By CHARLES FORELLE and DAVID ENRICH
DUBLIN—With doubts swirling about the solvency of the Irish state in early September, Finance Minister Brian Lenihan summoned a dozen senior government and bank officials to a conference room nicknamed the “torture chamber,” a nod to its history as a venue for painful meetings.
For two years, Ireland had poured money on a raging banking crisis, to no avail. Each estimate of the rising price of rescuing Ireland’s banks turned out too low.
By STEVE MOORE
During a recent press conference, President Obama blamed George W. Bush for the nation’s fiscal condition. “When I walked in,” he declared, “wrapped in a nice bow was a $1.3 trillion deficit sitting right there on my doorstep.” Earlier this year he asserted that “we came in with $8 trillion worth of debt over the next decade.”
Neither statement is correct, according to the Congressional Budget Office (CBO). True enough, the outgoing Bush administration bequeathed big deficits to Mr. Obama. The expected 2009 deficit was $1.19 trillion, not $1.3 trillion, however—and the actual deficit for 2009 came in at $1.41 trillion, meaning that the new president added some $220 billion to the total.
Far more significant, however, was the president’s misstatement that Mr. Bush and the Republicans left the country with $8 trillion of debt over the next 10 years.
By Mark Gilbert
Like a drunk at a party, the bond market is starting to bump into tables, telling off-color jokes, talking too loudly and spilling drinks. The smart guests will steer clear before he starts screaming at his shoes and wanders off to pray to the porcelain.
Did you think a 950 billion-euro ($1.2 trillion) emergency backstop cobbled together by the European Union and the International Monetary Fund in May was the answer to Europe’s debt crisis? Were you expecting central banks to turn off the money taps as normal funding service resumed in the banking industry? Had you hoped the heavy hand of government would only briefly slide its interfering digits into the folds of finance?
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