Unlike the dark days of decades ago, Ireland is in a strong position to recover from this economic downturn but we have it in our hands to blow it just as we have before.
On the plus side there is a confidence that we can make a mark on the world stage that is quite out of proportion to the size of our country. This is probably the single greatest difference in the Ireland of today's school-leavers compared to that faced by those of us who entered the workforce at any time up until the 1990s.
If we are to make a sustained recovery it is important we adhere to the commonsense principles that for the most part make up the basis of any sound economic policy.
I use a rough yardstick to look at any society's socio-economic policies. At one end you see those states which favour high taxation and high public spending. These have the capacity to provide a safety net for those unfortunate enough to be unable to forge their own way in the market place. They are strong on social cohesion, but, at the extreme end, they can be weak in distinguishing between those who are genuinely unable to help themselves and those who milk the system.
On the other end of the scale, there are those societies that favour low taxation, free choice and low public spending. They have a refreshing acceptance of market forces but the freedom espoused by extreme advocates also gives those in poverty little freedom but to remain poor.
In recent years, Ireland has sought a middle course as a pro-enterprise society that still afforded social protections, public health and education. But we have not done this through any coherent policy of making hard choices between tax and spending. Instead, we have been having our cake and eating it, lowering taxation while letting public spending spiral out of control, up more than 20 per cent this year. A favourable international climate, particularly a strong US economy, allowed us to break the basic rules . . . for a time.
This could never have been sustainable. In the run up to the Government's Estimates and Budget, I urge all in public debate - on whichever point on the tax/spend yardstick they may be - to at least have the honesty to put forward real choices.
I remain convinced that it would be utterly counter-productive for Ireland to slip back towards the high taxation days of the 1980s. Modest levels of income tax encourage enterprise and employment. Low corporation tax is a central plank of the Irish economic miracle. Listening to some commentators you might believe that low taxes on business and employers' PRSI are some sort of individual benefit for the management. They are not. They are benefits for the business . . . which includes every person who makes a living from that enterprise.
The challenge is to keep this wealth-producing machine that is the Irish economy humming while running improved social services on low taxation.
It is alarming to see headlines about the amount of money being sought for spending Departments. There appears to be very little parliamentary debate about the quality of spending.
For example, in the years 1980 to 1999, the number of medical, dental and nursing staff fell slightly from 33,700 to 32,500 but the number of clerical and administrative staff in the health service almost doubled - from 5,400 to 10,500. This is a trend which runs counter to the reality in the exposed sector of the economy.
Anybody with an ounce of wit who has ever run a household knows that excessive spending impoverishes. Nevertheless, there are some arguing for pay increases on the basis that these will have the beneficial effect of increasing consumer spending and so boost Irish jobs. This is self-deluding rubbish.
A disproportionately high amount of any pay increase is spent on imported goods. Common sense will tell you this but should you want measureable examples, just look at the pattern of car sales and foreign holidays. Throwing money into the economy in this way may have some marginal effect on somebody else's prosperity in another country but you sabotage your own.
Spending should be directed at projects that will increase our ability to earn in the future. We want a country where you can move between two cities without being stuck behind a tractor for 10 miles. We want a country with broadband capacity in geographically spread centres. We want a capital city in which you can exceed walking pace. This means relentless commitment to press ahead with well-targeted infrastructural investment, not wasteful day-to-day spending on unreformed public services.
It can be done . . . but as I said, we have the capacity to blow it.
Turlough O'Sullivan is director general of IBEC, the Irish Business and Employers Confederation