Are we in a Depression?

johnnyc

Just wondering peoples opinions are we in a depression...have an interesting link here where gordon brown has mention the word(out of mistake or not) What do u think
http://edition.cnn.com/2009/BUSINESS/02/04/brown.world.depression/index.html

bk

There is no official definition for a depression, but there are two general rules of thumb, one is a decline in real GDP exceeding 10%, and the other is a recession lasting 3 or more years.

We aren't there yet, the US could hit the second one if it continues into next year.

silverharp

It has all the markers of how a depression would start , from an historical perspective I believe that up until about 1939 or so The Great Depression referred to the 1870's period , until there was a realisation that they had just been through one.

alentejo

I know things are bad...very bad times..

I can get the feeling however that we are talking our way in to more economic chaos. There is a utter and complete lack of any confidence at the moment which is making a bad problem worse.

If we say we are entering into a depression, we will end up in a depression.

Highsider

Yeah that's right. We'll talk ourselves into a depression, just like a recession :rolleyes:

silverharp

alentejo wrote: »

I know things are bad...very bad times..

I can get the feeling however that we are talking our way in to more economic chaos. There is a utter and complete lack of any confidence at the moment which is making a bad problem worse.

If we say we are entering into a depression, we will end up in a depression.

well if you can talk your way into a depression you should be able to talk your way out of your mortgage:D

Saabdub

Definition of a depression:

When your neighbour loses his job it's a downturn
When you lose your job it's a recession
When an economist loses his job it's a depression:D

Saabdub

Forums

silverharp wrote: »

It has all the markers of how a depression would start , from an historical perspective I believe that up until about 1939 or so The Great Depression referred to the 1870's period , until there was a realisation that they had just been through one.

I think we are in a depression I have no qualifications as such but am old enough to know this kinda thing has never happened before in my lifetime and no world leader knows how to get us out. I fear for unrest in the world and it was in such circumstance that the nazis came to power. I hoped Obama would bring some clarity to the sitution but alas he and his crew are not making the right moves. It is going to be a tough few years but as they say as long as we have our health

leincar

Yes sadly I believe we are in a depression and people in influence in this country either in politics or business are not facing up to reality.

The only historical incident I can give is the following. While watching RTE'S Reeling in the Years for 1983 the caption underneath the story of the closing of Dunlop said that for the whole of the year an extra 32,000 people were added to the unemployment line. This week it was announced that 36,500 were added in January. If that is not a wake up call I don't know what is.

seamus

leincar wrote: »

The only historical incident I can give is the following. While watching RTE'S Reeling in the Years for 1983 the caption underneath the story of the closing of Dunlop said that for the whole of the year an extra 32,000 people were added to the unemployment line. This week it was announced that 36,500 were added in January. If that is not a wake up call I don't know what is.

Not that I'm disagreeing with your figures, but you need to look at a number of things, including population growth and the number of people in employment.

I couldn't find a figure for the number of people in employment in 1983, so it's hard to give actual figures, but I imagine there were less in employment in 1983 than there were in 2008.

That is, if 1,000,000 were employed in 1983, then a drop of 32,000 represents 3.2% of the workforce. If 2,000,000 were in employment in 2008 (which there were), then a drop of 36,500 represents 1.825% of the workforce.

Definitely not to be glib about, but it presents the actual situation correctly.

Does anyone know where you'd get figures for the number of people employed in 1983?

Something else that's not considered by the media in particular is the net loss of jobs. If you listen carefully, they'll usually say that X amounts of "jobs were lost" in a month. This doesn't represent the number of people added to the dole queue because you have to account for the number of jobs which were created in that month.

leincar

seamus wrote: »

Not that I'm disagreeing with your figures, but you need to look at a number of things, including population growth and the number of people in employment.

I couldn't find a figure for the number of people in employment in 1983, so it's hard to give actual figures, but I imagine there were less in employment in 1983 than there were in 2008.

That is, if 1,000,000 were employed in 1983, then a drop of 32,000 represents 3.2% of the workforce. If 2,000,000 were in employment in 2008 (which there were), then a drop of 36,500 represents 1.825% of the workforce.

Definitely not to be glib about, but it presents the actual situation correctly.

Does anyone know where you'd get figures for the number of people employed in 1983?

Something else that's not considered by the media in particular is the net loss of jobs. If you listen carefully, they'll usually say that X amounts of "jobs were lost" in a month. This doesn't represent the number of people added to the dole queue because you have to account for the number of jobs which were created in that month.

Fair point but 36,500 as you say is 1.825% of the workforce and that is in one month. For 1983 it would have been 3.2% for the 12 month period.

Time Magazine

seamus wrote: »

Does anyone know where you'd get figures for the number of people employed in 1983?

Statcentral.ie is probably your best bet.

road_2_damascus

johnnyc wrote: »

Just wondering peoples opinions are we in a depression...have an interesting link here where gordon brown has mention the word(out of mistake or not) What do u think
http://edition.cnn.com/2009/BUSINESS/02/04/brown.world.depression/index.html

This is not a recession, this is unprecedented. America is bankrupt, and it is due to get much worse if the Republicans refuse to pass the stimulus package soon...it will cause a dollar crash which wont be pretty, what that will mean is 1 dollar now, will be worth about 3cents . This could happen by April and will bring with it, all the conspiracy theories of FEMA camps and Marshall Law

Time Magazine

The Economist wrote: »

Statcentral.ie is probably your best bet.

Update: just checked and the ILO state there were 1.124m working in 1983.

road_2_damascus wrote: »

This is not a recession, this is unprecedented.

No, it's not.

America is bankrupt

No, it's not.

and it is due to get much worse if the Republicans refuse to pass the stimulus package soon...

The Republicans do not have veto power, and the stimulus is more likely to cause bankruptcy than no stimulus.

it will cause a dollar crash which wont be pretty, what that will mean is 1 dollar now, will be worth about 3cents.

Have you any evidence of this? What does a fiscal stimulus have to do with monetary policy?

This could happen by April and will bring with it, all the conspiracy theories of FEMA camps and Marshall Law

This is the Economics forum. Please keep posts like this one on the Conspiracy Theories forum.

HashSlinging

My dad said yesterday, (70 yrs old) that there is going to be a civil war in this country soon the way things are..

Got me thinking.. if he thinks things are bad, they're really fnn bad..

seamus

HashSlinging wrote: »

My dad said yesterday, (70 yrs old) that there is going to be a civil war in this country soon the way things are..

We're not very good at war in this country. A civil war would require a group with a strong core of political followers and a very general support from the rest of the country. There's nobody at the moment who even looks close to that point:
FF have between 25 and 40% of the popular support
FG have a similar chunk of support, but their followers wouldn't be very militant or determined.
Labour have a smaller chunk of support, but again have lazy/middle-class supporters.
SF have militant supporters, but are specifically despised by 90-95% of the country.

In short, in order for a civil war, you need a party who has answers (or who seems to have answers) but who can't get into power.

More likely is another general election where FF will be annihilated and whoever ends up in power will get about 100 days of grace, and by which point there'll be light at the end of the recession.

I am struggling a little with the 36,500 figure. Seasonally adjusted it's actually 33,000. But that represents a single month, which you would expect to be a bad month in job terms - Companies have started/are ending their financial year and will fire in January & February in order to meet their forecasts and plans. It's tough to compare a whole year's job losses against a single month's because theoretically we could reclaim those 33,000 jobs piece by piece in the last 8 months of 2009.

I do expect that the February figure might be similarly high. We're reaching a point now where companies are cutting staff simply because they can, not because they necessarily need to do it to survive. Ericsson yesterday, for example. Companies would be reluctant to do this in December or January because of the possible negative sentiment of firing someone just before/after Christmas, but February seems like it's fine and will reduce the wage bill just in time for 1st/2nd Quarter forecasting.

You'll notice how much easier it is now for companies to do this. Waterford Crystal has been in trouble for a good few years at this point, and they had people's scorn for talking about layoffs and closing down. But now that everyone else is doing it, suddenly the sentiment has shifted to, "Another one bites the dust, ah well. God bless the workers".

HashSlinging

He was specifically worried about Sinn Fein getting into government. Said if they did the country would be ****ed back to the 1800's.

Gas man my dad.

nesf

leincar wrote: »

Fair point but 36,500 as you say is 1.825% of the workforce and that is in one month. For 1983 it would have been 3.2% for the 12 month period.

Unemployment was 14% in 1983 though, which makes such job losses a lot bigger. 30,000 people becoming unemployed when unemployment is low is quite different to 30,000 people becoming unemployed when unemployment is already very high.


I agree about it being a sign of them times but we're seeing a shift away from an abnormally low unemployment figure. If we're still seeing 30K losses in a month when we're well into double digit unemployment we're well screwed tbh.

jank

Yes, we are ****ed. I havent seen any evidence to show me that there is light at the end of the tunnel. Id say unemployment will go over 20% sometime next year.

book smarts

The Economist wrote: »

No, it's not.

Elaborate please, with sources. If anyone else said things like this without support, you'd probably ban them. We can't read your mind.

No, it's not..

Elaborate please, with sources.

The Republicans do not have veto power, and the stimulus is more likely to cause bankruptcy than no stimulus..

Elaborate please, with sources.

Have you any evidence of this? What does a fiscal stimulus have to do with monetary policy?.

Elaborate please, with sources.

This is the Economics forum. Please keep posts like this one on the Conspiracy Theories forum.

Conspiracy may become a reality oneday. Watch this space. I recall Paulson saying to Congress that we were "days away from a complete meltdown of the financial system." That sounds pretty unprecedented to me.

You naysay a lot, but rarely offer any opinions of your own. I have never once on this forum seen you give a definitive reason or reasons for the recession. Just lots of maybes and possiblies. Hedging your bets. If you don't know the answers you're in no position to naysay. Just for once I want to hear a solid opinion of yours. Put your money where your mouth is (and don't reply with "maybe", "possibly", "one of the possible causes is", "one of several",etc)..

MG

HashSlinging wrote: »

He was specifically worried about Sinn Fein getting into government. Said if they did the country would be ****ed back to the 1800's.

Gas man my dad.

If by Gas you mean wise, then yes. The last thing we need at the moment are Marxist or neo-Marxist economic policies. The danger is that people will be seduced by the easy answers of those economic policies when we are more in need of tough love.

SkepticOne

Here's a graph of figures from the CSO showing the rise in unemployment.

nesf

Here's a graph of Unemployment 1983 - 2009, just for comparison:




We've seen nothing yet (not implying that we won't but if people think this is high unemployment they're deluding themselves unfortunately). Just to give some perspective to what the last serious recession was like. Bear in mind that the above graph is missing data from late 2008/early 2009, so it should be up around 9% at the last point.

SkepticOne

Here's one that combines all the data. The scary thing is not so much the absolute level but rather the rapidity of the climb. It has only taken us about about a year for the figure to double to 9%. Still only half the peak in the 80's, but we need to see some major slowdown over the next few months.

Time Magazine

book smarts wrote: »

Elaborate please, with sources. If anyone else said things like this without support, you'd probably ban them. We can't read your mind.

The onus of providing sources in academic debates lies on those making the claims. (Incidentally, note that I didn't ban road_2_damascus.) Strange that you request detailed sources off me, but fortunately I can.

This is not an unprecedent recession. It's harsh, but nowhere near "unprecedented":

Elaborate please, with sources.

America is not bankrupt. Bankruptcy is a well-defined state. Stating that it is not bankrupt is the equivalent of me saying "I am not in prison." It does not require a reference.

Elaborate please, with sources.

The Republicans do not have a veto power because the Democrats currently have a majority in both Houses of Congress and the President is also blue.

As for the statement that a government stimulus (that is serviced by loans) increases the likelihood of bankruptcy, it seems rather trivial to point out that increased borrowing increases the likelihood of being unable to pay back what you've borrowed.

Elaborate please, with sources.

You may not have read my post. I asked road_2_damascus two questions, one asking for a reference and one asking him to explain how a fiscal stimulus could devalue the dollar so much. These not need elaboration, or sources. They're questions.

Conspiracy may become a reality oneday. Watch this space.

Indeed they may. And when that emerges it's welcome on this forum. However this is a forum for reasonable debate and that includes reasonable hypothetical situations. You may be interested in this thread which indicates considerable dis-satisfaction on this forum with the amount of nonsense that is posted. I have made a decision to try and limit that. This is a decision of moderation, which you are welcome to challenge, but I suggest you obey the site rules and do so either on the Feedback forum or on the Help Desk.

I recall Paulson saying to Congress that we were "days away from a complete meltdown of the financial system." That sounds pretty unprecedented to me.

Then you may not have a particularly strong knowledge of economic history. The devestation in the financial sector that is currently occuring still pales in comparison to what happened in the Weimar, or in the US in 1929.

You naysay a lot, but rarely offer any opinions of your own.

That's a welcome change. People usually call me opinionated.

I have never once on this forum seen you give a definitive reason or reasons for the recession.

There are no "definitive" reasons known as of yet, going by my definition of "definitive". There are undoubtedly a plethora of reasons, including things few are discussing like the increase in oil prices around a year ago. To add some more complexity, the causes of the Irish recession are different to the US recession, which you just cited. Furthermore, I have speculated as to precisely I feel what mattered most; simply because you have not seen them does not mean they're not there. Go look.

Just lots of maybes and possiblies. Hedging your bets.

Or admitting that you cannot disentangle the eggs without the appropriate data. Would you rather I go and make baseless assumptions and half-true assertions that economists are typically criticised for?

If you don't know the answers you're in no position to naysay.

You're making a logical error, here. There exists a large set of factors that could potentially have caused this recession. The exact relative weighting of this I do not claim to know, nor should anyone else yet. However if someone proposes a reason that does not exist within this set, I feel justified to naysay. I do not know for certain whether the rise in oil prices was more important than the contagion caused by the sub-prime crash; but I'm not going to entertain notions that our poor performance in the Eurovision in recent years weakened consumer confidence.

Just for once I want to hear a solid opinion of yours.

Just once? Great: the United States is not in a state of bankruptcy.

Économiste Monétaire

Just messing around with some numbers from the ECB database for a relative position:



We may hit Spain's current level by the end of the year, unless emigration smooths that out.

SkepticOne

Économiste Monétaire wrote: »

We may hit Spain's current level by the end of the year, unless emigration smooths that out.

Interesting to see Germany's figure still going down though I doubt that will last.

Économiste Monétaire

SkepticOne wrote: »

Interesting to see Germany's figure still going down though I doubt that will last.

I definitely agree. You might want to check out the recent figures on industrial orders (here), and a piece by Eurointelligence on pending unemployment for Germany based on those figures (here).

Ernie Ball

The Economist wrote: »

The Republicans do not have a veto power because the Democrats currently have a majority in both Houses of Congress and the President is also blue.

You're misinformed about that. In the US Senate, assuming a full quorum of 100 Senators, it takes a supermajority of 60 votes to close debate. That is, without such a successful cloture motion, any member of the Senate can "filibuster": talk endlessly with effect that a bill is never voted on. Nowadays, this has been institutionalized in a strange way so that the threat of filibuster is all that is needed to torpedo a bill. So as a practical matter, the Republicans, with 41 seats in the Senate out of 99 currently filled, have a veto in that they can--if they suffer no defections--prevent any legislation they don't like from coming to a vote. This is why the Democrats currently have to consult them on the stimulus bill. It may also be why Obama has appointed Rep. Sen. Judd Gregg as his new Secretary of Commerce: Gregg comes from NH and his successor would be appointed by the Democratic governor of the state. If a Democrat is appointed (and Al Franken holds off the court challenge of Norm Coleman in Minnesota), the Democrats would have the 60 seats needed to close debate and the Republicans would be close to powerless.

Highsider

Well put it this way...over the last few days i have heard several economists say they feel the unemployment figure could very well top 500,000 (25%) by the end of this year or start of next. If this is the case we as a nation are finished.:(

Tech3

When comparing the unemployment rate at present with the highest in the eighties we are still not as bad in that regard. But when you include the cost of living and the debt the current government is in, it doesnt look easy to get us out of this mess.

One of the main things the taoiseach should be looking at is the cost of living in this country. An aldi rep had said earlier in the week food in this country was so expensive due to the high cost of running a store here. For example electricity here cost double the cost it is in the uk.

nesf

Économiste Monétaire wrote: »

Just messing around with some numbers from the ECB database for a relative position:



We may hit Spain's current level by the end of the year, unless emigration smooths that out.

Yeah when people moan about our situation one of the first questions I ask them is "Have you looked at Spain". They make our economy look healthy.

nesf

tech2 wrote: »

When comparing the unemployment rate at present with the highest in the eighties we are still not as bad in that regard. But when you include the cost of living and the debt the current government is in, it doesnt look easy to get us out of this mess.

Thankfully our public debt (at least at the start of this crisis) was a small fraction of what it was in the 70s/80s (in terms of % of GDP).

Économiste Monétaire

nesf wrote: »

Yeah when people moan about our situation one of the first questions I ask them is "Have you looked at Spain". They make our economy look healthy.

And that's saying something

Another interesting indicator: inflation. Unanimous tanking (I've included the UK for fun):


The January figures for the Euro area, Germany, and Spain are flash estimates. 50 basis point cut in March?

superhooper

Interesting to see that non-Irish nationals make up 20% of the live register. That's a jump of over 10% since 2004.Could it be that in the short-term that we could see the register drop as non-Irish nationals return home. Depends on their earning capability back home or elsewhere I guess.

foundation10

If we are not in a depression we are not far off one. The country has ground to a halt, we have a government operating in a vacum with a non functioning bank system and reported job losses of 1500 per day, anyone working in the private sector knows the seriousness of the state we are in

nesf

Économiste Monétaire wrote: »

The January figures for the Euro area, Germany, and Spain are flash estimates. 50 basis point cut in March?

I don't know, quite possibly given what the BoE have done. There will be enough trouble in Germany etc without a stronger Euro than we presently have.

superhooper

While on stats why not throw in Balance of payments

silverharp

nesf wrote: »

I don't know, quite possibly given what the BoE have done. There will be enough trouble in Germany etc without a stronger Euro than we presently have.

just guessing here but given that Germany will be finding it difficult to export in this climate, will there be an internal clamour (rightly or wrongly) to keep the value of the Euro in check?

nesf

silverharp wrote: »

just guessing here but given that Germany will be finding it difficult to export in this climate, will there be an internal clamour (rightly or wrongly) to keep the value of the Euro in check?

I would imagine so. A strong Euro is very damaging to the larger Eurozone economies (as well as smaller ones like ours). If we (Ireland) are lucky this may encourage the ECB to try and bring the Euro down which would help quite a bit here considering how export driven we are. There will be nothing like the devaluation that would happen if we had our own currency though.

silverharp

nesf wrote: »

There will be nothing like the devaluation that would happen if we had our own currency though.

indeed when you see whats happening in E. Europe and Russia etc. the $ & € will be underpinned as relative safe haven currencies.

nesf

silverharp wrote: »

indeed when you see whats happening in E. Europe and Russia etc. the $ & € will be underpinned as relative safe haven currencies.

Well look at the state of Sterling at the moment and that's not exactly a minor currency. A fair amount of "Should Britain should join the Euro?" pieces in their media in the past month, the Economist for instance.

The conundrum, what protects us from the fate of Iceland will also make the necessary corrections in this country a lot more painful. A quick devaluation of the Punt is quite a bit easier to take than bringing down wages in nominal home currency terms.

silverharp

nesf wrote: »

Well look at the state of Sterling at the moment and that's not exactly a minor currency. A fair amount of "Should Britain should join the Euro?" pieces in their media in the past month, the Economist for instance.

The conundrum, what protects us from the fate of Iceland will also make the necessary corrections in this country a lot more painful. A quick devaluation of the Punt is quite a bit easier to take than bringing down wages in nominal home currency terms.

Sterling is getting in the neck on all fronts, the intersting experiment here is does a devaluation make much difference when global trade is falling out of bed? Otherwise for smaller currencies around the world some of the devaluations will be very violent which is nasty if debts are denominated in major currencies. In countries like Hungry alot of real esate loans were denominated in CHF and €, ouch! Throw in the fact that bond rates are most likely going to rise several ponts over the next decade and many countries are going to suffer a draining in funds

Time Magazine

Ernie Ball wrote: »

You're misinformed about that. In the US Senate, assuming a full quorum of 100 Senators, it takes a supermajority of 60 votes to close debate. That is, without such a successful cloture motion, any member of the Senate can "filibuster": talk endlessly with effect that a bill is never voted on. Nowadays, this has been institutionalized in a strange way so that the threat of filibuster is all that is needed to torpedo a bill. So as a practical matter, the Republicans, with 41 seats in the Senate out of 99 currently filled, have a veto in that they can--if they suffer no defections--prevent any legislation they don't like from coming to a vote. This is why the Democrats currently have to consult them on the stimulus bill. It may also be why Obama has appointed Rep. Sen. Judd Gregg as his new Secretary of Commerce: Gregg comes from NH and his successor would be appointed by the Democratic governor of the state. If a Democrat is appointed (and Al Franken holds off the court challenge of Norm Coleman in Minnesota), the Democrats would have the 60 seats needed to close debate and the Republicans would be close to powerless.

I chose my words cautiously. The Republicans have no veto power. I agree there is a remote possibility they could fillibuster it, but that's not the same as having a veto; and in any case the Republicans are generally warm to the idea of a stimulus: the debate is what/when/how much.

Ernie Ball

The Economist wrote: »

I chose my words cautiously. The Republicans have no veto power. I agree there is a remote possibility they could fillibuster it, but that's not the same as having a veto

You really didn't choose your words cautiously no matter what kind of backtracking you're engaging in now. Your words seemed to suggest that Republicans couldn't block stimulus legislation if they wanted to. Remember, the exchange went like this:

and it is due to get much worse if the Republicans refuse to pass the stimulus package soon...

The Republicans do not have veto power, and the stimulus is more likely to cause bankruptcy than no stimulus.

If your response is germane at all, it is meant to be an answer to the claim that the Republicans might "refuse to pass the stimulus package." You say, they "have no veto" which is only relevant (and not a non sequitur) if you mean that they don't have the power to refuse to pass the stimulus package. Yet, of course, in this sense they do have that power and therefore do have a veto.

Time Magazine

Ernie Ball wrote: »

You really didn't choose your words cautiously no matter what kind of backtracking you're engaging in now. Your words seemed to suggest that Republicans couldn't block stimulus legislation if they wanted to. Remember, the exchange went like this:

If your response is germane at all, it is meant to be an answer to the claim that the Republicans might "refuse to pass the stimulus package." You say, they "have no veto" which is only relevant (and not a non sequitur) if you mean that they don't have the power to refuse to pass the stimulus package. Yet, of course, in this sense they do have that power and therefore do have a veto.

I am not back-tracking. I still assert that the Republicans have no veto, a term I reserve for instruments such as the Presidential veto. If you want to try and convince me otherwise, that's fine, but please do so via PM because this is really off-topic.

Running Bing

alentejo wrote: »

I know things are bad...very bad times..

I can get the feeling however that we are talking our way in to more economic chaos. There is a utter and complete lack of any confidence at the moment which is making a bad problem worse.

If we say we are entering into a depression, we will end up in a depression.

Yes I agree with this.


I am amazed at the sheer zeal with which the Irish people have embraced this recession (or whatever you want to call it). I swear people get off on it.

There are serious problems with this economy and anybody who denies that is wrong, We cant ignore these problems but we have to realise there is still a lot of good stuff there. Things we can build on.

The global economy is in a bad state, we focussed too much on construction and now that's running dry, our banks have been run into the ground by greed and incompetence and we're facing increasing competition from former soviet/third world countries. Thats the bad, lets just face it, work out ways to deal with it and move on. I know its easier said than done but Im sick of the fvcking doom and gloom mongers harping on about "the eejits in the Dail" or the "end of the Irish economy" when they never open a newspaper other than the Sun who never took the slightest bit of interest in economic matters until now.

thebman

Babybing wrote: »

Yes I agree with this.


I am amazed at the sheer zeal with which the Irish people have embraced this recession (or whatever you want to call it). I swear people get off on it.

There are serious problems with this economy and anybody who denies that is wrong, We cant ignore these problems but we have to realise there is still a lot of good stuff there. Things we can build on.

The global economy is in a bad state, we focussed too much on construction and now that's running dry, our banks have been run into the ground by greed and incompetence and we're facing increasing competition from former soviet/third world countries. Thats the bad, lets just face it, work out ways to deal with it and move on. I know its easier said than done but Im sick of the fvcking doom and gloom mongers harping on about "the eejits in the Dail" or the "end of the Irish economy" when they never open a newspaper other than the Sun who never took the slightest bit of interest in economic matters until now.

I think most people are scared sh**less because there isn't a plan from the government.

They keep saying high knowledge and we keep telling them that saying it isn't a plan.

After reading the full thread I'm in a depression

Anonymous1987

Right now we're not in a depression but if a few things take a turn for the worst we very well could head that way.

1. The state of the US economy is pretty poor right now and the proposed stimulus package is not likely to have the intended effect given that approximately 40% of it is a tax break at a time when consumer sentiment is already poor. People are not likely to spend their tax payouts and boost businesses rather they will save it. Ireland can't recover if the worlds largest economy and a significant contributor of FDI is struggling.
2. The global economic crisis is lacking a co-ordinated effort and protectionism is seeing a comeback e.g. the US theme of Buy American and the UK argument over British jobs for Britions. Protectionism had a role to play in making the 1929 depression even worse with the Smooth-Hawley Act. Ireland is a small open economy and these developments will impact enormously on us.
3. Ireland was already facing the bursting of the property bubble even before the sub-prime and financial crisis developed. This has exacerbated our difficulties.

Having said this the biggest threat to a recovery would be proctectionism which at this stage is only in rhetoric and specific cases such as the Lindsey oil refinery however the threat is still there

SkepticOne

IMF Chief says leading economies in Depression; Warns of failure to act on Banks; US and Ireland prepare new bank bailout plans

Strauss-Kahn said the world's advanced economies -- the U.S., Western Europe and Japan -- are "already in depression,"

[link]

If he thinks Western Europe is in a depression then he probably thinks Ireland is in one.