Sir, – Has anyone noticed that with all the current pre-budget discussions there has been little or no use of the phrase “fiscal space”. This is odd as Government Ministers and TDs (and even the Opposition) have always enjoyed using this phrase. Maybe the “fiscal space” has disappeared. Imagine that.
As we begin to exit from the very costly and traumatic Covid pandemic, our national debt is now over €250 billion, up from €200 billion.
Throwing money at our problems seems to have become easy.
Forget about fiscal space, we have been operating using a “fiscal chasm”. National development plans, billions on housing, billions on redress schemes, maybe a Covid bonus for everyone in the country, more money for pensioners, billions more for the health service, etc, money for anything and everything. In this regard, some of the suggested budgetary measures are mind-boggling, so much so that the Opposition parties seem very quiet. They appear to have been caught somewhat flat-footed.
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I haven’t witnessed the usual “missed opportunity” hysteria from them. That gives me an idea of the level of mad spending that will be in the budget.
Are we on some sort of psychedelic trip where we feel no pain and everything is possible? Are we like the US, where when so much is owed it just doesn’t seem to matter anymore? When will reality catch up and our national finances come crashing around our ankles?
To be clear, interest rates and therefore the cost of borrowing are beginning to show signs of increasing after years of decreases.
When these rates move to a more long-term level, a massive chunk will be gouged out of our national finances. It won’t be pretty.
Ultimately, I think it’s time to stop using the clever yet meaningless phrase that is “fiscal space” and replace it with one that epitomises spending money madly, way beyond our means (mainly to buy votes). But I’m struggling to find a new one. Maybe we should call it the “fiscal reality gap”? – Yours, etc,
BRIAN CULLEN,
Rathfarnham,
Dublin 16.