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« February 2nd Afternoon: The Recession Diaries | Main | February 5th Evening: The Recession Diaries »

February 03, 2009

Comments

Yvonne

Meanwhile a victorious Turlough O'Sullivan is unapologetic this evening in seeking an expansion of the Government's corporate welfare programme:
“'We will continue to engage with Government on active supports for enterprise,' Mr O’Sullivan said. These supports were as important, if not more important than public sector cuts, he said."

Just how much consensus is there I wonder and how much of it is being manufactured by soundbites such as his and a compliant (and possibly complicit) media?

I am surely not alone in seeing these measures as part of an overall attack on public service provision generally and specifically as part of a concerted effort to drive down pay and conditions for all.

The real question is what are we going to do about it?

Libero

Please keep up the good work. I can’t say I agree with all of your analysis; as one comment put it, your relaxed stance on national debt needs some heavy qualification. Still, your writings are a breath of fresh air in the new consensus of “deflation with dignity”. You are dead right to emphasise the destructive results of removing demand from the economy, and dead right to point out the hypocrisy of those who lauded the boomtime inflation of aggregate demand in the economy but now piously request with menaces that we all cut back in the national interest (and put gratuitous boots into the public sector at the same time).

Above all, you are right to point out the overwhelming unfairness of it all. The boys and girls who cashed out of the property bubble are now contemplating a comfortable retirement, even if creditor banks come sniffing for their outstanding development loans. There is no extra pain for them, even though Revenue has details of windfall profits from the bubble years. There isn’t even a hint that the government will assist banks in taking back billions owed by developers under personal guarantees, and which will instead have to be met by the taxpayer through recapitalisation. Instead, it’s up to the PAYE sector to bend over, as per usual. All the while, the government manages to find millions to spend, for the very first time, on schemes to buy new-build apartments in the name of social housing, and sub-prime Home Choice Loans.

Michael Taft

Thanks, Libero, for your comment. I hope that I haven't been too relaxed about the debt (not nearly as relaxed as the present crowd who allowed it to balloon the way it did due to events that were wholly predictable such as over-reliance on property tax revenue) - but I take your point. It's just that I believe that the fiscal crisis cannot be solved within an economic contraction and any attempt to do so risks perpetuating fiscal deficits and hammering the economy at the same time. We must, instead, address it once we have troughed out - and do so consistent with economic growth. A fine line, surely and at times I may not be wholly appreciative of that in my desire to fight off the fiscal reactionaries. There is clearly considerable room for revenue raising measures - especially on those that you rightly refer to. And by the way, 'deflation with dignity' is a great line - if I use it I will certainly credit you.

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