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The USA's massive government deficit is melting swiftly - can Ireland's do the same?


GDPR

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Good news, at last, from the US economy: the government deficit is reducing. This is mostly due to increased employment, growth, higher taxes, and also investors buying interest-free bonds, that is they are giving the US government a free loan! An interest-free loan is amazing, but as this report says "people still need a safe place to put money in this turbulent world".

Our Swiftly Melting Deficit, Or How the U.S. is Killing It - The Daily Beast

A few funny things happened this spring as the U.S. hurtled along the road to fiscal degeneracy. The annual deficit shrunk by nearly a third, the size of the debt owned by investors began to shrink, and the government borrowed money for free.

Yes, the Golden Age of Deficit Reduction has begun.

The official April Treasury Monthly Statement comes out on Friday. But the Congressional Budget Office’s monthly review for April, released earlier this week, bears good news. The deficit was $489 billion through the first seven months of fiscal 2013, compared with $720 billion in the first seven months of fiscal 2012, a decline of $230 billion, or 32 percent. Meanwhile, the government collected so much money in April that it paid down about $50 billion of the debt it owes to investors around the world.

Now, the Irish economic climate is not the same as the USA's, and per capita its debt is much bigger, but could the same events trigger a similar result for Ireland? Or what could? And when?
 


petaljam

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US Deficit is 6% down from 8%

Ireland's 2013 deficit is 7.4% down from 35%

Ireland has 'melted' more swiftly than the US actually.
Yes, but with infinitely more "pain" to a huge proportion of its citizens, I believe. Obama was criticized for refusing to apply the sort of austerity measures Ireland, for various reasons, did.

I suppose it's a bit pointless comparing the US and the Irish economies, but the argument over whether austerity is the only way, vs the notion that it is important to protect people's buying power to help the economy doesn't seem to be resolving itself in favour of austerity, does it?
 

seabhcan

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Yes, but with infinitely more "pain" to a huge proportion of its citizens, I believe. Obama was criticized for refusing to apply the sort of austerity measures Ireland, for various reasons, did.

I suppose it's a bit pointless comparing the US and the Irish economies, but the argument over whether austerity is the only way, vs the notion that it is important to protect people's buying power to help the economy doesn't seem to be resolving itself in favour of austerity, does it?
Ireland didn't have the choice to continue with 35% deficits. Obama did have the option to continue with 8% deficits.
 

gijoe

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The fiscal cliff has worked out well for the US with the programmed cuts and tax increases leading to a rapid change in their debt profile.
 

Mad as Fish

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Analyzer

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We will employ the same startegy here, in that case.

Has anybody in the current Dail, any experience at printing US Dollars ?
 

Mad as Fish

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We will employ the same startegy here, in that case.

Has anybody in the current Dail, any experience at printing US Dollars ?
Do they look anything like expense claims? If not, then probably no.
 

GDPR

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Would any of you consider giving the Irish government an interest free loan?
 

zakalwe1

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i wouldn't give them free herpes
 

Analyzer

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Would any of you consider giving the Irish government an interest free loan?
We are currently giving them a return-of-principal-not-required loan. It is called PAYE.

And PRSI will probably amount to the same thing, given the way they are running down the pension reserve fund.

And they waste an awful lot of it. They do not deserve to get another cent.
 

Spanner Island

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Would any of you consider giving the Irish government an interest free loan?
Depends how much I had...

As it happens I've f*** all currently so it has to be No...

And even if I'd a few million I'd probably still say No...

If I had billions however... and no worries... and I was feeling a bit patriotic... I might say Yes...
 

Analyzer

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Would any of you consider giving the Irish government an interest free loan?
No. On moral grounds. The more they get, the more they waste, the greater the underperformance, the greater the unaccountability, and the more corruption that follows.
 

zakalwe1

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No. On moral grounds. The more they get, the more they waste, the greater the underperformance, the greater the unaccountability, and the more corruption that follows.
giving them interest free loan only rewards poor behaviour.
they have to eliminate the waste before they deserve interest free loans
 

zakalwe1

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back to the OP.
the deficit is melting away because of massive QE by the Fed.

the ECB should be doing something similar, indeed there is massive QE but the financial institutions are barred from letting it trickle down to domestic economies due to the germans irrational fear of inflation above 2%.

the QE rattling around the euro financial system is looking for a home and is therefore creating asset bubbles in the commodities markets which partially explains the increase in price of raw materials over the past year.
 

Ribeye

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Give me strenght!
 

Amnesiac

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Ireland didn't have the choice to continue with 35% deficits. Obama did have the option to continue with 8% deficits.
You undermine your credibility with these kinds of statements. The government haven't reduced the deficit from 35% to 8%. 2010 was an extraordinary year because we made what was essentially an accounting entry regarding the banks. It is not the work of a diligent FG/Lab government that brought it down from 35%.
 

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