Exiting the bailout and a wish list for the orthodoxy… December 17, 2013Posted by WorldbyStorm in Economy, Irish Politics, The Left.
Some may be under the illusion that all is well. ‘We’ have ‘exited’ the bailout, things are improving, growth is assured and so on.
And yet the demands of and from the private sector continue. Take this from Conall Mac Coille chief economist with Davy, in a piece in the Irish Times today which asserts that:
…progress on structural spending reform has been far more problematic.
The Department of Health is set to exceed its spending limits for a second year running. Efficiency savings envisaged have not been realised, necessitating an additional round of pay cuts under the Haddington Road agreement.
And check this out.
Finally, IMF proposals to target social spending at vulnerable groups have not materialised, with blunderbuss universal payments such as child benefit maintained.
It’s just internalised that universal payments are somehow inefficient, even wrong. It’s taken as read. Actually, it’s not just internalised, Mac Coille writes:
Ireland’s marginal income tax rates are exceptionally high, but are rarely portrayed as the inevitable consequence of a costly, inefficient public health service and bloated universal benefits.
Not a word on how universal benefits might be precisely the way to reach the largest spread of population, because their purpose is secondary in this analysis.
And look at what is sought:
But the absence of bond market vigilantes has limited the pressure to address structural spending problems.
And spending is a problem because…
…for now, substantive income tax cuts to help a broad swathe of Irish households join in the recovery still seem a distant prospect.
There you go. Substantive tax cuts are the way to a recovery. But… we can’t do that until we cut expenditure. And never mind about those who might need to access that ‘inefficient public health service’ and/or use those ‘bloated universal benefits’.
I hardly need mention how overtly political this is. Because none of these positions – which are founded on very specific political and ideological views of the economy and state and issue of state provision – are beyond question. None of them are self-evident truths. Once, before it went AWOL, social democracy would have countered them. Those counter-critiques still exist. But, now, in this state, it is an open question as to who will provide any sort of political resistance.