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The Irish Government - teachers with no class control

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Eamon Gilmore and Enda Kenny.
You will remember George Bernard Shaw's famous maxim beloved of students everywhere -- those who can do, those who can't teach.  Here in Ireland a third line is frequently added -- those who can't teach become government ministers.

The Taoiseach (Prime Minister) Enda Kenny, his Minister for Finance Michael Noonan and the Minister for Public Expenditure and Reform Brendan Howlin are all former school teachers.  Two of them (guess!) are former elementary school teachers.  That's worrying enough.

Possibly even more worrying is the CV of the Tanaiste (Deputy Prime Minister) Eamon Gilmore who did psychology in college, became a student leader and then got a job as a trade union organizer.

Having had some experience of the airheads who gravitated to psychology when I was in college, I'm inclined to think that anyone who went that route is probably even less clued into the world of high finance than teachers.   You can decide for yourself.

But these four buckos (two Fine Gael and two Labor) all have one thing in common.  None of them has ever worked a day in his life in the real economy, in a business that had to make a profit to survive.  

Something else they have in common is that together they make up the core of the government sub-committee in charge of getting us through the financial crisis, getting us out of the IMF bailout and getting back our economic sovereignty.  

Other ministers are called in to join this supreme committee as needed, but these four geniuses with their non-existent experience of the real economy are the main men in charge of saving Ireland.   Is it any wonder people here have such little confidence in our future?

What we have learned over the past year from this Fine Gael-Labor government is that they are very good at being sanctimonious about the mess that Fianna Fail made of our economy.  They get all high and mighty and holier than thou about it.  And in the first few months you could not blame them.

Fianna Fail destroyed the country and left the new government in an impossible situation, with the economy carrying an enormous financial burden that may take decades to remove.
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But despite the lousy hand they have been dealt, there comes a time when the new  government has to start taking resolute action.  Now, after more than a year in power, the new government has passed that point.

What we are getting, however, is confusion and weakness.   It turns out that the new government is not so good at actually taking the hard decisions that are necessary to put things right again.

The big challenge, of course, is shifting the portion of the debt burden that is directly attributable to the banking collapse away from the ordinary Irish taxpayer who had little or nothing to do with it.

For the first time a week ago a very senior official of the European Central Bank admitted (perhaps inadvertently) that the reason Ireland has been prevented from burning unguaranteed senior bondholders was not just to protect the reputation of Irish banks, but also the stability of the European banking system.

The ECB is well aware that the European banks that lent money into the Irish boom to get a share of the action are partly to blame for what happened here.  Yet instead of sharing in the cost of the property crash, they are getting all their money back.  And the Irish taxpayer is being forced to carry the enormous bill, with the bailout provided so we can make the payments.

The new government, in spite of all the huffing and puffing, has failed to do anything about this gross injustice.  They have managed to get a portion of the debt pushed down the road, but there is no debt forgiveness or burden sharing involved.

On the biggest issue we face, they have failed.   They are still trying to be the best boys in the European class in the hope that the head teacher in Europe will reward us for good behavior.
Sadly, the real world does not work like that.

Because of the billions being sucked out of the economy each year, taking away from much needed spending on services like health, education and welfare, the debt burden is our number one issue, dwarfing everything else.

But the government has caved in and swallowed the ECB line -- everything must be paid back.
The banking debt is only one half of the problem, however.  The other half of the problem, for which we are entirely to blame ourselves, is the overspending by the state.

We need to get our spending back in line with our revenue.  That's far from easy, since revenue has contracted so much since our property boom turned into bust.  But there is no alternative.

Since they are the ones funding our budget deficit, the IMF, the ECB and the EU (the troika) not only have laid down the schedule for us to cut spending and raise taxes but have suggested ways we should go about it.

Some of this is pretty obvious stuff.  Ireland is one of the few countries in the world which don't have a property tax.  We got rid of local property taxes (called rates) back in the 1970s, and since then local services have been funded from central government, a bill that is now enormous and which the government can't afford.

So the troika told us to introduce a property tax.  If you've read an Irish paper in recent weeks you will know what a mess the government made trying to do this.
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To get the ball rolling, a flat "household charge" was introduced at a modest 100 for all houses.  In future, the charge (or tax) will be progressive so that those living in big houses will pay more.  But the government could not wait until all houses were valued, because the IMF had said to start immediately.

This caused huge resentment, and even though the deadline for payment has passed half the country has still to pay, with a sizable section swearing they will never pay.

This chaos was made worse because the government looked for payment via the internet and failed to make arrangements for all those people who like to pay in cash at the post office (like they pay their TV or dog license). The explanatory publicity campaign about the new tax also was confusing and unconvincing.

This debacle followed another one a few weeks previously that had thousands of people in rural Ireland up in arms.  This happened when the government tried to implement an EU instruction that all septic tanks (unconnected sewage systems) must be inspected to protect ground water quality.

The cost was to be 50.  There was such a revolt on this that the government subsequently dropped the charge to 5.

This week the row is about water charging.  Unlike in most other countries where local councils charge for water, the provision of water here has always been free.

This is counter to EU policy and our EU masters have told us to introduce a charge.  This means that every home in the country has to be fitted with a water meter.

At first we were told that this was going to cost a few hundred euro, to include fitting.  Again there was uproar.

Now we are told the fitting will be free and the payment for the meter may be spread out over a few years. But no one knows.

None of this sounds like a government in control, does it?  If they can't get to grips with the relatively small items like these, how are they ever going to tackle the big issues like the overall debt burden?

The bottom line on all this is that people here, like everywhere else, don't like paying tax.  And we've got bad habits.  To buy votes, politicians here failed to implement property taxes and water charges and now we are out of line with everywhere else.

I don't have to tell you guys in the U.S. about such taxes.  But we don't have to look that far to see what others are doing.  In Britain, for example, local taxes pay for local services and an average size house pays over £200 or £300 a year for water.

The trouble is that so many people here are struggling to pay their bills already that they say they have nothing left to pay these new charges.   A new survey has shown that more than half a million adults here have no money left at the end of the month after paying their essential bills. That's a tough place to be in.

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