I live in Ireland, and it was quite disheartening when the last budget cuts appeared. Taxes were increased across the board. If you were earning 25,000 Euros a year, you would pay an extra 1000 Euros in tax (and surprisingly enough, this low earner class was the worst beaten income group by hike in tax in percentage terms - 4+% more tax!).

Since its general consensus that banks, govt. etc are at fault (to which I agree), I want to say something which generally is ignored, just a theory. The Celtic Tiger years, due to low Corporation Tax rates, have had the similar impact on the economy as Resource Curse (http://en.wikipedia.org/wiki/Resource_curse). Ireland got rich so fast with all the incoming money that lots of careless spending by government as well as people was ignored. The property prices went up crazy, things became awful expensive etc etc. When nobody cared about how much govt spent or how much banks are landing real estate developers, this was bound to happen IMHO. If Ireland had gotten rich slowly and on its own (by increasing exports, productivity etc), such rackless spending bubble economy would probably never have manifested itself.