Book ’em Dan O’: Hitting The Accelerator on The Miserly Road to Ruin

A little post-budget commentary. It’s hard to argue with Irish Times economics editor Dan O’Brien when he says the government sought to ‘minimise the risk of confrontation with any powerful grouping or those with vested interests’, seeing as the broad parameters of the budget were imposed by the Troika and backed by business groups here.

IBEC, the employers’ body, said in its post-budget briefing note that the budget was ‘by and large equitable and progressive’, and that those with highest incomes and wealth will be ‘hardest hit’. This description reflects the government’s own portrayal of the budget.

Therefore the consensus among ruling politicians and bosses is that someone on minimum wage with four children who has seen their child benefit payment fall by nearly €700 a year got off lightly by comparison with, say, Michael O’Leary or the Chief Executive of any IBEC firm.

In the wake of the budget, Dan O’Brien suggests here that the government could have adopted a ‘more radical route’, by slashing expenditure far more quickly. To do this, he finds justification in the growth in the size of the State in Ireland over recent years, by comparison with that of Germany: ‘the expansion in the size of the State also far exceeds that in Europe’s paymaster and politically most powerful state, Germany, where spending is projected to rise by just 28 per cent in the 11 years to 2013.’

But he only refers to growth; he doesn’t refer to the size of the State itself. Why is that?

Well, feast your eyes on this.

Image_imf

Above are the IMF’s predictions for government spending in the coming years. As you can see, Ireland, having funnelled shitloads of billions in public money into banks, is already well below Germany in 2012, and in the coming years, government spending in Ireland as a proportion of GDP will fall way below the United States and a United Kingdom that is slashing away frantically at its welfare state provision. I got the idea to put together the graph from an article in the Guardian by Aditya Chakrabortty, which showed the data for the US, Germany and the UK alone to illustrate the scale of the radical paring back in the UK. Chakrabortty wrote:

‘strip away the usual economic and financial alibis for such drastic austerity and what you’re inevitably left with is a purely political motive: namely, a desire to transform the British state from being recognisably European, with continental levels of public spending, to something sub-American in its miserliness

The Irish state, meanwhile, is being transformed into something sub-sub-American in its miserliness. But the hardest hit in this equitable and progressive process, if you believe what you read in the Irish papers, are Ireland’s boss class. Dan O’Brien, meanwhile, claims that accelerating this road to ultra-miserliness would entail ‘confronting interest groups, including the most powerful ones’.

But the most powerful interest groups are the ones with their pedal on the accelerator, and Dan O’Brien is one of their main cheerleaders.  

 

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