Tuesday, May 25, 2010

Economics 25/05/2010: Here's one for the Budget 2011

Just a chart - from IMF Fiscal Stability report:
Now, as noted - this excludes housing, medical cards, child supports etc. Given that in Austria, Belgium and Denmark rental values are lower, while healthcare is universal for all, where does it put the combined value of long term unemployment benefits in Ireland compared to these two countries? And given our wage deflation since 2008, relative to Austria, Belgium and Denmark?..

Of course, we simply have to omit the petro-dollars fueled economy like Norway from consideration. Notice - this chart reflects comparatives for 2008 data for long term unemployed. Cutting unemployment benefits is a hard target. We will have to face that choice, however. Given this, my view would be to impose more significant cuts on longer term recipients, and lower cuts on short term recipients. This should create stronger incentives to seek employment and skills for those who have the lowest propensity to do so - the long-term unemployed.
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