IRELAND DIDN'T NEED THE FANCY MATH

The former model nation for the radio gasbags blew money the old fashioned way: GREED.

Housing boom left Ireland littered with vacant homes and unpaid loans
By Shashank Bengali | McClatchy Newspapers
Posted on Wednesday, June 6, 2012

After decades as an economic backwater, its entry into the European Union galvanized one of the most dramatic periods of industrialization of the last century. Thanks to a low corporate tax rate and an educated, English-speaking workforce, foreign investors flocked to the island – 600 American companies set up offices here, including giants like Intel and Google – and helped bankroll the construction boom.

Construction came to account for 14 percent of the economy as banks funneled the majority of their loans to real estate and politicians instituted tax breaks to spur building in every corner of the country.

There were no tricky American-style financial instruments needed here – just cash, or the paper version of it, with Irish and foreign banks falling over themselves to offer 115 percent loans and other easy credit to borrowers. The government raked in billions from capital gains taxes and transaction duties on every house sale.