Friday graph: why Ireland is broke

This is a graph courtesy of the Institute of Public Affairs in Melbourne, an impressive Australian thinktank.

It comes from the Irish government’s own 140 page ‘National Recovery Plan‘ published last week.

It is amazing reading.

  • From 2000 to 2009 average public sector salaries increased 59%
  • In 2004, 34% of income earners were exempt from tax. In 2010, 45% were exempt
  • In 2007 property taxes generated 6.7 billion euros.  In 2010 that figure will be 1.6 billion
  • In 2009 interest on government debt was 8% of tax revenues.  In 2014 it will be 20%.

Naysayers try to tell you that the Celtic Tiger was a myth and that free-market policies brought the Irish economy down.

The truth is exactly the opposite.  Liberalisation caused the Irish economy to surge until a return to big government crushed it.  Membership of the eurozone, poor banking regulation and the government guarantee of bank depositors and creditors were also major factors.

I wrote this article on Ireland recently (Otago Daily Times, 5 November 2010).

Watch British MEP Dan Hannan talking about it in the European Parliament below:

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One thought on “Friday graph: why Ireland is broke

  1. Ireland like America. NZ. Spain. and many many others have a property bubble problem.

    Japan is still trying to get over it’s bubble after many years.

    They can all be laid fairly and squarely at the Banking and Finance doorstep.

    Q.E. Will not solve the problem..

    More debt being thrown upon debt..

    Here in NZ one can purchase on No deposit. No interest for 30 months. Nothing to pay for 15 months.

    Madness..

    Which country is next for the bail out ??
    Hungary ?. Czechoslovakia ?.

    Merkle should walk away from the Euro..

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