Irish (the model) Economy Suffers Dramatic Downturn

Sky News

Ireland's economy shrank 1.9% in the third quarter - almost four times more than was expected.

Figures from the Irish Central Statistics Office (CSO) show gross domestic product (GDP) contracted in the three months to the end of September, after growing in the first two quarters of 2011.

Ireland had been the second-best performing economy in the eurozone in the period from April to June, but now falls to second-worst - only above Greece.

It has often been held up by European leaders as a model for recovery following a series of austerity budgets.

Now, Ireland's Department of Finance was warning about the significant impact the eurozone crisis is having.

So what is this data telling us? Well it shows the Eurozone is totally screwed. Sorry, um, well it shows that austerity measures don't work like it was theorized to. The fact that Ireland was praised for their winning austerity formula and served as a model to other EZ economies is, now, laughable. You punish enough people, and you simply drive down economic growth, rapidly! Even poor people spend! They might even spend on your service or products but if you take away their discretionary spending income, then of course they cannot possibly spend on anything bar life essentials. Similarly with the middle class - punitive taxation, surging costs of essential life services such as energy and reduced working conditions undermines the spending capacity of this vital class to the economy.

Sure it is the country getting into debt in the first place, though too many social programs and whatever else. But now that that debt is over and above a certain GDP, and the only seeming solution is to drive austerity and punish the people who contribute most to GDP, is clearly not gonna work!! Btw the wealthy are actually getting more wealthy, at least here in Australia (can dig the article up if anyone genuinely wants to see the evidence). So sparing the rich from contributing in the hope that they will altruistically provide jobs is fanciful thinking.

Yep Ireland is the model economy! The model economy to the rest of the world that austerity on the middle class and poor ain't gonna accomplish squat!!

such is the way of things, they'll just claim that Ireland is an outlier or that the reasons are unique to Ireland or even bad luck. What Europe won't admit is that raising taxes and cutting spending at the same time is about the worst combination.

To be honest though I think we are past the point of no return, the euro has failed and most/all the european countries need to declare bankruptcy before they can begin to rebuild from the ashes.

The politicians won't admit that though because if the did they'd probably all be lynch mobbed