OK, here’s a simple economics lesson that we can all understand. You cannot keep spending what you do not have otherwise you get deeper and deeper in debt. This applies to us all as individuals and it also applies to Governments. Trying to keep splashing the cash when you do not have it leads to Greece, and Ireland, and Portugal, and..need I go on? However I read these curious thoughts over on the Irish Independent and though them of comment. The article is headed ” Let’s be grateful that Ireland does not have US Style politicians”…
“The roots of this week’s US debt crisis reside in the actual political system set up by the founding fathers. With the house of representatives and the US senate both needed to pass a budget package, the result is gridlock and a growing fear of default. Essentially, the US needs to get a budget reform package over three hurdles; the house, the senate and of course the White House. When you add in one final toxic element — the Tea Party’s ridiculous opposition to any tax-raising initiatives — you get a system that is not nimble enough to cope with a make-or-break moment like the $14.3 trillion (€9.94trn) debt-ceiling issue.
Staring a default in the face from next week may yet change rigid positions and, thankfully, polling evidence is now firmly coming to the aid of US President Barack Obama. Even those who believe the US debt position is out of control do not favour the Tea Party’s brinkmanship tactics. Unfortunately, having a political system to get required work done is only worth so much. This week the bond market showed the US still able to borrow for 10 years at 3.1pc, while Ireland was looking at 12%”
If only the US founding fathers had the wisdom of the Irish liberal elite, eh? From the same article…
“In a parliament populated by ex-arms smugglers, indebted builders and pot smokers, one could be forgiven for thinking that the colourful, but chaotic, Irish political system is among the reasons the country won’t escape from its current crisis.How does one build a political consensus to cut €18bn out of an economy on a political culture that thrives on parochialism, posturing and short-term hysteria?”
Cute hoorism superior to the Founding Fathers? Well, each to their point of view I suppose.
At the heart of this deluded article is the evasion of the central fact that the Irish economy has melted down BECAUSE of reckless lending and spending, BECAUSE of corrupted politicians and bankers, BECAUSE of fiscal denialism.
I invite our US and Irish readers to comment on this. If you know me at all, you know I consistently argue for fiscal responsibility and I am 100% behind the Tea Party argument that Obama can’t spend what he doesn’t have. Those who argue for further bloated State expenditure need to ask themselves why it doesn’t seem to work. Perhaps Ireland should wish it DID have some “US style politicians” – the sort that understand the basics of how an economy functions? Just sayin’….