Ireland plans to cut deficit, a peak into America's future.

Ireland released a 140 page document outlining their plan for bringing their financial house in order. I do not claim to be an expert on Irish matters what so ever, but I do fancy their most unparliamentary procedures. 

So why mention or write about it?  Because!  Ireland was one of the first countries in Europe to go down the path of austerity and as I wrote about last time, it did not work.  Of course the failures of Irish austerity have much more to do with the global increase in debt than anything else, but Ireland is also suffering from a very similar malaise affecting all civilized nations:  a giant federal government and the painfully flawed concept known as the welfare state.  Observe the highlights of the Irish plan, courtesy of RTE:



* Public expenditure down €10bn, tax up €5bn
* Irish bank shares see big falls
* Corporation tax will remain at 12.5% (maintain the visible tax, raise the less obvious ones)
* Social Welfare to be cut by €2.8bn by 2014 (Social welfare costing too much?)
* VAT will rise to 23% by 2014 (This is on top of other taxes, mind you there are people in Washington DC that want to introduce a VAT!)
* Health spending to fall by €1.4bn over term of the plan (Federal health spending costing too much?)
* Minimum wage to fall to €7.65 per hour (Minimum wage not sustainable?)
* Property tax in place by 2012
* Domestic water charges to be in place by 2014 (extra fees instead of taxes)
* Plan includes 'full implementation of the Croke Park deal (a freeze on union pay and benefits, unions out of control?)
* New entrants to public service will face a 10% pay cut (bloated Federal salaries?)
* Public service pensions to be cut by an average of 4% (bloated Federal benefits?)

That is just the tip of the iceberg, but I encourage you to look at some of the feedback coming from the large Irish institutions and opposition parties.  Significant riots are imminent because so many people will be hurt and it is heartbreaking to witness this.  However Ireland is just the start because most people, regardless of political affiliations simply loooooove their Government services.  In a recent WSJ survey we learn that a vast majority of Americans refuse cuts in Medicare, Medicaid, Social Security and Defense spending, but at the same time refuse tax increases.   Hello?  McFly?  Are the people surveyed employed at Ben's printing press station?  It's baffling that a majority of the biggest superpower in the world has the combined IQ of a diseased chipmunk.  Talk about having your cake and eating it too.

Ireland is doing today what we will be doing in the future.  When government is FORCED to make the most painful cuts just to stem the deficit only because we absolutely refuse as a nation to sit down and make sacrifices.  AS A NATION.  This no longer has anything to do with politicians, this now falls entirely on the populace.  If citizens refuse to make sacrifices and realize that the welfare state that has been growing for about 80 years fueled by the destruction of currency is not sustainable, then cuts will be made for you.  They will also hurt you the most while the ruling elite pays you lip service.

Let me be clear.  Cuts will be made for you and they will be terrible.  Look again at what Ireland is cutting and think about how similar it is to America.  Then look at what will happen in Ireland over the next few weeks and months - it is coming here.  Americans cannot continue to demand their "services" and politicians cannot continue to be dominated by archaic economic principles of government spending as a panacea.   Only a collective awakening by 2012 can stop this, but I am not sure we have that much time.

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