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dc.contributor.authorWray, L. Randallen_US
dc.date.accessioned2012-02-16en_US
dc.date.accessioned2012-04-12T14:21:05Z-
dc.date.available2012-04-12T14:21:05Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/57017-
dc.description.abstractEuroland is in a crisis that is slowly but surely spreading from one periphery country to another; it will eventually reach the center. The blame is mostly heaped upon supposedly profligate consumption by Mediterraneans. But that surely cannot apply to Ireland and Iceland. In both cases, these nations adopted the neoliberal attitude toward banks that was pushed by policymakers in Europe and America, with disastrous results. The banks blew up in a speculative fever and then expected their governments to absorb all the losses. The situation was similar in the United States, but in our case the debts were in dollars and our sovereign currency issuer simply spent, lent, and guaranteed 29 trillion dollars’ worth of bad bank decisions. Even in our case it was a huge mistake - but it was 'affordable'. Ireland and Iceland were not so lucky, as their bank debts were in 'foreign' currencies. By this I mean that even though Irish bank debt was in euros, the Government of Ireland had given up ist own currency in favor of what is essentially a foreign currency - the euro, which is issued by the European Central Bank (ECB). Every euro issued in Ireland is ultimately convertible, one to one, to an ECB euro. There is neither the possibility of depreciating the Irish euro nor the possibility of creating ECB euros as necessary to meet demands for clearing. Ireland is in a situation similar to that of Argentina a decade ago, when it adopted a currency board based on the US dollar. And yet the authorities demand more austerity, to further reduce growth rates. As both Ireland and Greece have found out, austerity does not mean reduced budget deficits, because tax revenues fall faster than spending can be cut. Indeed, as I write this, Athens has exploded in riots. Is there an alternative path? In this piece I argue that there is. First, I quickly summarize the financial foibles of Iceland and Ireland. I will then - also quickly - summarize the case for debt relief or default. Then I will present a program of direct job creation that could put Ireland on the path to recovery. Understanding the financial problems and solutions puts the jobs program proposal in the proper perspective: a full implementation of a job guarantee cannot occur within the current financial arrangements. Still, something can be done.en_US
dc.language.isoengen_US
dc.publisherLevy Economics Inst. Annandale-on-Hudson, NYen_US
dc.relation.ispartofseriesWorking paper, Levy Economics Institute 707en_US
dc.subject.jelE12en_US
dc.subject.jelE32en_US
dc.subject.jelE34en_US
dc.subject.jelE62en_US
dc.subject.jelE65en_US
dc.subject.jelG01en_US
dc.subject.jelG15en_US
dc.subject.jelH62en_US
dc.subject.jelH63en_US
dc.subject.ddc330en_US
dc.subject.keywordEuro crisisen_US
dc.subject.keywordfinancial crisis in Irelanden_US
dc.subject.keywordemployer of last resorten_US
dc.subject.keywordjob guaranteeen_US
dc.subject.keywordbank bailouten_US
dc.subject.keywordIrish debt crisisen_US
dc.subject.keywordgovernment debt crisisen_US
dc.subject.keywordMinskyen_US
dc.titleThe euro crisis and the job guarantee: A proposal for Irelanden_US
dc.typeWorking Paperen_US
dc.identifier.ppn685535274en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
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