Ireland is an example of when the government stops stimulating the economy

[liberal N proud]

Ireland struggles with high cost of austerity
'There is no easy way to cut deficits,' PM says following economic collapse

DUBLIN — As Europe’s major economies focus on belt-tightening, they are following the path of Ireland. But the once thriving nation is struggling, with no sign of a rapid turnaround in sight.

Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.

“When our public finance situation blew wide open, the dominant consideration was ensuring that there was international investor confidence in Ireland so we could continue to borrow,” said Alan Barrett, chief economist at the Economic and Social Research Institute of Ireland. “A lot of the argument was, ‘Let’s get this over with quickly.’ ”

Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.

The last and most painful paragraphs are at the link...
http://www.msnbc.msn.com/id/37991437/ns/world_news-the_new_york_times/

[Hannah Bell]

1. surely you're not talking about ireland, the neo-lib "tiger" economy?

the economy that was supposed to prove the benefits of low taxation?

[xchrom]

2. Recommend

[rucky]

3. Are you suggesting that jobs could stimulate the economy?

that's radical and socialist.

[Triana]

4. Once again I'm NOT impressed with what Harvard turns out. . .

"“Europe is in a tough bind,” said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund and now a Harvard professor. “If you want to escape default, the Irish path is the only way to go. But the Ireland experience points to the profound challenges that the current strategy implies.”

I know at least one reason why. These frigging MORONS teach 'biness' is taking what clearly DOES NOT work and doing it again - EVERYWHERE!

Pfft.

[Statistical]

5. There is a time & place to cut deficit but it certainly isn't now.

Due to amount of liquidity pumped into system if the economy ever does start up we could see significant inflation and cutting budget their would be a 1-2 punch (one lowers national debt, two helps curb inflation).

Cutting deficit today is utterly stupid and will accomplish nothing. It would be like dousing the match you are trying to light the fireplace with because "it could" burn down the house, then freezing to death.