Posted 11/29/2005
Ireland: Just as liberals in this country keep pointing to
Canada as a model for health care, some in Europe bow toward Scandinavia
as having the model economies.
Meanwhile, the country the rest of Europe should be modeled after
continues to expand in relative anonymity with policies opposite the
soft socialism of Sweden, Denmark, Norway and Finland.
Twenty years ago, Ireland was an economic disaster, the sick man of
Europe West, in a sense. No more.
"In 1985, Ireland's economical situation was dramatic, and much worse
than Belgium's," according to a report that compares the two nations
because of their "totally opposite economic and fiscal policies. . . .
Excessive budget deficits, weak growth performances and a wealth that
amounted to only 65% of the Belgian level. In addition, Irish
unemployment outfigured the Belgian one by 17% to 10%."
The report, from WorkForAll, a Flemish think tank that claims to have
"no ideological attachments," points out that until 1985, Ireland and
Belgium followed similar Keynesian policies and let public spending
spiral out of control.
By then, Ireland had had it with statist governance. It started to
lighten its heavy tax burden and remove large chunks of unneeded
government spending.
From 1985 to 2001, for example, Ireland slashed the tax on wages to
19.3% from 37%. In Belgium it actually rose to 47.9% from 46%. Today,
Belgium's burden is 2.5 times higher.
"Does it surprise anyone," asks WorkForAll, "that in Belgium nobody
wants to do an hour (of) overtime, and that businesses run away from the
country in an ever-faster rate?"
Thanks to the much lower tax burden, the Irish growth rate is about
double that of Belgium, a remarkable turnaround from 1970, when Irish
prosperity was barely half.
An economically advancing nation is also a job-producing nation. Between
1985 and 2002, only Luxembourg, at 79%, had a better growth rate in
private-sector job creation than Ireland, which grew at a 59% clip.
Finland and Sweden have lost jobs while Denmark and Belgium have managed
increases of 7% and 13%.
Though the pattern is there for anyone to duplicate, Europe's welfare
states won't deviate from destructive policies that require high taxes
to support heavy public spending. Instead of liberating their economies,
they continue to follow the same plodding path, assuring themselves of
many more years of economic malaise.
Filed under the "they'll never learn" category are those who've seen the
Irish "miracle," yet agitate for tax harmonization across the European
Union. They want Ireland to lift its tax rates to everyone else's level,
not for the other countries to drop theirs to Ireland's. Too many in
Europe have a bad sense of direction.
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