Tuesday, December 6, 2011

Time to burst the austerity bubble

Meanwhile, Philip Lane is quoted in The Telegraph as saying "every [Irish] government for the next 20 years will have to keep cutting". As it is, we know the next two budgets will contain even more severe cuts than those being imposed right now. This is just what the government and "troika" have publicly admitted. What happens when the anticipated recovery (i.e. growth) doesn't materialize? More austerity?
It's time we all realized that the path we're on is unsustainable. Just as the boom was unsustainable - and on some level we all knew this, but allowed our instincts to be over-ridden by reassuring talk of "economic fundamentals" and "soft landings". The logic is simple and clear - this programme of austerity will not work. I think most people intuitively understand that. But we are allowing ourselves to be mollified by talk of restoring confidence, of "growing" exports and jobs. Just where are we going to export to, with the eurozone - and possibly the global economy - facing a sharp recession next year? Who is going to create jobs as domestic consumer demand continues to fall? The only thing we are growing right now is a generation of young people for export.

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