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The Luck of the Irish Runs Out

Soulskill posted more than 3 years ago | from the top-o'-the-tax-bracket-to-ya dept.

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theodp writes "Looks like threatening to take their ball and leave paid off for US tech firms. The Irish government announced plans this week to tap the welfare state and working class for much of the $20B in savings they've pledged to find over the next four years, but the austerity measures will not touch large businesses like Microsoft, Intel, Google, HP, Facebook, LinkedIn, and Pfizer, which created jobs and fueled exports in Ireland after being lured by low corporate tax rates. More than 100,000 Dubliners took to the streets to protest the bailout plan, calling for the Irish government to default on the country's debts, and demanding an immediate election. 'We should default,' said a retired union worker, 'the idea that the workers of this country should pay for the gambling of the billionaires is disgusting.'"

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809 comments

Defaulting is worse! (3, Insightful)

Kensai7 (1005287) | more than 3 years ago | (#34363358)

Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.

Re:Defaulting is worse! (5, Informative)

jchandra (15040) | more than 3 years ago | (#34363388)

Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.

Paul Krugman's latest column [nytimes.com] addresses this. The main point is that Iceland let the banks default, while Ireland took the banks debts as public debts and guaranteed it. In the end, Iceland has recovered while Ireland's people have to bear the burden due to austerity measures.

Re:Defaulting is worse! (5, Informative)

mickwd (196449) | more than 3 years ago | (#34363502)

The debts involved are massive, too.

From this article [nytimes.com] (though note it was written back in September):

"Under the current program, we estimate that each Irish family of four will be liable for 200,000 euros in public debt by 2015."

Ouch.

Re:Defaulting is worse! (5, Informative)

Anonymous Coward | more than 3 years ago | (#34363508)

Each American family of four is liable for about $200,000 in public debt.

Re:Defaulting is worse! (5, Insightful)

hairyfeet (841228) | more than 3 years ago | (#34363582)

That is why I figure the USA will default in 5 years, 10 tops. The only thing really keeping us afloat is the Fed printing money as fast as the presses will run and using it to buy our debt, basically making the money worthless. Then figure in the retiring boomers, huge masses of working poor that are only kept afloat by social programs, and the cost of two endless wars? Yeah I give it a decade tops. Enjoy it while you can folks, because from the looks of it another worldwide great depression will soon be upon us. The only question is whether we will learn from our mistakes and put heavy regulations on the banks like we did during the last one, or if those that believe in the free market fairy will win out. Without control free markets quickly end up corrupted when too much ends up in the hands of too few, just as we have now.

Re:Defaulting is worse! (4, Insightful)

khallow (566160) | more than 3 years ago | (#34363680)

That is why I figure the USA will default in 5 years, 10 tops. The only thing really keeping us afloat is the Fed printing money as fast as the presses will run and using it to buy our debt, basically making the money worthless. Then figure in the retiring boomers, huge masses of working poor that are only kept afloat by social programs, and the cost of two endless wars? Yeah I give it a decade tops. Enjoy it while you can folks, because from the looks of it another worldwide great depression will soon be upon us. The only question is whether we will learn from our mistakes and put heavy regulations on the banks like we did during the last one, or if those that believe in the free market fairy will win out. Without control free markets quickly end up corrupted when too much ends up in the hands of too few, just as we have now.

So what part of that list of woes is due to "free markets"? The Fed printing money? Retiring baby boomers? Social programs? Two "endless" wars (one which is in the process of ending, I might add)? None of those items are due to free markets. Four words describe globally the bank/real estate problem: "private profit, public risk". It's not a free market when you can pass on risk of your investments to the public.

Having said that, I don't know if you're accurate in your prediction of default. The US is a big train and there's still a window for improvement of US government finances both in the next two years and in the presidential term after that. Still, if we get another G.W. Bush or Obama, I'd have to consider default in the next ten years a real possibility.

Re:Defaulting is worse! (3, Insightful)

freedom_india (780002) | more than 3 years ago | (#34363696)

In a fiat money economy, the US does not need to default. It just needs to inflate itself out of debt.

Re:Defaulting is worse! (1, Flamebait)

Rakshasa Taisab (244699) | more than 3 years ago | (#34363732)

Lowest inflation in 50 years and you're worried about inflation... Been drinking a bit too much tea lately?

The US can't keep printing money, but that's not due to inflation or fear of devaluation. Rather it will cause an arms-race between large export countries to keep themselves competitive.

Re:Defaulting is worse! (2, Interesting)

defaria (741527) | more than 3 years ago | (#34363738)

Actually the Fed doesn't print money, the Treasury does, and even they don't really do that that much anymore either. There are other ways of pumping liquidity into to the market that doesn't involved printing anything.

Re:Defaulting is worse! (2, Insightful)

OeLeWaPpErKe (412765) | more than 3 years ago | (#34363588)

Just for comparison http://www.nationmaster.com/graph/eco_deb_ext_percap-economy-debt-external-per-capita [nationmaster.com]

It does seem Ireland is in a bit of a bind. It *is* the case, however that Irish people massively benefitted from growing this debt. The sad fact of the matter is that most countries are in worse shape than the U.S. Yes, even post-Obama (the US could probably get away with financing it's social security obligations 4-5 years on borrowed money, even if there'd be hell to pay after those years). Of course, the US cannot borrow as much per-capita as other countries, due to being the main lender of last resort for other countries. One might think this was appreciated, but far from it. The sad fact is that if you bankroll other countries, you might think they'd be grateful. That doesn't seem to be true, you'll be universally despised. Why ? Because first, giving all this money gives you power, making you a scapegoat for all sorts of problems ("why can't you just give us more money"), and ... of course, one day you'll stop (or being forced to stop) doing that, meaning that "due to America" massive cuts are necessary. This has happened in many countries.

Of course, historically, all bankers have always been near-universally despised. From the Persian empire, over Venice in the middle ages, to today. Also true, of course, is that bankers were the source of the wealth these countries had during their relative peaks, or at least you could say they were absolutely necessary.

Re:Defaulting is worse! (0)

Anonymous Coward | more than 3 years ago | (#34363636)

I wouldn't take that site's numbers too seriously, the number for external debt for Sweden (2007) is about 4 times higher than Swedens total(internal+external) debt (2007) according to the Swedish treasury.

Re:Defaulting is worse! (1)

Znork (31774) | more than 3 years ago | (#34363724)

As far as I can tell, the Nationmaster link is public+private debt. You're probably thinking about Swedish public debt only.

As governments today backstop private debt with taxpayers, it's becoming more and more appropriate to include private debt as public liabilities either way.

Re:Defaulting is worse! (1, Funny)

Anonymous Coward | more than 3 years ago | (#34363652)

hmm... I suppose you should be glad that the dollar isn't worth much these days then... :)

Re:Defaulting is worse! (1)

PolygamousRanchKid (1290638) | more than 3 years ago | (#34363608)

"Under the current program, we estimate that each Irish family of four will be liable for 200,000 euros in public debt by 2015."

Ouch.

The economist John Maynard Keynes said something like, "If I owe the bank 200 pounds, I have a problem. If I owe the bank 200,000 pounds, the bank has a problem."

In the case of Ireland, it seems that the banks seemed to have transformed their private debt, into public debt, to be paid for by their citizens.

Re:Defaulting is worse! (4, Interesting)

theVarangian (1948970) | more than 3 years ago | (#34363628)

Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.

Paul Krugman's latest column [nytimes.com] addresses this. The main point is that Iceland let the banks default, while Ireland took the banks debts as public debts and guaranteed it. In the end, Iceland has recovered while Ireland's people have to bear the burden due to austerity measures.

Iceland didn't let it's banks default as part of an act of clever crisis management even if that's what the members of the firmly right wing Icelandic independence party will confidently tell you. What happened was that a series of governments (dominated by the independence party) and stuffed full of free market fundamentalists sat around from the mid-nineties to 2008, deregulating everything, letting the banks grow at a fantastic pace and crippling the various organizations that were supposed to regulate the financial industry. For years they just held their ears shut singing: "lalalalalala... I can't hear you!" whenever somebody criticized the state of the icelandinc banks and the fact that they had become 12 times the size of the national GDP meaning that the state was therefore unable to back them up in a crisis. By the time the crisis finally hit the Icelandic government was completely bowled over. The Independence party had by now formed a coalition with the Social Democrats who proved just as useless as their right wing coalition partner and did little other than watch while the Independence party (who also dominated the central bank) fumbled about and caused things to fall apart. There were no emergency plans in place, nobody had anticipated this. After all, the infallible all-knowing free market should not act like this should it? They finally decided, at the climax of an epic panic attack, to nationalize the most endebted bank, Glitnir [glitnir.is] , which caused the whole icelandic banking sector to collapse like a row of dominos. Krugman (probably unintentionally) gives you the impression that the Icelandic Government that presided over the 2008 collapse allowed the banks to default by clever design when in reality they simply "pulled a Homer" a phrase which wikipedia defines as: "to succeed despite idiocy". Like Mr. Krugman I pity the Irish for their successful efforts to postpone the pain by a couple of years because it made the problem exponentially worse.

Re:Defaulting is worse! (1)

shentino (1139071) | more than 3 years ago | (#34363666)

Sounds like the same sort of crisis here with our own auto industry bailouts, yes?

Moral Hazard (-1, Troll)

roman_mir (125474) | more than 3 years ago | (#34363730)

This is Krugman we are talking about here, right? Krugman, the guy who believes that the gov't should hire people to dig ditches and then fill them back up just to 'create jobs' during recessions, just another Keynesian shaman, who believes that printing and borrowing money is the answer to everything, even to the problems that were caused by the printing and borrowing and low interest rates in the first place.

However he IS right for the wrong reasons, I think this is normal for him - to be right for the wrong reasons, though he is mostly wrong.

In this case it is true, there should be no moral hazard introduced into economy by any government. But that's the problem - moral hazard that gov't introduces for example by insuring bank deposits. FDIC is such a moral hazard, which was created to fight an imaginary problem (actual percentage of lost deposits during the gov't created Great Depression did not exceed 3%).

FDIC though is a terrible moral hazard (and countries with no gov't deposit insurance do much better during the recessions, because their banks are less likely to gamble with deposits by defaults, since their customers, who are lending the banks their deposit money, do not automatically assume that the banks are always solvent, that their deposits are gov't ensured, so banks have to earn trust of their customers by not fooling around with the money.)

The correct thing to do is to have gov't stay out of economic decisions, to never have gov't interfere with economy and price discovery and interest rates and money creation and not to let gov't to modify economic outcomes for anybody in the market, be it a corporation or a union or any particular individual.

Gov'ts should not be in business, especially not in insurance, they are terrible, they think they are always solvent, they don't understand risks, they limit damage to some artificial numbers (like the BP liability cap). The FDIC, the Freddie/Fannie, the health insurance, the student loans, the minimum wage, the price controls, the subsidies and bail outs, the stimulus packages, the money printing and borrowing, etc.etc.etc. All of this is gov't interfering with economy.

I am not even suggesting that gov't is evil (well, we shouldn't 'question their motives', right?)

But imagine a small planet orbiting its Sun, and then imagine a gigantic asteroid that is about to hit that planet and push it off the normal orbit.

Is the asteroid evil? Is the planet good?

But what about the ecosystem on the planet, that supports some form of life, that evolved to live there based on the planet's orbit, the climate, the specific amounts/limits of energy that the Sun is providing? Various factors we can't even think of yet. All of that is disturbed and even destroyed once the asteroid hits that planet and it goes off its normal orbit.

Same with economy. The rules of economy are quite simple - market trading based price discovery sets everything, from interest rates to the price of your doughnut, to the labor cost, to the amount of real money and wealth, to the competition between all market players, everything.

Then the gov't decides it's going to force interest rates to 0%, it will print money to cover all borrowing and private bets of preferred players, it will create various moral hazards and it will negate the rules of market price discovery, etc.etc.

The orbit is no longer what it should be, the ecosystem is screwed. All of this is because the gov't has the power to compel you to do what you do not want to do by the threat of violence.

It's similar violence that the asteroid exerts upon an unsuspecting planet, the results is similar.

Re:Defaulting is worse! (5, Interesting)

complete loony (663508) | more than 3 years ago | (#34363442)

Debt's that cant be repaid, wont be repaid. The only question is how you intend not to pay them.

Re:Defaulting is worse! (1, Informative)

OeLeWaPpErKe (412765) | more than 3 years ago | (#34363594)

Of course, if you haven't noticed, I seriously doubt any western (or eastern) economy had any intention of paying back it's debt since, oh, WWII. Except maybe the US up to 1980 or-so, but then the US followed other countries in the "who gives a fuck ! Money now" direction.

Re:Defaulting is worse! (2, Informative)

Sique (173459) | more than 3 years ago | (#34363620)

During the Clinton years, the U.S. was actually repaying its debts.

Re:Defaulting is worse! (2, Insightful)

freedom_india (780002) | more than 3 years ago | (#34363704)

Yeah, and Dubya came along and shattered that. Thanks to Dubya.

Re:Defaulting is worse! (1)

freedom_india (780002) | more than 3 years ago | (#34363694)

Bankruptcy. Simply close shop.

Re:Defaulting is worse! (1, Insightful)

Anonymous Coward | more than 3 years ago | (#34363450)

And yes, if the big tech companies leave...

You really think the European HQ of companies are getting moved to shangai... ? How many of those tech companies do it about the "high tech knowledge" in Ireland in the first place ?

Production is always cheaper in asia even with the lower taxes... . Ireland is just a way to have the cheapest presence in Europe and so to evade taxes. The "don't do evil" company uses Ireland to evade taxes to Bermuda (http://www.theregister.co.uk/2010/10/22/google_double_irish_tax_loophole/ ) 3.1 billion dollars a year, seems a big sum to do some pressure.

Re:Defaulting is worse! (1)

Sique (173459) | more than 3 years ago | (#34363626)

The problem is that Shanghai has very different working hours than Europe. So if someone from Europe calls during business hours, it will always be in the night of Shanghai. This was one of the main selling points of Ireland beside the low corporate taxes.

Re:Defaulting is worse! (3, Informative)

nospam007 (722110) | more than 3 years ago | (#34363640)

"You really think the European HQ of companies are getting moved to shangai... ?"

No, they'll move to Luxembourg, like Ebay, Paypal, Amazon, iTunes already did.

Re:Defaulting is worse! (2, Interesting)

TheRaven64 (641858) | more than 3 years ago | (#34363740)

How many of those tech companies do it about the "high tech knowledge" in Ireland in the first place ?

One of the random bits of work that I did a couple of years ago was a study for the Welsh Development Agency examining the Irish and Scottish strategies for promoting their technology industries and seeing which bits were relevant to Wales. This involved digging a bit under the bullshit that the Irish government spouts about how great it is to have companies like Dell, Apple, and Google there. It turns out that, for the most part, they weren't attracting high-tech jobs. They were attracting minimum wage jobs, answering telephones and reading from a script, or putting computers in boxes. Part of the point of encouraging this kind of industry was to build a local pool of workers with the skills and experience to develop local companies, but it completely failed there. Ireland spent a lot on some very impressive incubator units for high-tech startups. Most of them were still empty over a year after construction.

The biggest problem that Ireland has is transport. There aren't many customers for high-tech goods in Ireland (meaning corporate customers - the population isn't big enough to support much by way of consumer goods). To sell anything, they need to go to the UK or mainland Europe. This means flying (no Eurostar in Ireland), and that really means going from Dublin, which is about the most expensive place in Ireland to put a company. This means that it's hard for a company that doesn't already have an international distribution chain set up to have a base in Ireland.

Not so fast... (3, Insightful)

Anonymous Coward | more than 3 years ago | (#34363512)

Going default will be a short-lived remedy. The country will go back to 1990 in terms of market appeal and productivity. And yes, if the big tech companies leave, the hope of reacquiring a high-tech knowledge industry will go away as well.

The main problem is the fact that big companies now are so powerful that they can hold entire tax systems hostage... they can play countries out against each other.
But instead of having a single EU corporate tax system (which imho would make sense), we have all kinds of other silly EU rules... and corporate taxes keep dropping in a futile attempt to lure more big business.

Governments should realize that big companies won't leave overnight. It'll take a little while to move people and offices.

At the same time, a lot of countries are suffering from the crisis - so if the Irish increase their tax together with a number of other countries, to give a clear signal, then they might get away with it... Shareholders and investors in stock markets should pay a part of the crisis too - they are at the root of its cause.

Re:Not so fast... (1)

khallow (566160) | more than 3 years ago | (#34363722)

At the same time, a lot of countries are suffering from the crisis - so if the Irish increase their tax together with a number of other countries, to give a clear signal, then they might get away with it... Shareholders and investors in stock markets should pay a part of the crisis too - they are at the root of its cause.

There was a fair mechanism for assigning blame: bankruptcy. Since that was subverted or bypassed in Ireland (as it was in a number of other places), it's too late to assign blame to the shareholders and investors in the failed businesses. Given that Ireland stepped up and took on all that liability, it's now the Irish taxpayers' fault.

This is why (2, Insightful)

Anonymous Coward | more than 3 years ago | (#34363362)

the mobility of capital is a good thing.

Why: Rob and Run? (0)

Anonymous Coward | more than 3 years ago | (#34363470)

... $SUBJECT is a sincere question!

Re:Why: Rob and Run? (0)

Anonymous Coward | more than 3 years ago | (#34363514)

if MAX($SHORT_TERM_PROFIT)

Re:This is why (5, Insightful)

MachDelta (704883) | more than 3 years ago | (#34363506)

According to whom?

Surely it's not the workers, because when Big'n'Big Co pulls up their tent pegs and moves shop, all the workers are suddenly unemployed.

It's probably not the consumer, because when Big'n'Big Co finds a way to half their cost of production, it's not guaranteed to drive prices down. Why bother cutting prices and taking a bigger market share when you can just shovel up a pile of cash big enough to buy your competitors (or a controlling interest in their stock)? Hell, why not just collude with your competitors to keep prices artificially inflated - then everyone's happy!

Surely then, it is the desperate - those poor starving people in $Third_World_Nation who desperately need employment of any sort. Except that, after their standard of living starts to rise, Big'n'Big Co just moves on to the next shithole and leaves the desperate unemployed too.

Well fuck, if it's not the middle class or the lower class, who the hell is left?
Oh, right, the bourgeois. Well, as long as they're doing all right, everything is just peachy! Hurray for Capitalism! :P

foreign companies (0)

Anonymous Coward | more than 3 years ago | (#34363366)

I am curious how important foreign companies really are for Ireland. Are there any figures to support their government's decision ?

Re:foreign companies (1)

maxwell demon (590494) | more than 3 years ago | (#34363618)

I'm pretty sure the foreign companies had little influence. Ireland decided to take credits from the EU emergency fonds, and those credits come with conditions. In short: Ireland doesn't change due to the threat of US companies. Ireland changes due to the conditions of other EU countries.

Another thing they'll probably will have to change is the low taxes for companies. I'm pretty sure the companies didn't demand that.

Denial... (1, Insightful)

sznupi (719324) | more than 3 years ago | (#34363372)

'We should default,' said a retired union worker, 'the idea that the workers of this country should pay for the gambling of the billionaires is disgusting.

Yes, the "billionaires" lead the whole pack, and all that. However - not many of the proles stop to look around and wonder what brings the semi-dream around them while it lasts - but they do enjoy it. And cherish promises.

That doesn't go only for the Irish of course.

Default? Really? (1)

igreaterthanu (1942456) | more than 3 years ago | (#34363374)

calling for the Irish government to default on the country's debts

Who would ever lend Ireland money ever again?

Re:Default? Really? (0)

Anonymous Coward | more than 3 years ago | (#34363392)

In reality, that might not be such a bad thing long term - if the only loans the nation can get are at junk bond rates, that might be enough to enforce budget discipline and prevent future crises. The flip side is that national debt is held by a lot of ordinary people and their pension funds, so a government default does hurt a lot of the general public directly.

Re:Default? Really? (4, Informative)

khchung (462899) | more than 3 years ago | (#34363400)

Who would ever lend Ireland money ever again?

Good, then maybe it will force their politicians to actually make do a balanced budget rather than keep running a deficit, spending money they do not have, effectively using the country's future income to secure their own positions in elections.

Well, one can hope.

Re:Default? Really? (3, Insightful)

igreaterthanu (1942456) | more than 3 years ago | (#34363420)

Government debt is also a useful tool (such as borrowing to buy infrastructure) but like any tool there are ways to abuse it. I wouldn't be so quick to throw it away.

As for making a balanced budget, that is the responsibility of the citizens to vote for reasonable candidates.

Re:Default? Really? (1)

MachDelta (704883) | more than 3 years ago | (#34363460)

You mean deficit. Debt is bad.

Re:Default? Really? (1)

mweather (1089505) | more than 3 years ago | (#34363572)

How do you run a deficit without generating debt?

Re:Default? Really? (5, Funny)

ebuck (585470) | more than 3 years ago | (#34363604)

How do you run a deficit without generating debt?

Leprechauns

Re:Default? Really? (2, Insightful)

Znork (31774) | more than 3 years ago | (#34363556)

Who would ever lend Ireland money ever again?

Who would ever lend insolvent banks money again? It's not Ireland that went bust, it's Irelands banks. The Irish government just got suckered into backing them.

The answer is, of course, the next sucker. Which we have a financial system full of, as if anyone loses their money lending to bums, the taxpayers will get to pay for it...

But really, would you feel safer lending money to someone who will probably default in the near future as they carry unmaintainable debt than you would lending money to someone who'd restructured their debt to manageable levels? Neither would be very palatable in a sane system, but that's not what we have, and you as a taxpayer will not get a say in whether to lend or not.

People would protest against raising corp. tax (4, Insightful)

zoney_ie (740061) | more than 3 years ago | (#34363376)

Look, left-wing parties are likely to do well in our next election, but no-one sensible here, left or right, wants to raise the corporation tax rate. These companies provide our jobs.

If a raise would be announced, ordinary people here would really start to protest.

Re:People would protest against raising corp. tax (2, Interesting)

Haedrian (1676506) | more than 3 years ago | (#34363410)

But apparently the jobs being provided aren't going to be very supported when the level of education crawls downwards. Lots of money in education is needed for those sort of jobs. I think in the end its going to be unsustainable - if they'd need to get foreigners to do all the work for them - it'll be cheaper to just relocate. Maybe.

Re:People would protest against raising corp. tax (3, Insightful)

zoney_ie (740061) | more than 3 years ago | (#34363458)

Actually education is being given more preferential treatment in cuts being minimised compared to even healthcare.

It's likely to be relatively unaffected by the cuts in government spending. Admittedly that means kids still going to school in rotting >century old buildings and temporary pre-fabs, but the level of people's education is not likely to drop. Quite the reverse given the fear of joblessness.

Re:People would protest against raising corp. tax (5, Insightful)

Anonymous Coward | more than 3 years ago | (#34363424)

These companies provide our jobs.

If all the jobs in your country, or even a significant majority of them, are provided by international megacorporations and conglomerates that can and will move them elsewhere if it benefits them, and use them as blackmail material to get the laws they want, then you've got bigger problems than whether to lower taxes or not.

Re:People would protest against raising corp. tax (5, Insightful)

OneMadMuppet (1329291) | more than 3 years ago | (#34363554)

The problem isn't the multinationals that provide jobs - they will stay. Intel can't move a FAB overnight. The issue is with the shells like Microsoft Licensing - that employ 5 lawyers, 5 accountants and a janitor - and that do nothing but funnel profits. THESE companies will up and leave in a heartbeat, because an extra 2% on $62BN is ENORMOUS. At the moment the corp tax income on these companies is E110bn - and the IMF money is nowhere near that. Raising the corp tax rate might mean losing 50-100 jobs, mostly accountants and lawyers (not exactly going to get a sympathy vote from most people), but could leave the country more than E50bn a year down - not really an option right now.

Re:People would protest against raising corp. tax (0, Redundant)

bjourne (1034822) | more than 3 years ago | (#34363670)

Hahaha. Yeah right.

Re:People would protest against raising corp. tax (1)

Znork (31774) | more than 3 years ago | (#34363688)

The actual corporate tax rate isn't the most significant problem anyway, the problem is the holes that make the rate 2-3%. And those holes do not provide jobs; running a tax scam isn't exactly labour intensive. There hasn't been much said about whether or not those holes will be closed.

On the other hand, on the more labour intensive business a 15% or 25% corporate tax rate isn't going to be that significant a factor compared to prevailing wages, availability of appropriate labour force, etc. If it were going to be moved to a low cost country the Irish 60% wage growth between 1999 and 2008 would be a rather more compelling reason to move such business.

Personally I think the Irish have been rather whipped by the multinationals; first paying to save other countries banks from taking a hit on bad loans, then caving to whines about corporate taxes. Maybe some Irish politicians could ask Pfizer for the development of spine growth hormones in exchange for their low taxes.

Re:People would protest against raising corp. tax (2, Funny)

azaris (699901) | more than 3 years ago | (#34363710)

Look, left-wing parties are likely to do well in our next election, but no-one sensible here, left or right, wants to raise the corporation tax rate. These companies provide our jobs.

If a raise would be announced, ordinary people here would really start to protest.

Ireland is not the US, where lower-middle class working people will protest on the streets saying that Mario Antoinette should have more cake.

It's not the country's debts. (5, Insightful)

dackroyd (468778) | more than 3 years ago | (#34363382)

It's the private bank's debts.

For some unknown reason the Irish government decided to guarantee all debts by banks in Ireland including banks that are owned and run by people who are not Irish or based in Ireland. These debts were not sovereign debts until the Irish government decided to unilaterally back them without any good cause. They did this back in 2008 [wsws.org] and it's only now that they massive amount that they've basically handed over to private investors is becoming apparent.

It's pretty nuts that private investors had hoped to make money by investing in Irish banks - but now that they're actually facing losses the people of Ireland are going to step up and cover all these debts. So for the private investors it's a case of head I win, tails you lose - where there is no risk of the private investors losing any money - and no chance for the public to get a share of the profits that banks were making in the good times.

Re:It's not the country's debts. (1, Interesting)

Anonymous Coward | more than 3 years ago | (#34363492)

Mod up. Exactly right.

Don't Guarantee ALL. Hand scrutinize all debts, and default on any that are over the size of the largest Irish one (meaning nobody in Ireland loose, ony foreigners).

And you CAN default on debts and keep local companies - the two arguments are not related.
Ony the Irish taxpayers are being stiffed.

Re:It's not the country's debts. (2, Insightful)

icebraining (1313345) | more than 3 years ago | (#34363678)

"Unknown reason"? It's called FMI and EU pressure.

You voted for it! (0, Flamebait)

Anonymous Coward | more than 3 years ago | (#34363386)

I'm a little sick of all those who live in a democracy, who hailed capitalism as the new world order and only now, that they find themselves at the short end of it, find others (government, banks, world bank, Europe, China) to blame. You voted for this! This does not mean that you can be dissatisfied with your government but please don't forget your own role in this. What did you do from 2000 to 2010 if it was all so wrong?

Why it won't affect the companies.. (1)

RabbitWho (1805112) | more than 3 years ago | (#34363390)

Ireland is being criticized by the EU for unfair tax exemptions for certain businesses, they say other EU countries can't compete. But 20% of Ireland's GDP comes from foreign companies so there's no shaking them.

Tech jobs are the only jobs that are still available in Ireland. We went from 4% unemployment to 12% in 2 years. [rant]There's a levy on the wages already, they argued that we had one of hte highest minimum wages in Europe.. but we also have one of the highest costs of living.. they're raising taxes on the poor, the rich already have to pay 40% tax so it would have been insane to touch that... but people are still complaining about it (go figure). the HSC has already done everything possible to destroy free medicine (and blamed it on the chemists by trying to force them to sell things at a loss and then saying with the support of the press they are evil capitalists for refusing) health care is damaged, free education is gone, language support for immigrant children gone, class sizes bigger..... Oh I could go on and on but I'm ranting.. all the perks are gone. The country is fecked, but no one is going to starve. And a poor person in ireland is still financially 150 times better off than a poor person in America, our social welfare never runs out, and everyone is always entitled to whatever health care they need. [/rant]

Re:Why it won't affect the companies.. (4, Informative)

zoney_ie (740061) | more than 3 years ago | (#34363416)

The rich aren't paying 40% tax! The top tax rate is 41% but this is only paid on income over €36K (single) or €45K (married) or €73K (married both working).

But when you factor in people's tax credits and various tax reliefs, the statistical data for workers in Ireland shows that income tax peaks at about 20% of income. Those with a *lot* of income who would in theory be affected more significantly by the 41% tax rate actually pay tax advisors and use various schemes so that at the top end, the income tax proportion drops below 20% again!

Most workers pay almost no income tax - as you pay none at all up to something like €17K (when you factor in tax credits). Median income is about 20K, and ordinary workers would pay a max of about 10% effective tax rate. On an above-average income, I pay about 12% total in tax.

10% is the tax rate some countries charge the low paid! (as opposed to 0% here!)

We do have many other taxes, but that's to make up for low income tax.

Of course all this is only valid until the budget on 7th December.

Re:Why it won't affect the companies.. (1)

RabbitWho (1805112) | more than 3 years ago | (#34363474)

Tax credit is now €15,200 since the 4 year plan.

To be honest 40% is much too high anyway. If you have a high income it's because you generate a lot of money, you deserve it (unless you're a banker), you are an asset to the country and are probably bringing in more money than you're being payed.

Re:Why it won't affect the companies.. (4, Insightful)

rtb61 (674572) | more than 3 years ago | (#34363550)

No one ever 'generates' a lot of money, certainly the government mints print it but for every one else making s lot of money is all about being greedy. Paying very little for something and then putting a huge markup on it and selling (importing cheap junk), employing people where you have to capital to buy equipment and they do no and basically selling they're labour for much more than you pay for it, inheriting large sums of money and buying up all the income produce property you can, gambling with other peoples money at financial institutions, oh wait, they is always prostitution they certainly do generate money with their assets but they are the only ones (Psychopath pimps still take the lions share, hmm, much like the rest of the economy).

Human society is a function of all humanity, those that profit most by it should pay the most for the benefit they gain, of course being greedy, they just want more. You neither read, write nor even speak without the support of the rest of humanity. It is time to put a stop upon preying upon the rest of human society and start working together for mutual benefit.

Re:Why it won't affect the companies.. (2, Interesting)

roman_mir (125474) | more than 3 years ago | (#34363612)

Marxist much?

Without capital there are no jobs, people with capital are the ones that do in fact provide jobs by using the capital to organize tools/land/labor into a system that adds value to the society in total.

Saying something to the tune of "importing cheap junk" is completely blind to the fact of how difficult it actually is to set up a working business, to meet the payroll every month, to keep the business afloat by somehow ensuring that business stays cash flow positive.

If you are not a gov't created/maintained/subsidized/bailed out monopoly, you are actually competing against such monopolies as well as you are competing against other legitimate businesses (and when I say 'legitimate', I do mean businesses that are not subsidized by the gov't.)

If it was a trivial matter - to "import cheap junk", to make it all work, to have a business that doesn't just run out of saved/borrowed money and die, something that actually works and employs people, while at the same time benefiting the society by providing it with wealth (and wealth IS the 'cheap junk', it's not money. People want 'cheap junk' and they are ready to part with their money to get it, because they it's this 'cheap junk' that gives them the quality of life they enjoy), it takes very hard work, very stressful hard work, very time consuming hard work, the kind of work that you do not do when you are on the clock, the kind of work, where you either really compete by innovating, by constantly working.

If it was as trivial as you make it out to be, then obviously there would have been many more companies doing it and there would have been much fewer people looking for just a 9-5 job.

Most people prefer not to work that hard, most people prefer the stability of a paycheck, most people do not in fact create wealth for their societies (and I mean wealth, as opposed to money.)

It's always easy to diss somebody who is taking this work and making it big while doing it, but this completely disregards the fact that most who try to do this - they fail. They lose money as opposed to making money. They end up losing time and capital and a calm sort of life, which most people have when they are working on a salary. Working for yourself, taking a risk, building a business, hiring people and ensuring they do get their paycheck at the end of the month, getting the business into the cash positive territory, growing a business, generating a profit and all of this, while providing the society with the wealth it is demanding, this is truly amazing anybody can even do it.

I put the regular businessmen much higher on the ladder of achievers than most other people, probably save for the most prominent scientists, who are at least at the same level if sometimes not more in terms of wealth generation for the society in total.

Indeed the highest ranking people AFAIC (and I really mean it) are those, who first invent/build something, some new idea, some new invention and then are even successful at bringing the idea to life in form of some useful product.

It's much harder to do that, than to be a pure scientist, but of-course we need pure scientists as well, it's not a or-or proposition.

Dissing businessmen who are there, making the society wealthy, that's easy. To understand what many of them actually do and how this increases the overall quality of life for all people, while HOPEFULLY making them rich, that's different.

AFAIC again, these people deserve much more respect than they actually get from the general public, but they are mostly hated I'd say due to the fact that SOME of them do end up much wealthier than any normal 9-5 worker and thus people are jealous of them and end up hating them, while not realizing even that they are benefiting from the dedicated and hard work of these very people through everything, from job creation, to wealth acquisition, to generally a basically working economy and stable and improving society, which depends on a working economy.

Re:Why it won't affect the companies.. (3, Insightful)

Sique (173459) | more than 3 years ago | (#34363662)

To be honest, during the golden 60ies in the U.S. the top tax rate was 91%, and the country was wealthy and strong.
To be able to earn such a big income means that there are lots of external factors you can make use of, as in a stable society, a well maintained infrastructure, a strong military and low crime. And the more money you make, the more you use this infrastructure. People at the top easily forgot how much the country is supporting them, they live under the surreal impression that somehow they pay for everthing themselves.

Re:Why it won't affect the companies.. (5, Insightful)

Teun (17872) | more than 3 years ago | (#34363664)

And because the Irish pay so little tax other Europeans have to raise €85,000,000,000.- to bail them out.

Most of that money comes from countries where income tax is well above 50% (or even 72% in Denmark).

Yes even the Danes that don't use the Euro have pledged a substantial guarantee.

In the mean time two of the countries with the highest taxes, Denmark and The Netherlands, have the lowest unemployment of the Union, around or even below 5%.
The implied claim high taxes destroy the economy is yet to be proven.

Luck of the International Bankers continues (4, Insightful)

vorlich (972710) | more than 3 years ago | (#34363406)

Should be the more appropriate headline here.

Re: Luck of the International Bankers continues (3, Insightful)

Black Parrot (19622) | more than 3 years ago | (#34363566)

Should be the more appropriate headline here.

Yeah, in the USA we bailed out the banks. Could have bailed out the homeowners and thereby saved both them *and* the banks, But no, we only look after the big boys here.

Re: Luck of the International Bankers continues (1)

ScrewMaster (602015) | more than 3 years ago | (#34363736)

Should be the more appropriate headline here.

Yeah, in the USA we bailed out the banks. Could have bailed out the homeowners and thereby saved both them *and* the banks, But no, we only look after the big boys here.

When lobbyists have more power than voters, that's exactly what you would expect to happen.

Don't you just love corporate responsibility? (-1, Flamebait)

Anonymous Coward | more than 3 years ago | (#34363408)

It surely serves the people well when corporations look out only for their own interests, and selfishly ignore the consequences of their own actions.

Ireland decided to get in bed with a bunch of tramps, and now they're paying the price.

Hopefully even if they don't learn a lesson from this, somebody else will take their mistake for what it is, a clear sign that these folks don't have any interests in mind but their own.

If Ireland has any sense, they'll realize they'll be forced to go along, but they'll get every single concession they can out of the business.

Non-story (4, Interesting)

ababydingo (1948956) | more than 3 years ago | (#34363428)

There was never any serious proposal to raise the corporation tax rate in Ireland, it's the one non-negotiable position of the Irish government and always has been. Having a low rate is also popular generally, though many would feel the rate could go up a few percent (though still well below other many other European countries) so that corporations do contribute more, but no-one seriously proposes raising it dramatically. What should perhaps be changed are the rules about moving profits around so that multinationals actually pay the 12.5%. I read this week Google only paid a few million in tax last year. It's not the rate, it's the application of the rate. Germany may have a nominal rate much higher than Ireland but the effective rate is often much lower due to special tax breaks in certain sectors.

Ireland should be uninhabited (-1, Flamebait)

Anonymous Coward | more than 3 years ago | (#34363430)

Ireland had an economic crisis before with the potato famine and the constant terrorism with the IRAs as well means that Ireland is more trouble than its worth. Let Ireland sink due to global warming already.

Corporations are Assholes. (5, Insightful)

Arancaytar (966377) | more than 3 years ago | (#34363440)

As usual, many people are quick to defend these pricks, saying that if it weren't for them, everyone would be out of a job. Yes, the economy is in their power. Calling that a mutually beneficial relationship sounds like Stockholm syndrome.

If your very survival depends on receiving a living wage from a corporation that can simply choose to go away if it is asked to pay for the infrastructure it also uses, then you are not living a "dream" generously provided by altruistic corporations, but in slavery to organizations who can let you starve if they wanted to. Not only workers, even governments are forced to debase themselves before these corporations, lowering their living standard, their wage expectations, cutting their social system and their taxes bit by bit to compete with other countries that are forced to do the same.

Ireland, and the entire European Union at that, should make a stand against this and play hardball. The fact is that while corporations can move their production elsewhere, they do have to sell something eventually. A high-tech market requires a high-tech industry to flourish: If corporations leave the country, the economy goes to shit and nobody can afford the flashy gizmos these corporations are selling. Standardize the tax hike over all EU states, accompany it with an import tariff on technology not produced inside the country, and suddenly paying a little more corporate tax will seem like a much better alternative. The workers are not only their slaves, but also their customers.

Re:Corporations are Assholes. (1, Troll)

khallow (566160) | more than 3 years ago | (#34363622)

As usual, many people are quick to defend these pricks, saying that if it weren't for them, everyone would be out of a job. Yes, the economy is in their power. Calling that a mutually beneficial relationship sounds like Stockholm syndrome.

It's also a correct observation. We do have a mutually beneficial relationship with businesses, including corporations.

If your very survival depends on receiving a living wage from a corporation that can simply choose to go away if it is asked to pay for the infrastructure it also uses

This bugs me a lot. There's a zillion people talking about "infrastructure" in the comments, but I doubt most such government activity benefits rather than hinders business.

For example, every developed world country has a big public pension problem. Public pensions don't provide a whit of benefit for business. Instead they merely drive up the cost of labor and/or increase government spending. Yet corporations "use" this "infrastructure". Regulation is another net negative for business (especially the rules on how to conduct business such as hiring and firing workers), yet they pay for (that is, "use") it, both in taxes and compliance. Then there's a considerable amount of rent-seeking (mostly in the form of subsidies). Sure some businesses benefit from that, but it's collective harm for most business. Google doesn't take advantage of agriculture or aerospace subsidies.

Finally, I gather from comments that a big portion of the current Irish budget problem is debt for bailing out banks. Yet another activity that didn't benefit Google, but Google is expected to pay for.

Re:Corporations are Assholes. (1)

jpatters (883) | more than 3 years ago | (#34363650)

Public pensions and "regulation" are not infrastructure. Roads, power lines, schools, public transportation and such things are infrastructure, and businesses of the kind that we are talking about could not exist without it.

Re:Corporations are Assholes. (1)

khallow (566160) | more than 3 years ago | (#34363698)

Public pensions and "regulation" are not infrastructure. Roads, power lines, schools, public transportation and such things are infrastructure, and businesses of the kind that we are talking about could not exist without it.

So how much of what a government spends actually finds its way to genuine infrastructure? In other words, why harp on how business skimps on paying for infrastructure, when a considerable portion of taxes don't go towards infrastructure. And of the part that does, much of it is spent poorly. As I see it, there is such a thing as paying too much for what you get.

Re:Corporations are Assholes. (1)

JockTroll (996521) | more than 3 years ago | (#34363676)

The EU can make a stand, and then go broke. Those firms can dump a great number of unemployed people into the governments' lap, more they can afford to deal with. In less than a year, the EU will offer human sacrifice to have those corporations back.

It's OK To Raise Taxes On Rich Corps. (0, Troll)

BlueStrat (756137) | more than 3 years ago | (#34363478)

Nothing bad will happen if corporate tax rates are raised in Ireland! That's just fear-mongering by the poor-hating conservatives!

The US has been doing that, *and* heaping on all kinds of other taxes, *plus* tons of regulation on manufacturing and business, along with increasingly-heavy emphasis on unionization with incredible pension and healthcare costs for ages now, and our economy, trade balances, and employment levels are just...oh, wait.

Never mind. Carry on.

Strat

Re:It's OK To Raise Taxes On Rich Corps. (2, Funny)

blackpaw (240313) | more than 3 years ago | (#34363584)

Where's the "Drunk on the Kool Aid" mod when you need it ...

Re:It's OK To Raise Taxes On Rich Corps. (1)

BlueStrat (756137) | more than 3 years ago | (#34363674)

Where's the "Drunk on the Kool Aid" mod when you need it ...

Oh, my! I totally concede all the ideas & principles in my previous post to your brilliant "refudiation".

I see that the tax money taken from struggling families and used in your education was well-spent.

Strat

Re:It's OK To Raise Taxes On Rich Corps. (2, Interesting)

Anonymous Coward | more than 3 years ago | (#34363630)

Nothing bad will happen if corporate tax rates are raised in Ireland! That's just fear-mongering by the poor-hating conservatives!

The US has been doing that, *and* heaping on all kinds of other taxes, *plus* tons of regulation on manufacturing and business, along with increasingly-heavy emphasis on unionization with incredible pension and healthcare costs for ages now, and our economy, trade balances, and employment levels are just...oh, wait.

Never mind. Carry on.

Strat

Ireland has been the European experiment in being extremely 'conservative' and corporation friendly, extremely low taxes, friendly regulation, etc. Look where it got them. Then take a look at fx Scandinavia.

Re:It's OK To Raise Taxes On Rich Corps. (1)

GrumblyStuff (870046) | more than 3 years ago | (#34363758)

Raising taxes? Try again. http://www.irs.gov/pub/irs-soi/02corate.pdf [irs.gov]

Regulation? Ha. Regulatory agencies are so fucking stuffed with corporate cronies it's not even funny. You got oil exes in what formerly was known as MMS (Minerals Management Service) and Wall Street guys have been fucking tearing up regulations since the 1980s.
http://crooksandliars.com/susie-madrak/why-were-bp-executives-hired-mms-fox [crooksandliars.com]
http://www.thedailyshow.com/watch/wed-april-15-2009/elizabeth-warren-pt--2 [thedailyshow.com] (eloquently explained by Elizabeth Warren)

What's wrong with regulations anyway? 'cause I really want lead paint on my cadmium drinking glasses and diethylene glycol in my toothpaste and melamine in my pet's food and my car to explode into a fireball if rear ended and my heating furnace to leak carbon monoxide and e. coli on my chicken and spinach and botulism in my can food and motor oil used in cosmetic surgery and shall I go on?

Unionization? What decade are you from?

Never mind. You're just trollin'.

CT rises were never on the cards (1)

petes_PoV (912422) | more than 3 years ago | (#34363484)

The only people who wanted the Irish to raise their corporate tax levels were other countries who had, themselves, got higher rates of these taxes. It's a given that no country has the right to determine the tax rates in another country - short of invading them. The Irish know that as did these french^H^H^H^Horeign governments. What they were saying was purely for domestic consumption - since they would not have gained anything by an increase. The companies affected would NOT have moved their operations to (say) france or germany, as those places still have higher CT rates than an increased irish rate would have been. Plus, they make it harder to employ people "flexibly", have higher costs of doing business and don't speak english.

If you really want to know, from The Economist (4, Insightful)

PolygamousRanchKid (1290638) | more than 3 years ago | (#34363490)

http://www.economist.com/node/17577107 [economist.com]

I watched a German documentary this morning about how the Euro was bad (German is not my mother tongue, but I am fluent and could understand everything). Some of the stuff in that was political dynamite: I don't think that politicians in Europe understand the powder keg that they are sitting on.

From the The Economist article,

The most concerned onlooker is Germany, which sees its credit lying behind the entire euro area. As ever, Europe’s biggest tabloid, Bild, captured the mood this week, asking “First the Greeks, then the Irish, thenwill we end up having to pay for everyone in Europe?

Oh, let's piss off the Germans . . .grand idea . . . in Europe, that always ends in tears.

Re:If you really want to know, from The Economist (1, Interesting)

Anonymous Coward | more than 3 years ago | (#34363682)

Oh, let's piss off the Germans . . .grand idea . . . in Europe, that always ends in tears.

Some people here in Germany would love if that were true (in the sense that people in Europe really would be polite or at least thankful for lending them a helping hand (in exchange for buying from German arms manufacturers in the case of Greece IIRC)). I for one am glad that the image of Germany had changed from something to be afraid of to something to at least respect, maybe even like in some instances. The image of Germany for all its helping fellow European nations (say what you will, even a selfish deed with selfish conditions that does good for the receiving end is good for both not only the giver) seems to be deteriorating again recently. I guess there will always be malcontents and chronically rebellious people everywhere who think that burning down banks is a way to change what they claim to care about. And then there are the tabloids who essentially do the same (sometimes worse), but purely in written form. It were great if the current crisis would teach people a little about how futile it is to just (want to) bash each others brains in and that talking and trying to put yourself in the other's shoes sometimes can go a long way.

Re:If you really want to know, from The Economist (0)

Anonymous Coward | more than 3 years ago | (#34363684)

Perhaps we should simply annex the rest of the EU into the Federal Republic of Germany? At least then we would have a properly functioning democratic system with checks and balances, including a worthwhile constitutional court.

Re:If you really want to know, from The Economist (0)

Anonymous Coward | more than 3 years ago | (#34363706)

...

Oh, let's piss off the Germans . . .grand idea . . . in Europe, that always ends in tears.

Usually only for the French, and sometimes the Belgians as the Germans have to march through Belgium to conquer France. And the French are so nice about it. Paris has all these wide tree-lined boulevards so the Germans can even march in full formation - in the shade no less.

In fact, it's been about 70 years since the German army marched through Paris. They're long overdue!

Do No Evil (1)

retech (1228598) | more than 3 years ago | (#34363496)

For a company that is all about being good, Google strong arms its tax sheltered position quite liberally across the globe. It's really sad to see that they cannot afford to pay taxes equally for the infrastructure from which they suck. Fucking pricks.

Why are they broke in the first place? (1, Insightful)

Anonymous Coward | more than 3 years ago | (#34363504)

'We should default,' said a retired union worker, 'the idea that the workers of this country should pay for the gambling of the billionaires is disgusting.'"

Why are they broke in the first place? Isn't it the welfare state's massive spending? Doesn't sound like billionaires gambling to me.

Re:Why are they broke in the first place? (4, Informative)

EllisDees (268037) | more than 3 years ago | (#34363542)

No, they are broke because the government decided to cover the private bank's debt to the tune of a hundred or so billion euros.

Default is even worse (0)

Anonymous Coward | more than 3 years ago | (#34363548)

If a country defaults on its bonds, it will face difficulty in borrowing in the future. Consequently a country would need to have a balanced budget which leads to _more_ spending cuts or/and tax increases.

a radical solution (0)

Anonymous Coward | more than 3 years ago | (#34363558)

Why cant they simply impound the corporate assets, imprison/publicly execute the execs under some made up law and sell off all the impounded corporate property incl. IP and know-how to the highest bidder? Methinks that would be profitable for the state AND show multinationals who _really_ has the power. Or is the irish government afraid to exercise their sovereign rights?

A parable on taxing the rich (0, Insightful)

Anonymous Coward | more than 3 years ago | (#34363598)

A parable on taxing the rich: http://gregmankiw.blogspot.com/2007/03/barstool-tax-policy.html

Annexation (2, Funny)

Edward_Colgate (1264706) | more than 3 years ago | (#34363610)

The UK should buy Ireland, It'd look much neater on a map.

Re:Annexation (1)

JockTroll (996521) | more than 3 years ago | (#34363648)

If it leads to another Irish rebellion and more dead brits, I'm all for it. "And it's down in the Bogside, that's where I long to be/Lying in the dark with a Provo company/A comrade on me left and another on me right/ And a clip of ammunition for my little Armalite." Aaah, the good times.

Re:Annexation (1)

maxwell demon (590494) | more than 3 years ago | (#34363660)

I don't think the UK currently would have the money for that.

What's the big deal? (1)

flnca (1022891) | more than 3 years ago | (#34363716)

The EU will pump € 85 billion into Ireland [heute.de] .

missing the point about bank debt (0)

Anonymous Coward | more than 3 years ago | (#34363718)

Equity tied to property is how real value has been disconnected from financial worth. To our parents the roof over your head was never considered an investment or a source of income. It was deemed a necessity that had to be payed for and really had little to do with an individuals financial future other than as an expense. Here we are creating an economy around an investment that has no real substance. It produces nothing.

So essentially the banks have financed huge amounts debt to be repaid by individuals that might not have work next month. So as these individuals lose their employment they count on being able to flip their mortgage in a hurry and perhaps cash in some of the imaginary wealth that the property has gained over a short term. Then a bank finances someone else at a greater principle amount and the individual that flipped the property has some small income to get by till they find another job.

This is the financial equivalent of a snake eating it's tail and will be the downfall of financial systems in the British Isles, Canada and Australia. It already hit the US and has created huge public debt for our children to pay off. The chickens are starting to come home to roost and the concept of real estate and all the hype that we have created around it will cause financial instability and bank failure on a massive scale within the next 3 years. So hold on to your hats the shit is about to hit the fan in more than just Ireland. Every time some real estate agent leaves advertising in my mail box asking me to flip with their firm I feel just about them same way as being solicited by a funeral director.

Help from the "Irish" Americians (0)

Anonymous Coward | more than 3 years ago | (#34363744)

They should just ask for help from the same people who helped fund the IRA' murderous bombing campaign, i.e. the yanks. Bet funding terrorism seemed a jolly good "craic" back then, still karma can be a bit of a bitch as the found out on 11/9.

Capitalism is back! (0, Troll)

udippel (562132) | more than 3 years ago | (#34363748)

Welcome to our new capitalist overlords!

Yes, make the underclass work harder and pay more taxes, Yahoo!

(I am aware that the type of mod points given for this comment depends mostly on the nationality of the mods. Let's see ... .)

American chauvinist summarist (1)

dutchwhizzman (817898) | more than 3 years ago | (#34363750)

I don't think that "threatening to take their ball and leave" by the big USA companies has been a very big factor in this Irish government plan. Looking at it that way is very chauvinistic and in my opinion shows a very limited and one-sided view of the world economy. They were facing being cast out of the EU and are in a lot more trouble financially, than just with a few USA companies that already have left Ireland for a good part anyhow.

The Irish government probably figured that any production or tech support job, no matter who owned the company, was making the Irish economy money. The only reason production companies are producing in Ireland and not in China is because of EU tax regulations. Anything not manufactured in the EU is heavily taxed. A lot of manufacturing (Dell is a good example) has already moved out of Ireland to new EU countries like Poland in the last years. You won't believe how many unemployed computer assembly workers there are in Ireland at the moment. Raising taxes may be of some influence to production, but it's very limited since the bulk has moved away to cheaper countries already.

As to the tech/help desk centers they have there. Real estate and wages are comparatively cheap in Ireland, especially compared to the level of schooling. Any other country in the western EU would still be more expensive to go to. You can't outsource everything to India (believe me, they keep trying) so "leaving Ireland if taxes rise" is not a serious threat at all for the bulk of those industries. Try finding people speaking at least 3 European languages (there are over 20) and with enough education to do advanced tech support. You won't find enough of them outside of Europe on one location. Maybe in the future, Africa (with a lot of people speaking French and English) will be providing here, but that will take another 10 years at least. Catering Eastern Europe will be done from the east, where labor is even cheaper and people speak those languages. Catering western Europe will continue from Ireland, even with raised taxes. Maybe, that will move to Eastern Europe in the future, but I doubt taxes will remain low there, they have to adhere to the same standards Ireland is now forced to uphold.
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