Madam, - In two previous letters to this page (September 19th and November 24th, 2007) I highlighted concerns about the Government wasting the fruits of the economic boom. I also raised particular concerns about the amount of money wasted on quasi-autonomous non-government organisations (quangos).
In light of the ESRI's report on the economy and the acknowledgment that we are now in the grips of a recession, perhaps it is time for the Government to address this black hole in the State's finances.
From any clinical analysis of the economy it is clear that revenue receipts are down, unemployment is up, consumer confidence is down and inflation is up; but nowhere have I read about the dreaded prospect of the Government having to raise taxation to cover the costs not just of the national development plan, but also current expenditure.
Given that the Government is precluded from borrowing more than 3 per cent of GDP by virtue of our membership of the euro, I can see no alternative to higher taxes unless the Government makes dramatic cuts in public sector expenditure (however unlikely). A rise in taxation would be a disaster for the economy (though an easy way out for a Government incapable of taking on the public sector), stretching the ordinary taxpayers to breaking point as they grapple with the knock-on effects of recession.
If the current administration is serious about returning the economy to health over the next two years, it must exercise a degree of economic prudence not seen since the late 1980s.
It is relatively easy to run a government when times are good; recessions sort the men from the boys. - Yours, etc,
NIALL NELIGAN,
Carysfort Park,
Blackrock,
Co Dublin.
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Madam, - The rapid change in the fortunes of the Irish economy should be no surprise. The overpricing and unchecked speculation within the housing sector has been well flagged for some time. Almost 12 months ago to the day, an article in your paper mentioned research carried out by Prof Morgan Kelly of UCD, which warned of a severe correction in house prices.
Historically, one would be hard-pressed to find a housing boom anywhere in the world which has not ended in bust, usually dramatically. The outcome in Ireland, namely a collapse in the construction sector, was entirely predictable, as are the knock-on effects of rising unemployment and a contracting economy.
The problem is further compounded by high commodity prices - in particular food and energy - on international markets and also the economic difficulties experienced by our two major trading partners, Britain and the United States.
Indeed, I find the latest quarterly review by the ESRI unbelievably optimistic when it predicts a slight economic upturn during 2009.
The saddest thing about this recession is not that it will be long and hard - by far the most likely scenario - but that the party that has been in government in Ireland through the boom years of the Celtic Tiger cynically squandered a valuable nest-egg for the future on tax hand-outs aimed at prolonging its own sorry reign in power.
What does Ireland have to show for the Tiger years? A lot of overpriced houses, some half-finished motorways that will never be needed, and an abysmal health service.
The only consolation will be in watching the verbal gymnastics performed by Cowen and his Ministers as they attempt to explain what went wrong to an electorate who may be beginning to realise this particular party is over. - Yours, etc,
ANDY WILSON,
Corrig,
Westport,
Co Mayo.