Thursday 18 October 2018

Yes, we've recovered but they could blow it again

The economy is in good shape - exactly the right time to fix that roof while the sun is shining, writes Colm McCarthy

Comparing debt to the exaggerated GDP measure makes the debt burden look smaller; and debt interest costs to the Government are rising
Comparing debt to the exaggerated GDP measure makes the debt burden look smaller; and debt interest costs to the Government are rising
Colm McCarthy

Colm McCarthy

Five straight years of economic recovery and the slow restoration of financial stability cannot forestall the inevitable query: "They are not going to blow it again, are they?"

The economic collapse from 2008 onwards is fresh in the memory and the more careful politicians have been suppressing their basic instinct (spending money) in pursuit of credibility with the less forgetful voters. The best time to fix the roof is when the sun shines: notwithstanding the huge debt overhang, the State is still adding to the official debt burden.

Last week Finance Minister Paschal Donohoe noted that "….potential challenges, including Brexit, exist, making it even more important that the Government continues its careful stewardship of the public finances. We will continue to focus on prudent management of the economy and on implementing competitiveness-oriented policies to ensure we remain resilient in the years ahead", he promised.

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