In the 1980s and 1990s, the Irish government adopted a series of pro-growth policies — slashing corporate tax rates, for example — that allowed the productive economy to rapidly expand. Ireland went through a period of fantastic growth that led to its description as a “Celtic Tiger.” In the early 1990s, however, the government embarked on a massive spending spree, fueled by the private-sector wealth creation, that eventually saw public expenditures increase by more than 600 percent.
Until about 2000, with the productive economy growing so fast, government spending as a percent of GDP was actually on a moderate decline, despite the enormous growth of the state. Then came the global economic crisis. Spending shot through the roof, and as a percent of GDP, government expenditures also soared. The central government made matters worse when it agreed to bailout the big banks, putting taxpayers on the hook for monstrous debts.
Irish government spending still makes up around half of GDP, but politicians have recently started to cut spending to deal with economic realities. The nation has also resisted calls for new and higher taxes, so it may yet emerge from the crisis. But it’s clear that statist policies — bank bailouts, skyrocketing spending, and interest-rate distortions — played a key role in Ireland’s woes.The situation here is dicey; we have Obamunism (albeit it's also FDR-ism, LBJ-ism, Carter-ism, and BushII-ism--all initiated and supported by Congress-ism).
It IS the spending.