A question of austerity
Sir, – In quoting and summarising economist Prof Paul Krugman, Harry McCauley (October 11th) misses the key reason why the professor’s left- wing philosophy of “borrow now and have future generations repay later” won’t work in Ireland. Nobody will lend us the money. A point, I’m sure, that does not require the Department of Finance to spend other countries’ money on the professor’s books, let alone on actual economists. – Yours, etc,
Sir, – Perhaps I am missing something, but there seems to be a great deal of confusion over the term austerity and its usage. 1. It can be used to denote a vaguely normative economic principle (value neutral) in which an economy does not borrow more than it spends by saving where possible and raising taxes where necessary, eg a disciplined economy. 2. Or, as seems the case across Irish media, it now also indicates an economic strategy in which aggrieved neo-liberal foreigners do there damnedest to destroy the economy and deviously create hardship for all those within it. The latter of which is entirely emotional and misrepresents what the European Central Bank and our donors are saying.
The emphasis on this side of the Rhine is maintaining economies that don’t spend in an unsustainable manner. Period. I have yet to read or hear German politicians ordering the dismantlement of the health service, the social welfare system, educational system etc. After all, Germany, the Netherlands, Finland, etc, are social democracies. The strategy is to force necessary structural change by withholding funds. Ireland wouldn’t have to undergo (as much) hardship if it restructured its revenue system (property tax, water tax, dare I say it – income tax collection, etc) and broke up the umpteen cabals who are effectively holding the country to ransom; consultants, barristers, teachers, nurses, politicians, farmers, et al. Their respective unions, representative bodies, and PR apparatchiks are having a field day blaming all the country’s woes on “austere” economists.
So please Irish Times, less talk of No 2 “austerity” and more of No 1 “disciplined and sustainable economic policy”. – Yours, etc,