At this moment our Minister for Finance has rather the air of an accountant who, having failed to keep the books in order during this financial year, is desperate to make them add up somehow as he approaches the end of that period, writes Garret FitzGerald.
But the management of an economy is not a matter of making accounts balance: it is - naturally enough! - a matter of economics. It involves managing public revenue and spending over an economic cycle that is spread over a number of years.
The key to good economic management lies in regularly adjusting taxation and spending to the particular stage of the cycle at which an economy finds itself at any given time. When the economy is booming, spending should be held back, and taxes perhaps increased, in order to damp down inflation and build up a margin of resources. When there is a recession, the margin thus built up should then be used to encourage economic activity by increasing public spending and, perhaps, cutting taxesso as to encourage economic activity.
It has to be said that Irish governments have not been too good at this kind of economic management. They have tended to spend - indeed overspend - money during a boom, and thus to leave themselves short of resources in bad times, as a result of which they usually feel it necessary to cut spending in a recession, thus aggravating the subsequent down-turn.
Now, whatever criticism might be made of the social balance of his budgetary policy, it seemed for a couple of years after his appointment as Minister for Finance that Charlie McCreevy would be an exception to this misguided pro-cyclical budgetary pattern.
During the boom years from 1997 to 1999 the national accounts showed public spending rising only by a modest 5 per cent a year, with central and local government savings (i.e., the Budget surplus) quadrupling from less than £1 billion to almost £4 billion.
However, the Budget accounts show that in the following year, 2000, spending rose by almost 12 per cent, and last year it jumped by a further 16 per cent. Given that the Taoiseach had made it clear that he intended his Government to last the full five-year term, the trebling of the rate of growth of public spending in this second two-year period, starting 2½ years before an election was due, is difficult to understand even in political terms.
In economic terms it was, of course, sheer lunacy. The last two years of the Celtic Tiger was a period, not alone of extraordinarily rapid economic growth, but of the achievement of that most elusive economic goal, full employment. As a result of the huge spending increases Charlie McCreevy presided over during this boom period, the substantial Budget surplus was wiped out, leaving no financial leeway to promote economic activity during the recession that began during 2001.
So, instead of being able to increase public spending and/or cut taxes in 2003, we are now condemned to face spending cuts across the board, and perhaps also increases in taxation - all of which will deepen the recession, and impede economic recovery. The truth is that, looking back over the past 5½ years, we have seen three quite different Charlie McCreevys in action.
For the first couple of years there was a prudent, if rather right-wing, McCreevy, holding public spending down - possibly even below what would have been a socially desirable level - and cutting taxes while at the same time building up a surplus to draw upon in a future recession.
In 2000, came Charlie McCreevy the politician, preparing a full 2½ years in advance to win a general election by allowing spending to run completely out of control in what were the closing stages of a boom that had brought full employment in its wake.
By thus boosting economic activity at a time when there was no spare capacity in the economy, he created huge inflationary pressures which have increased our cost levels over 10 per cent above those of the rest of the EU, thus undermining the competitiveness of our economy and greatly increasing construction costs, to the point of halting our National Development Programme.
This was budgetary politicisation with a vengeance - on a scale and over a period that was without precedent and quite indefensible. Whilst the negative consequences of this pre-election splurge will certainly not be as damaging as the four-year long undermining of our economy by two Fianna Fáil governments between 1977 and 1981, the gross irresponsibility of what was done between 2000 and 2002 carries echoes of the events a quarter of a century earlier - of which Charlie McCreevy was then a severe critic within Fianna Fáil
The current economic debacle has now ushered in the reign of a third kind of Charlie McCreevy - McCreevy the accountant. We are required to co-operate in balancing the books rapidly, and because this new McCreevy does not believe in overt increases in income taxation, it has been reported that this may entail some hidden increases in the income tax burden.
But, whatever may happen the tax burden, we already know that this attempt to retrieve the damage done to our public finances in recent years will certainly involve cuts in spending that will prove extremely disruptive and socially damaging. We can already see that this current assault on our public services is going well beyond what is actually required by our budgetary situation.
For, if the leaks from the Minister's entourage are to be believed, he has set his mind against even a temporary pause in the process of building up future resources to cope with pension problems of the 2020s and 2030s, and he has also been reported as being against any serious review of his ill-judged, and very ill-timed, SSIA scheme. He is moreover said to be ideologically unwilling to borrow on any significant scale to finance the capital programme, which, against all economic advice, he has chosen to cut back.
For the sake of our longer-term future one must hope that in next week's Budget some of these capital cuts will be restored, and that the cuts actually imposed will be confined to the unnecessary and unwise topping up of the roads programme by a Cabinet sub-committee two years ago, to which I have referred in this column.