Tuesday 12 December 2017

Banking everything on a black hole

• On reading at the weekend about the efforts to introduce national identity numbers in India, I was struck by how dramatically that project differs from Ireland's situation. They hope that by giving ID numbers to the poorest people, they can then pay welfare benefits directly to those people -- as things stand, a lot is being siphoned off by local middlemen.

Ireland is currently doing the exact opposite. We have massive public and private debts run up by a small group of developers, speculators and bankers. The gamblers can't afford to repay their debts so we have assumed all this debt and we are extracting the necessary interest payments from the middle and lower income groups. Alas, our very top earners pay no tax, so we can only hit the middle and lower groups. Naturally, this has the reverse effect to what they hope for in India, in that the money comes straight out of the economy and disappears into a banking black hole.

Every year the Government withdraws billions on the expenditure side and every year they are surprised to find that total tax take has fallen by almost as much. I wonder how many times they need to be surprised before they figure it out.

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