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« The Incredible (Slowly) Shrinking State | Main | Irish Swedish or Swedish Irish? »

May 01, 2018

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Fact Checker

The question is not "Is Ireland's public debt high?" but instead "Is Ireland's public debt high relative to public infrastructure?".

For me the answer is a conclusive yes.

Anyone who has spent time in places like Finland, Austria or Belgium will come across appreciably better infrastructure. Public transport networks are much better, hospitals are bigger and better equipped, water systems don't leak as much. Ireland is much more southern than northern European in this regard.

The Belgians have a legacy debt because of huge deficits in the 80s and 90s. But at least they have a decent railway and metro network.

Ireland's debt does not stem from a capital infrastructure spree. It is nearly all a result of large primary deficits in the crisis period as well as bailouts for banks.

Ireland faces very big public infrastructure needs in coming years (no matter how the economy performs). Some thought needs to be put into keeping it at a sustainable level and insulated from the short-term swings in tax revenues.

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