Jill Kerby in The Sunday Times (Irish edition) speaks a lot of financial sense. This is an extract from a piece yesterday about the Irish economy. She nails it – we are a nation the size of a small US city saddled with unimaginable levels of bad private debt that we will never pay off. Her solution is to default and restructure the debt – and I suspect this is what will happen eventually, whether planned or not.
Yes there are big complex systems that have failed globally – but at root, Ireland’s particularly catastrophic collapse has been caused by unchecked greed, ambition, political self-interest and reckless pride.
Money and power lie at the heart of our mess – or should I say mis-use of money and power.As Jill Kerby hopes, such as been the damage that maybe lessons will be learnt and maybe some form of renewed civic society may emerge. I think this is a time for all Christians to get active in that debate and try to make a constructive contribution.
Health insurance is just one of many big expenses for households, along with the mortgage or rent, groceries, utilities, educating your children, putting away some money for a pension.
Unfortunately, you may also need to factor in thousands of euros in higher taxes, starting this year and lasting for at least a generation. This is your personal contribution to the monumental private debt bill the outgoing government so kindly ‘socialised’ to save the insolvent Irish banks.
Depending on who you ask, the total debt bill of the Irish nation ranges from €160 billion to the region of €400 billion.
Let’s just agree that it’s too big for 4.2 million people to ever pay, especially since only 1.8 million are actually working.
None of them were asked if we wanted to pay this debt or if we could. As far as this government has been concerned, the debt and austerity plan are ‘manageable’.
Of course they aren’t. We have run out of other people’s money and the austerity plan is just another shovel that will dig the hole deeper.
Hopefully, the new government we elect in a few months will recognise this and not just call a halt to the European Union/International Monetary Fund ‘recovery’ plan, but make sure Ireland is first in the queue to declare it unworkable. Let’s get ahead of all the other countries with serious bank problems, non-payable national debt and unsustainable public spending, before they too are forced to face reality and the eurozone unravels.
Not being able to pay your debts, especially bank debts that were not entirely of your own making, is not an excuse for a country, or an individual, to borrow more.
It should offer an opportunity to seek a controlled bankruptcy that will certainly cause great hardship, but only temporarily. It offers a chance to rebuild a broken state and broken lives.
Hopefully this is the year in which we will all learn about money – not just how it is manipulated by politicians, bankers and other vested interests – but how, living within our means, it can be legitimately earned, saved and invested for the prosperity of the entire nation.
Let 2011 be the year the government fears the people.