Sir, – While reckless lending and borrowing were indeed part of the problem, a far greater part was the over-dependence of government on tax income from property and new cars, almost all of which was in fact borrowed by the person paying it, with 100 per cent mortgages and loans for new cars. When these unsustainable sources dried up, the government borrowed to pay public salaries and pensions. Public salaries increased at a breathtaking rate between 2000 and 2008. The numbers who left the public service for the most part got retirement offers, so their costs remained on the public expenditure account, albeit at a somewhat reduced cost.
The increase in government borrowing to fund public spending was a multiple of what the banks cost. And we’re still borrowing! – Yours, etc,
VINCENT MURPHY,
Cork.