300,000 new dwellings now stand empty in the Irish Republic, a number whose equivalent in the United States would be approximately 21 million....
During the boom, taxi drivers and shop assistants would tell you about the third or fourth house they had bought—on borrowed money, of course—and of their apartments in Europe, from Malaga to Budapest to the Black Sea Coast of Bulgaria. It was not so much a boom as a gold rush, or a modern reenactment of the Tulipomania....
All this would not have been possible were it not for the insouciance of foreign banks....
During the boom, the government—under the direction of Ireland’s largest political party, Fianna Fáil, in power for most of the last 80 years and famous for its patronage network—increased public-sector employment by 25 percent and also the rate of remuneration. The average public-service wage rose from $39,000 a year in 1998 to $64,000 in 2008, with pensions following suit, in return for a pledge not to go on strike....
When the music stopped and the Madoff-style pyramid collapsed, the government was left with obligations impossible to meet. Public service salaries have already been cut by as much as a quarter, with more to come....
Default is not impossible, however, and some even advocate it.
