For once and for all, let's debunk one of the daftest myths ever concocted about the Irish economy; the one that says Ireland spends too little on public services.
By the standards of some Scandinavian economies the idea might have credibility, but only for a few seconds.
If we take statistics reported by the European Central Bank for 2005 - the latest year for which comparable data for all EU countries is available - Ireland's general government expenditure as a percentage of gross domestic product (GDP) was just 34.1 per cent.
The comparison with its EU equivalent of 47.1 per cent might seem to put a lid on the argument: Ireland spends too little on its public sector to expect good public services.
Another variant of this argument is the one that says public services are poor because we do not have high enough taxes.
You've heard this one often enough to know how it goes; it starts by pointing out how wonderful public services are in certain Scandinavian countries. It then notes how high income taxes are in those countries, before concluding that all we have to do is increase taxes here and - abracadabra - first-class public services will materialise by magic. The argument applies the reasoning of a moron: "All dogs have four legs, my table has four legs, therefore my table is a dog."
Fighting that reasoning is tedious because, no matter how many times you knock this fallacy down, someone will try and pop it back up again. But it has to be done.
Because of international conventions, Irish fiscal data is usually always presented as a share of gross domestic product (GDP), rather than gross national product (GNP). Both GDP and GNP measure the total value of goods and services created in the economy each year, and for most countries they are similar if not identical.
Except Ireland, that is. So large, in fact, is the difference between the two in this State that fiscal data - and the arguments based on them - have become seriously distorted.
To see how, let's go back to that figure for the general government spending as a percentage of GDP. At 34.1 per cent it is lower than all other EU countries except Lithuania and Estonia. A damning indictment of failure, right? In almost any economy except Ireland, it might be. But in Ireland - and because of Ireland's success rather than any failure - it isn't. Thanks to a world-beating performance attracting multinationals, Ireland is one of the world's most open economies, a fact captured by our GDP statistics.
Like GNP, GDP captures the value of goods and services created in the economy each year. Where the two measures differ is in the way they define the economy.
For GNP that definition is jurisdictional in that it includes economic activity undertaken by an Irish-owned organisation outside the State's boundaries and, by corollary, excludes activity undertaken in Ireland by foreign-owned entities.
GDP, by contrast, is a geographic term including all activities occurring on Irish soil, regardless of ownership.
The overlap, while substantial, is far from total. In 2005 - the last year for which accurately revised figures are available - GNP was 1.18 times GDP.
Now, let's go back to that figure for general government expenditure, 34.1 per cent. When we measure this as a percentage of GNP we get a significantly higher figure of 40.4 per cent.
Why should we use the latter and not the former figure?
The whole point of measuring any fiscal phenomenon - spending, taxation or a budgetary balance - as a share of a denominator is to get an idea of how much of a burden on the economy it is.
In an economy with such a huge multinational presence, GDP gives an exaggerated measure of the economy's ability to bear that burden in the form of taxation given the relatively light (but nonetheless crucial) tax on this kind of economic activity.
Multinational corporations have a relatively low labour intensity and their supply chains generate less VAT revenues within Ireland than the kind of activity measured by the more taxable GNP.
Still, we have only closed under half of the 13 percentage points gap between Ireland's expenditure share and the EU average. To complete our understanding of why Ireland's "low spending" doesn't reflect poor public service provision, we have to turn to transfer payments.
In the 2006 OECD Factbook, social expenditure - transfer payments to you and me - is given as a percentage of GDP up to the year 2001. Noting what was just said about GDP, we should convert this to GNP. When we do, Ireland's share of payments, 16.4 per cent, is over seven percentage points behind the figure for the OECD average - the closest available proxy for the EU for this data - enough to wipe out the remainder of the gap. This is a less than encouraging flattering comparison when you think of the EU's abysmal record on unemployment. But it is when we look at more micro-level data that the silliness of the "we don't spend enough on public services" argument becomes self-evident.
The same OECD factbook reveals that, by any metric, Ireland spends more on health than the average OECD country.
The OECD has also estimated that where France - the paragon of state healthcare - has seven nurses per 1,000 people, Ireland has 13 nurses per 1,000 people, almost double.
So the reason that Irish taxpayers are deprived of good public services has nothing to do with a lack of resources or taxation and everything to do with the inability of the public sector to turn money into results.
