Brendan O'Connor: Failed austerity experiment defies logic and is killing recovery hopes
Policy has meant taking from the middle to give to the welfare classes in a form of 'stimulus package'
In one way, it is astonishing honesty from a government minister. Joan Burton believes that money given by the State to the unemployed and the welfare classes goes straight back into the economy and into the pockets of local business people. On the other hand, she believes that much of the money given by the State to the middle classes, in the form of children's allowance – the only transfer payment from the State enjoyed by most working families – goes straight into the banking system to pay off mortgage debt. This is her rationale for not cutting children's allowance to the better off – because the coping classes need it to pay their mortgages.
Joan's two notions reveal an interesting contrast that says a lot about the curious nature of Irish austerity.
So social welfare should not be cut at this time, according to the minister, because it is the biggest stimulus package we have, and it is a way of funnelling money directly into hard-pressed businesses around the country. The logic seems to be that people on the dole go out and spend their dole straight away in local businesses.