Tuesday, December 07, 2010

Ireland Beats U.S.

It's hard to admit that a second-rate European economy has a better grip on macroeconomic reality than the U.S.  Today's headlines prove it true.  The U.S. continues on a delusional course of unsustainable fiscal profligacy:

The White House and Republican leaders in Congress reached a sweeping agreement Monday to extend expiring income tax cuts for two years, extend unemployment benefits and cut how much millions of workers pay in Social Security payroll taxes.

Meanwhile, Ireland bites the bullet and sits down to a cold supper of austerity:

One of the toughest budgets in the history of the State, involving substantial tax increases and welfare cuts, is expected to be approved by the Dáil today following the declaration by Independent TD Michael Lowry that he will vote for the measure.

Observers with at least half a brain can see that the reality facing Ireland will eventually face the U.S.  Such observers must be found outside Washington, D.C.