Only those addicted to the more arcane aspects of macroeconomics will rush to the appendix table in the Budget to analyse changes in the "cyclically adjusted Budget balance". Adjusting the actual surplus for the exceptional rate of economic growth provides the best basis for judging how the changes in taxes and spending contained in the Budget will affect the economy.
The Estimates show that further stimulus is on the way for our already hyperactive economy. The outcome of the Minister's desire to prop up the national wage agreement and his willingness to abandon his own spending limits is an inappropriate macroeconomic policy mix.
How serious this is depends on the contribution of domestic factors to Irish inflation.
Our entry to the European Monetary Union transferred responsibility for our monetary policy from Dublin to Frankfurt and reduced the influence of domestic factors on our inflation rate, which in the long run will not differ greatly from the European average. But in the short run the Minister hopes that by reducing VAT and fuel excise taxes he will gain credit for lowering inflation, just as he was blamed for increasing it through last year's tobacco tax hike.
The bigger issue is whether the overall stimulus contained in yesterday's Budget and November's Book of Estimates will give another twist to the inflationary spiral. Most economists would accept that the fiscal stimulus is inappropriate at this juncture but few would venture an estimate of how big an impact it will have on inflation. Perhaps Mr McCreevy's luck will hold. The external forces that raised inflation this year are weakening. The euro is bouncing back, oil prices are falling, and - most important of all - the 10-year-old US boom may be running out of steam. The inflationary effects of the Budget may be more than offset by these deflationary external developments.
Prof Brendan Walsh is in the Department of Economics, University College Dublin