Who will be the last to suffer for the mistake of austerity?
This faith-based construction of economic ‘reality’ is no less ideologically driven than the Soviet five-year plans
The idea that the magical market is going to make up a substantial part of what this half of Irish households will lose in the budget is pure fantasy – the bulk of their income doesn’t come from the market, it comes from the State. And the negative economic effects of cutting that income are much deeper than those of cutting the incomes of the better off. We know what people in the bottom half do with the money they get from the State: they spend it. Unlike those at the top they don’t have the choice of saving large parts of their income. They have to buy stuff with it, helping in the process to keep local businesses going and to keep people in jobs in the battered domestic economy. More cuts to the incomes of the poorest means less spending, more unemployment, lost taxes. And more scratching of heads when it turns out that all the promises of economic growth were illusory.
Cutting the incomes of the poorest people is indecent. It is particularly stupid when children are overrepresented in poor households, meaning the long-term social and economic costs will be all the greater. But even leaving aside considerations of basic decency, it is an exercise in bone-headed futility, like generals throwing kids and the elderly on to the frontlines in a war that is already lost. It is not fiscal responsibility, but social and economic recklessness. We’ve had zombie banks and zombie politics and now we have a zombie idea, a policy based on calculations admitted to be wrong. Are we really telling people to go cold and go hungry because somebody couldn’t do the maths?