Thursday, January 22, 2009

Living in the world of delirium

Irish Times today reports that "the Cabinet will today continue its discussions on ways to achieve a €2 billion reduction in costs."

Take a step back:

National deficit for 2009 is projected by the Department of Finance to reach 10.5% of GDP in 2009 before any adjustments (i.e Bord Snip cuts and Mr Lenihan's 'patriotism' tokens from July) are taken. That is, assuming a 4% drop in GDP in 2008 levels, a cool €18.9bn. Now, add €5bn in April bonds redemption due and the cost of banks recapitalization, as estimated by the Government - we are potentially €33.9bn in a hole. From there on, its anyone's guess what the cost of operating the nationalized bank(s) and other ancillary spend items might be, but let's be 'patriotic' and stop at that €33.9bn figure.

The Government is now 'working hard' to get €2bn through the door - the same €2bn that Lenihan demanded in savings for 2009 back in July 2008! Six months later, he is still at it.

In other words, and here the Irish Times is naturally silent, this Government cannot get even a lousy €2bn in savings out of ca €34bn that it will need! And they have audacity to talk about 'national sacrifices'?

Forget Sean Fitzpatrick's loans, forget incompetent bankers who could not get risk/return relationships right in their lending decisions - the real scandal is the fact that this Government is playing us all for their willing milking cows. There is no national recovery plan! There is no willingness to take tough decisions! Hell, there is not even a realisation of the true extent of the problems we face! There is an incompetent, cronyist Government-by-appeasement that is clearly banking on borrowing and taxing its way through the recession to avoid angering its main constituency - the public sector unions.

And now, run through the Irish Times again (here):

No one on the Times team connected the dots from the gutless, incompetent governance to the economically illiterate and morally insulting Budget 2009 to the news that Superquinn will axe 400 jobs and shut its store in Dundalk. And yet this connection is there for anyone to see.

In 2002-2007, the current FF Government (for there is no real change save for Charlie McCreevy's and Bertie's departures) squandered away billions of our money to pay off its own constituencies. All of this waste has gone up to fuel business costs increases across the country that left Ireland in a position of being completely uncompetitive relative to our, already uncompetitive, neighbour - the NI. Mr Cowen presided over this gratuitous mismanagement of public finances as the Minister of the Exchequer. Mr Lenihan was on the sidelines of economic policymaking, but he did not seemed to have minded what was going on around him. Ms Coughlan was at the coalface of the FF-led welfare banquet as a minister for agriculture, although she was wasting billions of European taxpayers money there.

The same Trio has passed the Budget 2009 income tax levies and has raised VAT – wiping out thousands of jobs in this economy. The same Trio is now presiding over a charade process that is supposed to bring the state budget under control and resuscitate economy.

The end game? We will end up being forced to accept worthless 'National Recovery Bonds' in a way of pay, as our taxes will rise to 25% & 50% range by Q3 2009, our savings wiped out to pay the army of inefficient and over-paid state workers.

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