Borrowing our way to a bright future?
I see that an NCB report is predicting economic roses all the way for the next 15 years (Irish Independent, March 23).
However, I listened to the optimistic economist Dermot O'Brien of NCB arguing the toss with the rather less optimistic economist Jim Power of Friends First on RTE TV News at Six last evening and it occurred to me that the economics of the individual wage earner and house owner are different from those of the corporate sector.
As a family man who lived through periods of wild inflation, oil rationing and emigration of highly qualified young graduates, I look at young people borrowing to the hilt to buy tiny apartments, older people remortgaging to "consolidate" their debts or buy investments abroad and I am reminded of the old saying, "if you want to make God smile, tell him your plans".
The healthy state of most the big businesses on the Irish stock market is reliant on the boom in the construction industry. At the same time, the mad house prices (?3.7m for a semi ?) that drive the construction industry are due to an imbalance between supply and demand.
And that demand, in turn, is fuelled by the frenzy to get onto the property ladder before the good times end. It seems to me an endless circle akin to pyramid selling on a grand scale. PAUL HILLIARD, BLACKROCK, CO LOUTH * A recent article suggests that Irish borrowers might find themselves in trouble if the German economy recovers and European interest rates rise strongly. That's possibly true.
However, there also seemed to be an implication that a solution to a borrowing and debt crisis might be for Ireland to pull out of the Euro.
It's not clear that this would be a solution.
If Ireland's borrowing was all domestically funded then leaving the Euro and allowing inflation with a return to a devalued Irish pound might be a way of getting borrowers off the hook by devaluing the debt and basically robbing the lenders, who would be other Irish people.
If Ireland leaves the Euro and returns to a devalued Irish pound then the debt will not go away, simply become harder to pay back. Let's not use Argentina and Italy as our financial role models, please. HUGH SHEEHY, BARCELONA