Pone a España de Buen Ejemplo a Seguir contra las nefastas medidas en Irlanda

En un notable artículo, tras deplorar que los ingleses no saben idiomas y no se enteran, elogia que España logró reducir su déficit, y elogia el Plan E, y los planes de estímulo en infraestructuras, y que subió el salario mínimo  –todas ellas medidas vilipendiadas por los fascistas y economistas de la LSE que recomendaban à la irlandesa con el resultado de una tragedia irlandesa.

Pone a España de ejemplo a imitar contra los recortes a ultranza que hizo Irlanda, que han duplicado el déficit y deprimido su economía.  Ambos ejemplos, Irlanda y España, y sus diferentes resultados (bien en España, mal en Irlanda) parecen dos experimentos sociales de laboratorio.  De hecho parece que los bancos de Irlanda efectivamente declaran default à la Argentina, impagos a sus acreedores que van a tener que cargar con las culpas y pérdidas de invertir en bancos podridos.

Para empeorar las cosas en Irlanda, las compañías que se instalaron ahí cuando la platita dulce, se largan a Europa del Este. La economía de Irlanda en el boom no tenía raíz nacional y ahora se pagan las consecuencias.  La de España aunque no sea gran cosa es más nacional y resistente.

¡Macho Zapatero, se va haciendo con el monstruo!

↓ ↓ ↓  Pego el artículo tras el pliegue por si le interesa leerlo en inglés, y algunos comentarios

Dublin’s brave slashers have sent Ireland back into recession

Michael Burke: Britain would be well advised to follow Spain’s growth-boosting recovery plan rather than emulate Ireland’s dismal failure

Britons are notoriously inept at learning foreign languages. But, given London’s role as the world’s leading financial centre, it comes as a surprise to learn that the insularity applies equally to its economists, politicians and economic commentators. For, while the nation obsesses about the public sector deficit, it has failed almost entirely to learn from striking developments in the European Union and the different paths of public finances there.

Those paths are very different. At one extreme is the government in Madrid, which is has seen its deficit halve in the first part of this year. At the other is the Dublin government which has presided over a doubling in its deficit to more than 14% of GDP, higher even than in Greece. It is probably worthwhile examining how their economies arrived at these diametrically opposed points.

The Irish economy lapsed back into recession in the second quarter of this year. In reality, the domestic economy (excluding the activities of multinationals – many of whom simply book profits in Ireland to take advantage of its ultras-low taxes), has now entered its third year of slump. This compares to the European recession as a whole, which lasted a less painful four quarters. Worse, the Irish economy is also experiencing a Japan-style deflation, where the price of goods and wages are both falling. This is disastrous for all those with debts, including the government, as taxes are recouped at the new, lower price level. It is the slump in taxation receipts that is the source of the deficit, as government spending as barely risen at all following the deep cuts.

A host of rightwing commentators, and Conservative politicians including George Osborne, have argued that Dublin’s policy of ferocious cuts to public services, pay and welfare were the model to be emulated. But the combination of unrelenting contraction and deflation means that the domestic economy has now declined by more than 26% in cash terms, nearly six times the EU average. This is an Irish depression, the handiwork of Dublin’s Thatcherites so admired by George Osborne.

The contrast with Spain is dramatic. In 2009, most European governments adopted measures to boost growth. Spain’s package of measures was the largest of all, according to analysis by the European Central Bank. Most English-speaking commentary, if it has addressed developments in Spain at all, has registered the country’s meagre growth rates, up just 0.3% in the first half of this year. But beneath those headline numbers, and almost completely unremarked, there has been a surge in domestic activity, which is masked by the strong growth of imports that subtract from the headline GDP data. Consumers and non-profit organisations joined government in increasing their own spending, and only business investment continued to decline. Crucially, Spain’s measures to stimulate the economy were mainly government investment through public works programmes, as well as targeted measures to help the poor, including a modest rise in the minimum wage.

Their effectiveness is striking. The resurgence of the domestic economy has had a significant impact on public finances, as taxes have soared and the deficit has halved. This cannot be attributed to the austerity measures later imposed on Spain by a combination of the EU, IMF and the financial markets. The tax and deficit data are for the first seven months of this year, before the imposition of public spending cuts and tax increases.

These very different outcomes to the economy and to public finances offer a rare, almost lab-like experiment in the role of government policy in response to the crisis. They also highlight the relationship between public spending, the real economy and the deficit. In 2009 the Madrid government invested its way to an economic rebound which led to tax revenues recovering and a halving of the deficit. The Dublin government’s programme of cuts has led to a depression, a collapse in tax revenues and a doubling of the deficit.

The coalition government here intends to cut on scale comparable to its fellow-thinkers in Dublin. As Einstein said, repeating an experiment and expecting a different outcome is madness. To revive the economy and close the deficit, Britain needs to emulate Spain, and increase government investment.

☼ Unlike Ireland we have the option of falling back on a real economy. The so called «Celtic Tiger» was always thin air. Foreign factories are upping ship to Eastern Europe. The Irish should have saved when times were good. I have no sympathy.

☼ Doesn’t Spain have a minuscule level of debt (£61Bn) and hence, the interest rate it pays on servicing it is very low (1.8% of GDP) ?

When your deficit solely comes from a shrinking of the economy you can wait it out.

Ireland didn’t have that advantage – if it had done nothing it would have been buried as growth would never get it out of the mess.

Or put another way – Spain actually saved in the good times.

☼ I’m no Labour supporter, but I did notice something that you haven’t …. that the economy was growing under their solutions. Now that you’ve pinned your colours to the Tory/LibDem mast (the LibDems you may recall have had a bit of a turn round in their «solution» to the crisis – a 180° handbrake turn that is – that their views are quite clearly not worth listening to).

The Tories. Ah yes. The last time their solutions included pumping oil out of the NS as fast as possible at the lowest possible selling price, flogging off council homes cheap to get in a bit of cash, flogging off profitable (they had to be profitable or they wouldn’t have sold!) parts of the state – below market value, stopping almost all maintenance on schools and hospitals, flogging off the railways (parts of which have HAD to be taken back into public ownership – and the rest subsidised way beyond what they were when in the public sector, and putting 5m on the dole (where they were handily rebadged on incapacity benefit, thereby bringing down the unemployment figures and providing the current Tories with yet another bete noir!).

Still, as long as you can take 1.3 billion from the British economy and not pay a brass farthing in tax, I’m sure the garden looks rosy, and bollocks to the poor. And everyone else.

☼ Spain also pulled out of the War on Terror, when Zapatero got into power. That saved us a few Euros, too…


Por Armando

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