LIKE MANY IN IRELAND, I read "Erin Go Broke"  with deep interest. When Krugman is asked to cite "the worst-case outlook for the world economy”, he answers, "America could turn Irish." Krugman isn't impressed with how growth will atrophy, Irish GDP will fall more than 10 percent from its peak, taxes will rise dramatically and government spending will throttle back in a manner that will further deepen the slump. Sitting here in Ireland, it looks as though well-paid mandarins in the Ministry of Finance simply did not appreciate the ill effects of the government's light touch in mortgage and lending practises. In response to Krugman's well-publicized perspective comes Mary Coughlan, the former social worker and now Minister for Enterprise, Trade and Employment. "There has been comment that has been neither helpful nor, in my view appropriate, and I would like to move on from that and give the view that we have collectively as a government have, yes, difficult times, but we have the capacity to deal with these issues and we would like to revert back to the international reputation we had and continue to have."
Politicians like Mary Coughlan are costing me more than $650 every month in lost earnings. That's because my wages attract a new set of levies and at the end of the year, I'm down more than EUR 4000 when compared to 2008. I wouldn't mind donating that money to the Irish government but I don't believe the current leadership can take us out of the mess that they created with consumption-fueled growth. And when politicians like Mary Coughlan take the international stage, they do not project an image of being in charge. Without credibility, integrity and transparency, Ireland has no hope of raising the international finance required to sustain current accounts. We're going for broke in Ireland. I'm reading Krugman's Depression Economics  so I'm ready.
1. Paul Krugman -- "Erin Go Broke" in the New York Times, 19 April 2009.
2. Paul Krugman -- The Return of Depression Economics and the Crisis of 2008, ISBN 9780393071016