Yesterday's dreadful retail sales figures provided a sobering reality check for anyone inclined to believe that we have put the worst of our economic problems behind us. Not alone did retail sales fall by a further 4pc in the year to the end of April, retail sales have now fallen by a quarter since 2007.
The figures paint a picture of an economy mired in a deep 1930s-style depression. Even people who have money are terrified to spend it. In fact the underlying trend in April was even worse than the headline figures indicate. If motor sales, which have been artificially boosted by the scrappage scheme, are excluded the annual fall in retail sales was 5pc.
When the scrappage scheme ends at the end of next month new car sales are likely to revert to their disastrous 2009 levels, pulling retail sales even lower.
What yesterday's figures tell us once again is that the growth forecasts contained in last year's four-year plan were hopelessly optimistic. With the Government relying on economic growth to deliver almost half of the increased tax revenue it is hoping will allow it to reduce borrowing to 3pc of national output by 2015, the complete absence of any growth in the domestic economy indicated by the latest retail sales figures makes a mockery of the assumptions upon which last November's EU/IMF bailout was based.
Yes, the EU and IMF deserve some of the blame for the bailout's obvious flaws. However, while they have been rightly criticised for charging us an excessive interest rate and refusing to countenance any write-down in either government or bank debt, we in this country also have a case to answer.
As the controversy over Enterprise Minister Richard Bruton's plans to reform the system under which Joint Labour Committees set legally-binding wage rates well in excess of the minimum wage demonstrates, many people in this country still don't get it. We complain loudly about high prices but then object strenuously when a government minister attempts to do something to address the problem. We can't have it both ways.
This unwillingness to confront unpleasant realities has resulted in the Government attempting to pursue a series of incoherent and contradictory policies. It has a jobs strategy, funded by a €1.9bn raid on the retirement savings of private-sector workers, but it reversed its predecessor's cut in the minimum wage and it is apparently split down the middle on reforming the JLCs. The Government also seems determined to turn a deaf ear to the OECD's recommendation that social welfare payments to the long-term unemployed be cut.
Meanwhile, despite the pension levy and recent pay cuts, the wages paid to most Irish public-sector workers still vastly exceed those paid in the UK and most mainland European countries. Yet this Government has promised no further public-sector pay cuts and seems determined to stick with the nonsensical Croke Park Agreement.
Confronted with this policy paralysis, is it any wonder that the domestic economy is flatlining while the benefits of the export boom are largely confined to the multinationals and the agri-food sectors? Unless -- and until -- we and our political leaders are willing to take the difficult but necessary steps to revive the domestic economy, things are going to keep getting worse rather than better.