now falls entirely on the populace. If citizens refuse to make sacrifices and realize that the welfare state that has been growing for about 80 years fueled by the destruction of currency is not sustainable, then cuts will be made for you. They will also hurt you the most while the ruling elite pays you lip service.

    Let me be clear. Cuts will be made for you and they will be terrible. Look again at what Ireland is cutting and think about how similar it is to America. Then look at what will happen in Ireland over the next few weeks and months - it is coming here. Americans cannot continue to demand their "services" and politicians cannot continue to be dominated by archaic economic principles of government spending as a panacea. Only a collective awakening by 2012 can stop this, but I am not sure we have that much time. "(snip)

    from

  2. #2
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: weekend commentary - watch Ireland today for prelude to US

    For a more relevant look at deficit reduction, try http://www.fiscalcommission.gov/

    It's always better to go to the source.

    HTH
    Z

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - watch Ireland today for prelude to US

    ^^^ however, for better or worse, the US commission's recommendations carry zero actual authority so they really aren't an authoritative source. Thus even more so than in Greece or Ireland, US politicians are likely to be very reluctant to actually CUT the size of gov't paychecks and/or benefit checks ... as evidenced by president Obama's very recent call for a 2 year pay 'freeze' for federal workers ( not counting pay raises from promotions etc.) along with the 'lame duck' house passing a bill to increase income taxes on those earning over $200k a year. America isn't even thinking about true austerity yet at the federal level.

  4. #4
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: weekend commentary - watch Ireland today for prelude to US

    There is the Ryan plan and even a progressive plan. However, only the deficit reduction commission has the depth of numbers on the US economy to be really authoritative. But of course, we would not want to intrude on your world of pure fantasy here in the dollar den of doom and gloom.

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - watch Ireland today for prelude to US

    well surprise surprise. The debt commission actually managed to get a majority of it's OWN members to support it's proposals today ...

    (snip)NEW YORK (CNNMoney.com) -- Defying expectations, more than 60% of President Obama's debt commission voted Friday in favor of the group's final recommendations for reducing the country's long-term debt.

    In a strong bipartisan showing, 11 of 18 members voted yes. Five Democrats, five Republicans and one independent voted in favor of the panel's debt-reduction plan. Those who voted against it included four Democrats and three Republicans.

    But the result still fell short of the 14 votes needed in order for the commission to present its recommendations to Congress for a legislative vote.

    No matter, said Dave Kendall, senior fellow for health and fiscal policy at Third Way, a moderate progressive think tank. " A majority ... that's huge. The president can say to Congress, 'We got 11 votes. We know we can do this on a bipartisan basis.' "

    Indeed, said Sen. Kent Conrad, one of the Democrats who voted for the plan, "this book is going to be read again."

    A Democrat who voted against the plan -- former union leader Andy Stern -- nevertheless said because more than 60% of the commission voted in favor, "this plan deserves a vote [in Congress]."(snip)


    Note that the commissions' own lack of voting support caused the proposal to fall short of 'requiring' that the US Congress schedule debate on it. So the actual next step would appear to be 'professional' commentary on the debt commission's final proposals ... with Paul Krugman, Stiglitz and others already warning that the plan risks precipitating a double-dip recession.


    As to gloom and doom versus economic optimism, lately we would appear to have both ...

    (snip)"For those seeking a perfect explanation of what is happening in United Banana States of America right now, then look no further: the just released September Supplemental Nutrition Assistance program data is out and we are happy to report that the number of poor Americans has never been higher - SNAP recipients just hit a fresh all time high of 42.9 million. Naturally, the market celebrates the record number of poor Americans by closing at 2010 highs. No long-winded, somnolent essays, no rants, just observations. These two facts explain everything that is happening in this unrecognizable banana republic. Now that is a five year banana plan you can believe in. "(snip)

    from


    Of course, with no real 'action' coming out of the debt commission or the 'lame duck' congress, right now the only real economic action is coming from the FED's trashing of the US dollar.

    (snip)For those wondering why the market leaked higher in the last hour, it is because someone got an advance copy of the transcript (or advance notice) that in this Sunday's latest attempt at faux transparency on 60 Minutes, the bearded mutant-cum-supreme genocidal overlord says that more QE is coming. From Reuters: "The euro rose to a session peak against the dollar in late afternoon New York trade on Friday after a report on the CBS website that Federal Reserve Chairman Ben Bernanke did not rule out buying more than $600 billion of bonds in further quantitative easing." It also explains why the euro is back to 1.34, and is right in line with our expectations that the EURUSD is only weak so long as the market realizes that much, much more QE is coming. How much? See the chart below for our ongoing expectation of what the Fed's balance sheet will look like soon. And yes, the $7 dollar jump in gold late in the day may be multiplied 10-20x on Monday after the world realizes that the US economy is as fucked as always."(snip)

    from


    Also, the above market action also took place after the announcement of an increase to a 9.8% unemployment rate by the BLS and the Household Survey.

    ~
    Last edited by Melonie; 12-04-2010 at 01:02 AM.

  6. #6
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - watch Ireland today for prelude to US

    trying to circle back to the real point of this thread ... if you understand the following, then you will understand the coming risks in the US


    (snip)"Why Ireland is Like Texas

    Let me quickly claim a point of personal privilege here and go into a little personal history that will hopefully offer some insight into the problems facing Europe.

    My grandfather was born in West Texas in 1859 (not a typo). His uncle (a Kelly and Irish) was a charter member of the Texas Rangers, which was formed around 1836. When the mayor of Waco telegraphed the Rangers in the 1870s that there was a riot in town and to please send the Rangers, he got a telegram back saying they would be there on the noon train. The mayor met the train and was dismayed to see that only one Ranger got off. When asked why he didn't have more men with him, the Ranger supposedly replied, "There's only one riot, isn't there?" That became the motto of the Rangers: "One riot, one Ranger." These were the toughest SOBs in a tough state. And the uncle was Irish to boot.

    Texas started out as a republic and was independent for nine years. The treaty that made us a state allows us to either split into five states (wouldn't that change the balance in the Senate?) or to leave the union, at our choice.

    I was once in a hotel bar (a shock, I know) somewhere in Africa and was asked where I was from. "Texas," I replied. "Interesting," came back the response; "Whenever I meet someone from America they always say they are from the US or America. Except when they are from Texas. Then they are always from Texas." Yep. Texas is a state of mind, and those who come here eventually adopt the state as their own. Just seems to happen.

    Now, a thought game. What would happen if California and Illinois and New York came to Texas and said, "We think your taxes should double so that we can finance our debt, and please buy even more of our debt next year to pay for our unfunded pensions. Oh, and while you are doing that the Fed is going to print massive amounts of dollars (far, far more than they are now) and destroy the value of the dollar, so your Texas pensions will be worthless.

    My guess is that my fellow Texans would look around and decide which Ranger to set on these guys, and make it clear that this was not the ride we had signed on for, and dust off that old treaty and work out an exit strategy.

    Understand, in the runup to the recent election our sitting governor talked about secession. I was been in meetings with Very Serious Texas Politicians where secession was earnestly discussed 15 years ago - maybe over some whiskey, but with the conclusion that Texas might be better off without the crushing debt that was coming down the pike.

    Do I think that could happen? No. The Fed will never choose hyperinflation, and I do not think you can find 60 Senators to decide that bailing out the states that let their own spending and taxes get out of control would be acceptable with their voters. Further, even though I am a very proud Texan, after 9/11 it was not the Texas flag that brought a tear to my eye, it was the Stars and Stripes. It would have to take a series of massively stupid decisions to bring Texas to the place where it would even remotely consider leaving the union.

    Now consider, if I have some pride in being Texan, with less than 200 years of history, proud as it is, what is it like to be Greek or Irish or French or German or any of the European mix? What deep cultural roots must they have? Nearly every country at one point was on top of the heap, and all have rich heritages. There is history around every corner in Europe. Except a history of unity.

    If you ask a European in that African bar where he is from, does he say Europe? No, he is from a country. (Unless he is Basque. Or Catalonian. Or Welsh.) One is not from Great Britain but from one of the divers components of the UK. And a large number of Scots want out. Could Belgium split apart? Possibly.

    But essentially, what the eurozone is asking Germany (and the Dutch and the rest of "core" Europe) to do is bail out Greece and perhaps much of the rest of the periphery, and to assume massive deficits and rising taxes. Because for there to be enough money for the deficit nations to borrow cheaply, there must be an AAA rating and a 30% cash-to-loan deposit, as I understand it. Spain or Ireland may try and borrow their share of the bailout fund (such irony), but they do not get that AAA rating. For all intents and purposes, it is on the back of Germany and, to some extent, France.

    Will German taxpayers go along with that? Will France?

    Will the Germans still finance the Greeks in 2013 when they have not whittled down their deficit and the Greeks still want to retire at 50 on full pensions? Will the Irish decide that it is in their best interests to take on massive debt so that French and German and UK banks are paid back? Can the solution to a debt problem be more debt?

    Will Texas singlehandedly bail out California so their prison guards can continue to make $100,000 a year? Tough questions."(snip)

    from

  7. #7
    God/dess threlayer's Avatar
    Joined
    Aug 2003
    Location
    Syracuse
    Posts
    5,921
    Thanks
    369
    Thanked 419 Times in 290 Posts
    My Mood
    Fine

    Default Re: weekend commentary - watch Ireland today for prelude to US

    Ireland is different in that the country didn't move as fast to control its banking system as did the US. That make make a lot of difference, which I'll stay tuned for.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

Similar Threads

  1. Replies: 1
    Last Post: 10-06-2011, 10:41 AM
  2. weekend commentary - EndGame !!!
    By Melonie in forum Dollar Den
    Replies: 0
    Last Post: 02-14-2010, 07:10 AM
  3. weekend commentary - Municipal Bond Watch
    By Melonie in forum Dollar Den
    Replies: 0
    Last Post: 12-22-2007, 06:45 AM
  4. Yet more weekend commentary on US economy ...
    By Melonie in forum Dollar Den
    Replies: 1
    Last Post: 01-08-2006, 06:31 AM
  5. Watch Dr. Phil Today!
    By AudreyLeigh in forum Body Business
    Replies: 15
    Last Post: 09-15-2005, 05:05 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •