By the time you read this Charlie McCreevy will have done his election winning give away budget speech.
Christmas is only three weeks away.
You’re in your dream home, 00 car in the drive; she’s contented (well as contented, as her biology will allow her to be).
Enjoy it, enjoy it now my friend.
Live in this moment because it is the only moment we have-any of us.
For I tell you this for free, the good times are soon to be over.
Whatever you think of your current problems-financially speaking-you will look back in two years time and say, “ those were the days”.
Living in Donegal now I feel that I’ve got the benefit of hindsight because I’ve came from this county’s future.
England in the 1980s was a carbon copy of this place.
Booming economy.
Huge budget surplus in the coffers of the state, idiot in charge of the state’s finances splashes a give away budget into an already over-heating economy careering out of control on huge, unsustainable borrowings.
If you know your British economic history then you will know what that idiot-Nigel Lawson-short sightedly engineered for Thatcher in 1988.
It is difficult to imagine that she would have been deposed in 1990 if he hadn’t have messed up in 1988.
So I suppose we should be grateful to him for that!
Lawson through money into an economy that had been growing rapidly and couldn’t handle it.
The property prices went mental.
In the blinking of a bank manager’s eye it all went –well Lawson shaped!
People who had borrowed massive amounts in the belief that the price of property would continue to spiral upwards were caught in the sticky, cloying net of Negative Equity.
They lost their house and were left with a debt around their necks-some are still paying it off.
People topped themselves, marriages collapsed.
Spiting Image did a skit at the time –which was criticised-a sing along called “Kill An Estate Agent Today”.
It was hugely popular with Mrs & Mrs Average Middle Englander.
It couldn’t happen here in Ireland?
Really?
We’re about as immune from the cold winds of economic downturn as we were safe from the weather that flooded the England a while back.
Make no mistake within 2 years the boom will be over.
Things are looking ominous. Credit growth is exploding. Inflation is mounting. The infrastructure is creaking. Strikes are spreading. The stock market is trembling. Tax cuts are pending. And the bubble is about to burst. Make no mistake: within 2 years, the party will be over.
For the past six years, Ireland has been enjoying economic growth previously only associated with the “Tiger” economies of the Pacific rim-hence the Celtic Tiger.
The country benefited from our positions as an educated, English-speaking gateway to Europe for US companies.
But like the guy who has been poor all of his days and comes into money we can’t handle it.
We’re gonna blow it-large.
The expansion of credit -- up 34 per cent in the year to October-is a time bomb in this economy-and in many homes.
Credit has grown in the Irish economy at four times the rate of economic growth in the last five years.
The compound credit growth rate is alarming -- and made worse by high concentrations in parts of the corporate and personal sectors.
The tax cuts in last Tuesday's budget are certain to send an already overheated economy to boiling point.
The additional money pumped in won't go into increased output, because there are neither the people nor the infrastructure to increase it. Instead, the tax cuts will fuel higher prices in the domestic services sector and higher rents.
That will feed into more industrial disruption and unrest, resulting in lower productivity and loss of competitiveness. Many taxpayers, struggling with high mortgages and the rising cost of living, will extend their increased take-home pay with more consumer credit, adding fuel to the brightly burning bonfire.
Then there is a huge iceberg hoving into view just of Tory Island that will sink the Goodshipireland.com
The US.
|Our economic good health is dependent upon people who believe in alien abduction and can’t run an election even when they’ve had four feckin years to prepare for it.
Throughout Bill Clinton’s stay in the Oral Office America has been experience the goldilocks economy-not Too Hot Not Too Cold.
The good times have been rolling.
Much of the inward investment that has made our Tiger purr has came from the States-Dell, Apple, the list is as long as Bill’s nose after a grilling about Monica.
However, just like Bill when Hilary gets him by the short hairs the good times are certainly over.
The mountain of debt piled up there over the past few years is now leading to record levels of default and bankruptcy. This year alone, at least 150 US public companies are likely to file for Chapter 11 bankruptcy, involving nearly $200 billion in debt.
Ireland, as the biggest base for US investment in Europe, will be among the first to suffer.
The poor Oul Euro will recover, making Irish exports less competitive in the non-Euro area.
Many Irish manufacturers will be unable to compete in shrinking overseas markets. Most Irish companies will be forced into cutting jobs. Others will be forced into liquidation.
Yeah the party very soon, very, very soon will be over.
I hope that it was good to you while it lasted because after boom, comes bust.
Now, what is it costing you a month to keep her happy?
Phil Mac Giolla Bhain
