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I won't waste my time with that. I don't need to, naynway: You open up with a spirited defense of the rish corporation tax.

Uh, no.

I point out that you're lying about it. That's not, quite, the same thing.

I also note that if you don't like digging out references, you should refrain from making accusations about other contributors.

Even the CDU is probably to the left of both major irish parties.

And you base this on?

"I did not see any problem in Ireland that was any of my business and which could not be solved with a default. If the Irish want to blow housing bubbles, then that's their problem."

Ah, no. European tribune, remember? Everything in the EU is my business too.

To an extent. But not to such an extent that it justifies your insistence on having the Irish taxpayer bail out Deutche Bank's idiocy.

By the way does that means you will shut up about domestic german politics in future?

When the Hartz reforms are repealed, the share of wages in GDP has been restored to a sustainable level and Germany isn't sending Austrians to the ECB, sure.

Because, unlike Irish property shenanigans, German wage suppression does impact the rest of Europe.

But even after you factor out all bank related spending, there still is considerable deficit in Ireland.

So? Nobody is forcing you to buy Irish sovereign bonds.

Deficits don't matter. Income distribution matters, aggregate demand matters, physical investment matters. The sovereign deficit is just a number.

Exactly. That means that your current account deficit (or even trade deficits) argument cause budget deficits is false.

No, that's an accounting identity. It's just not the only way you can get into a situation where you need budget deficits.

But whatever. Fine. Let's cut ireland off. Do you really think the considerable primary deficit will then be financed by domestic irish creditors?

Nothing wrong with the Irish primary deficit that printing money won't solve.

What central bank? Are you talking about the ECB?

No, the Irish central bank. You may have heard about it. It's a shareholder in the ECBuBa. One of the peculiarities of the ECBuBa's construction - yet another one introduced at German insistence - is that it is not backed by a proper fiscal authority. It is backed by the member central banks, which in turn are backed by their respective treasuries. So if you don't like having the ECBuBa buy Irish sovereign bonds, just allow the Irish central bank to do so.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Aug 14th, 2011 at 09:39:18 AM EST
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