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Posted on Sustainabilitank.info on May 30th, 2011
by Pincas Jawetz (pj@sustainabilitank.info)

On Monday May 24, 2011, while Prime Minister Netanyahu was speaking at the AIPAC Policy Conference in Washington, and nobody of that organization was speaking of President Barack Hussein Obama anymore, the Irish were laying claim to yet another White House occupant, Brack O’Bama – a distant relative also of such US Republicans of geopolitical ¬†views AIPAC seems to prefer – George W. Bush and Dick Cheney.

The papers reported about Henry the Eighth – that is the 26 years young Henry Healy who is eighth cousin of the 44th President of the United States – Mr. Barack Obaman who cooperated with the local police and led 16 out of the 100 folks who claim relationship to meet with the President.

Olie Hayes, who happens to be 44, is the owner of the Monegall Pub, rechristened¬†“O’Bama’s Irish Pub” for the day – is the social center of this 296 people village in the geographical center of Ireland. For the day the village grew to 3,000 people. Love was flowing like the pints of beer and the First Lady was told in pure Irish spirit: “You Look LOVELY!

Obama’s great-great-great grandfather, Falmouth Kearney, was a shoemaker in Moneygall and left for the United States in 1850 at the hight of Ireland’s Great Famine for which the Queen of England took finally official responsibility in her visit to Ireland just a week earlier.

We seem to remember Moneygall (a great name) having passed by years ago. I way even have had a pint at the pub. Now everyone going there will have the chance of seeing President Obama’s bust sitting on the bar and the village will never climb down from this high point. We are sure that similar places will stay for posterity also in Kenya and Indonesia – and the US is better off with a multi-cultural President when compared to some of his predecessors who had no understanding for the world raging out there.

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Above was just the spicy introduction to some further meaty topic:
Government debt in the United States, including state and local governments, is not far behind Ireland’s as a percentage of the nation’s economy. The figures usually given for the US do not include money borrowed from other government accounts, such as the Social Security Trust Fund. When one adds these the US is clearly just in such a bad position as Ireland with the one difference – the US prints the money that Ireland cannot do. Oh well – we plan some more postings on these topics.


Obama can learn from Ireland’s ‘tough slog’ of austerity.
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By Richard Wolf, USA TODAY, May 24, 2011.

The Ireland that President Obama visits for the first time today is down on its luck and therein lies a lesson for the United States.

Gone is the economic boom that transformed Ireland over the past decade. In its place: crushing government austerity measures following a sovereign debt crisis that required an embarrassing bailout from the European Union and International Monetary Fund.

Jobs have been jettisoned, salaries slashed, pensions and health benefits reduced. Unemployment hovers near 15%. The economy, which shrank 8% in 2009 and 1% in 2010, is barely back in the black and the government is paying 5.8% interest on its bailout loans.

With Greece and Portugal struggling under their own debt burdens and bailout packages, the 17-nation eurozone has put the brakes on government stimulus measures that were needed to climb out of the 2008 global financial crisis. They’re doing what the United States has yet to do cutting back.

“It’s a tough, tough slog,” says Michael Collins, the Irish ambassador to the U.S. “Everybody has had to take a share of pain.”

The austere times shared by Great Britain, which is not a member of the eurozone but has begun a program of deficit reduction can’t be good for the U.S. economy, either. Collectively, Europe is America’s biggest trading partner.

Financial experts and credit-ratings agencies say the mess is a warning for Obama and Washington lawmakers: Get your fiscal house in order or risk the same fate.

“In the United States, there’s more time than the Irish had,” says Moody’s senior credit officer Steven Hess. “But certainly, what has happened in Ireland is a demonstration of the kinds of pressures that the U.S. faces over the long term.”

Although Ireland’s debt crisis was caused by a housing bust and credit meltdown far worse and more poorly managed than the U.S. version, there is one haunting similarity: government debt, counting what’s owed by state and local governments, is in the same ballpark.

“How much worse does it get if instead of taking care of the problem yourself, you allow the problem to take care of you?” says Joseph Minarik, senior vice president at the Committee for Economic Development.

“Ireland got to the latter point. They had the situation rubbed in their faces,” he says.

Ireland’s debt was about 25% of its economy before the housing and credit bust prompted the government to bail out the banks. Now it’s 112% and rising.

“The banks ripped us off. The government ripped us off,” says Paddy Quigley, 56, a resident of Moneygall, Obama’s ancestral home. “Our economy is down, and we need something to boost us.”

The cutbacks are a heavy tax on Ireland’s 4.5 million people. “Adjusting one’s economy in the wake of a crisis inevitably entails a decline in the standard of living,” says Bruce Stokes, a trans-Atlantic economics scholar at the German Marshall Fund of the United States.

Even while visiting tiny Moneygall (pop. 296) and speaking at a raucous rock concert in Dublin, Obama is sure to see signs of Ireland’s decline. Experts hope it makes an impression on him.

“This will be an important chance for the president to see what this has done, politically, socially and economically,” says Heather Conley, director of the Europe program at the Center for Strategic and International Studies. She cites the rise of nationalist, populist and anti-immigration groups.

Obama might rather study Ireland’s pro-business environment its 12.5% corporate tax rate is a major attraction. But some European officials have argued that the low rate should be raised to provide more revenue. Obama, caught in the middle, may sidestep the issue.

As Europe headed toward austerity in 2010, the Obama administration was still calling for fiscal stimulus measures on both sides of the Atlantic.

Today, not so much. The White House and congressional leaders are seeking ways to reduce a $1.4 trillion budget deficit just to win passage of an increase in the $14.3 trillion debt ceiling.

“I think we’re all talking the same language,” says Nigel Sheinwald, British ambassador to the United States.

Not a moment too soon, say ratings agency officials. When Standard & Poor’s said last month that its top (AAA) rating on U.S. debt was at risk, that was a signal that policymakers must get their act together.

European nations are cutting back and “that’s a striking contrast to where the debate still is in the United States,” says David Beers, S&P’s global head of sovereign ratings. “It seems to us that it requires leadership … and a kind of sustained effort to explain to voters what the choices are.”

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