Deficit arguments

Apr 1st, 2009 | By | Category: Ireland

“The DART was full of people; they must still be going out.  And The Point was full for the Cirque du Soleil”.

“This is becoming like a cracked record”.

“Well, you agree with the news that there is an economic crisis and I don’t see any sign of it”.

“It’s the Brideshead syndrome”.

“The people on the DART weren’t Brideshead people”.

“I’m not saying they were; what I’m saying is that even in dire economic times there are always some people who have money.  Remember the early-80s?  We saw Travellers living at the roadside under tarpaulins and yet the pubs were full and Lansdowne Road was always full for rugby matches”.


“The last figures I saw were grim: tax revenues of €34 billion against government expenditure of €55 billion – that means a bad budget next week and for years to come”.

“But we didn’t cause the problems.  Why should we have to pay for the builders and the bankers?”

“I don’t know, but we can’t carry on as we are. You can’t carry on having €20 billion deficits in a country of four million people.”

The conversation must take countless forms in countless places; if words were a saleable, then the deficit would be cleared in an instant.

The figures become frightening when one thinks about them.  At the beginning of the year, the Government anticipated revenues of €41 billion; a figure that was revised to €37 billion, and reduced again to €34 billion.  While revenues fall, expenditures rise with the level of unemployment; so even attempts at economies are being cancelled out by the rising social welfare responsibilities.  €21 billion equates to €5,000 per every single person in the country.  If the Government were to apportion the year’s shortfall equally across the country, it would mean a family of four would account for €20,000 – and that’s just the deficit for this year.

The Government is now warning that there are years of pain to come, yet everyone interviewed on the news programmes assumes that the pain should be borne by someone else; some of the rhetoric borders on plain silliness.  If there is not a building of consensus, prolonged protest and a proliferation of strike actions will only serve to exacerbate the difficulties.

In the midst of it all, a Christian voice might have been welcome.  Church leaders talking about equity and justice, and a vision for the nation and the need for unity amongst people, might not have solved all our problems, but might have demonstrated that at least the church had a genuine concern.  One searches the pages of newsprint in vain for any concerted Christian engagement.

A friend said last night that there was a website where members of the Irish public might express ideas and suggestions.  Unable to find it, one proposal to make a difference: give David McWilliams a seat in the Seanad and appoint him as finance minister.

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  1. David’s proposal is to spend out of the crisis. Which is not unreasonable in many ways. I think the argument on the other side is that we are too small a market for that to have a significant impact, therefore no bang for your buck. Really what it boils down to is whatever we do will have very little effect, so the government is opting for a batten down the hatches and try to be in reasonable shape for the upswing, essentially leaving all the stimulus activity to the rest of the world in the hopes that as they lift we get to piggy back on that. BTW, this happens to consolidate the position of the wealthy through deflation, while battering those who are on low incomes with big debts, so guess who has been bending their ear (again). David’s suggestion works out to be more equitable and if we assume that rampant inflation will follow the current situation (which it usually does) then any deficit on the part of the country will be be reduced by inflation. If I loose my job I’ll focus my hunt outside this country, I’m excessively prudent, so I didn’t cause this situation and don’t plan to pay for it if I can avoid doing so.

  2. Those with cash in hand, or even secure homes and incomes (like clergy!) are definitely going to do much better.

    I wonder if some employers are not taking advantage of the recession to push down wages?

  3. I agree with everything you say except your last point. David McWilliams has contributed to the downfall of the economy by his constant mantra of “I told you so”, his Prophet of doom and gloom mentality will not get us out of this mess but only drive us further in.

  4. Except he is one of the few voices arguing for a Keynesian response to the crisis; the rest are taking us down the path of the 1930s, a depression that only really ended with the cataclysm of war.

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