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And that is a illusion. The Irish debt did rise fast because they had a deficit caused by the economic crisis. Negative growth, a tax system depending on the house bubble, 13% unemployment will cause a significant deficit.

Take 2010. Of the famous 30% deficit, 20% or so are guarantees etc. to the banks. But 10% is the ordinary deficit. And these "ordinary deficits" alone have caused a significant part of the debt.

by IM on Sat Feb 5th, 2011 at 06:56:42 AM EST
[ Parent ]
Ten percent deficits in a serious business depression are not a bug, they're a feature. It's called "countercyclical fiscal policy." Look it up.

The ECB should be printing money on demand to support that, not demanding that the member states fund their countercyclical policy in the money markets.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:17:38 AM EST
[ Parent ]
My god. I am pro countercyclical policy. But if a 10% deficit is cause by automatic stabilisation and countercyclical policies, you can't turn around and declare the resulting debt odious debt. I mean you are not a member of the tea party after all.
by IM on Sat Feb 5th, 2011 at 07:40:58 AM EST
[ Parent ]
But that's not the part of the debt Jake, or anyone here, is considering odious (it could be, in Greece part of it certainly is)! He is saying that the Irish government had no business socializing the extra 20% GDP of private debts of Irish bankers. He is also, I think, rather warm to the idea that said bankers should go to jail (I wouldn't put it past him to even be for the abolition of private banks), and that public money is for the public good, which I think automatically disqualifies him from Tea Party membership

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sat Feb 5th, 2011 at 07:47:15 AM EST
[ Parent ]
Private banks are a perfectly fine thing to have. They just shouldn't be allowed to run their own macroeconomic policy, let alone run the government's.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:51:44 AM EST
[ Parent ]

1) I can call it odious that the ECB isn't buying those bonds at face value, and is forcing Ireland to jump through ridiculous hoops and fund in the private market.


2) Just because a third of the debt isn't odious doesn't mean the other two thirds also aren't odious.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 5th, 2011 at 07:49:21 AM EST
[ Parent ]


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