Saturday 10 December 2016

Suffering for a failed austerity

Published 09/12/2012 | 05:00

IT is not too surprising that the most interesting comment on last week's flawed Budget came from Pat Rabbitte, who, responding to opposition taunts about Labour U-turns, cited the view of John Maynard Keynes that: "When the facts change I change my mind. What do you do?" Sadly, Mr Rabbitte's position also accidentally illustrated the main failing of this Government. Its flaw, which is also common to our European rulers, is that whilst the facts driving the evisceration of the continent have not changed, our politicians continue to cling to a set of wrong answers that are visibly failing to work.

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This failure was epitomised by Michael Noonan's claim that the "Irish financial crisis can be summarised in one word – debt". The Finance Minister was half-right: he summarised the problem but utterly failed to articulate the solution. Austerity, as it is practised by this Government, is not the correct answer to the facts of the Irish economic situation. It instead is the fiscal equivalent of bailing out a sinking ship with a teaspoon where every little helps, but not by very much and the ship sinks anyway. This dilemma is not solely an Irish one. Across Europe, the Malthusian embrace of austerity, like protectionism in the 1930s, demonstrably is not working. Only growth and employment can rescue a continent, let alone this small peripheral island, from its current historic error.

No one doubts that the Government – or most of it at least – is well intentioned. But there is now a perception that it is a miserable administration capable only of piling misery upon misery for its citizens. The Coalition may have started off with genuine reformist intent, but already it has descended into a squabbling mismatch that is only capable of acting merely as an advocate of vested interests. More chillingly, in terms of its prospects for re-election, few now believe it has anything of worth to contribute to the lives of a citizenry, increasing numbers of whom are slipping irrevocably towards a state of, at best, respectable impoverishment.

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