Ireland, recently considered the Gaelic Tiger because of its unparalleled economic growth, is now one of the world's most floundering economies. As recently as 2007, the Emerald Isle was measured to be the 12th wealthiest nation per capita, positioned ahead of the U.S.. Now it's credit rating has been reduced, tax revenues are expected to fall by 20% and the deficit is 11% of GDP (three times what the EU allows). They are attempting to spend their way out of this recession but the loss in credit rating will make it more expensive to borrow adding to the cost of repayment.
As the US economy continues to slump, we're bringing down everyone else and this article is proof once again that we need to fix the economic problems soon before the whole world is brought down with us and we'll be too far down to get back up and we'll be S.O.L.
ReplyDeleteThe problem that Ireland faces in the present is the lack of planning that was supposed to have taken place in the past. No one ever thought that the economy would reach this downturn and now more than ever people need to spend money. But to do this they need to borrow money which is in short supply, producing a daunting and exorbitant deficit. The safety net was supposed to be government bonds, but to keep these bonds stable and secure the cost is greater. The lowered tax rate that people in Ireland experienced in their prosperous "boom years" has now hindered their ability to recover because the government has no money to rescue the people from this crisis.
ReplyDeleteSarah Prentice
I think that a year ago when Ireland was the 12th richest country they weren't expecting this downturn at all. Once you have so much growth it has to decay eventually and I don't think they were expecting any of what is going on to be as bad as it is. To create a stimulus they must borrow money bu they cant because the cost is high.
ReplyDeleteLauren Osterfeld