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Thursday, November 11, 2010

For what died the sons of Róisín

For the Government the game is up. Those who lend us the money are sending the Government a resounding message – your four year strategy of cuts will not work. Quite simply they are not buying what the Government is selling. And who would blame them. The Government is promising a four year programme of austerity measures and cuts that will contract the economy. Our public finances are massively skewed towards spending, our economy is collapsing under the weight of bad policies and investors see Ireland as a busted flush.

We need to change course and fast. We need to send a signal to International investors that we can grow our economy. We need to stand up to Europe and not allow Ireland become a sacrificial lamb at the alter of the Euro. We also need to cut a deal with the bondholders. We need a consensus for recovery that is based on investment and growth and not slash and burn. We need to convince the lenders that we will grow and not cut our way out of this mess.

I advocate that we take the following steps.

(1) We start telling the truth about the deficit. It cannot be cut to the stability and growth pact levels by 2014. It simply will not happen. Investors know this. So let’s start telling the truth. It can be done by 2016 but only if we have a plan to grow the economy.

(2) We abandon plans to reduce the deficit by cuts alone. This is self defeating and will fail. If cuts are the solution we would have recovered by now. We need to raise revenue by increasing taxes on those who can afford to pay more and achieving savings in public spending through eliminating waste.

(3) We stimulate the economy. We need to have a stimulus plan running concurrently with a more realistic deficit reduction strategy. An economic and financial stimulus will create jobs, provide good value for money and position the economy to recover. International investors are more likely to respond to a growth based strategy.

(4) We need to cut a deal with the bondholders. The crisis in our banks has not gone away. They will most likely come back looking for more cash. Our immediate priority should be to cut a deal with the bondholders. These are people who took a risk. They, along with the banks and developers took a gamble and lost. Investors are not stupid. They know cutting a deal is smart. Trying to pretend you can pay when you cannot will not fool them. Let’s cut a deal and emerge with some integrity and ability to borrow again.

The country is at a cross road. We need to wrestle it back from the people who have sold us down the river. I am reminded of that famous Luke Kelly ballad ‘For what died the sons of Róisín’. It is worth reciting as we ponder a better way forward..

To whom do we owe our allegiance today?
To those brave men who fought and died that Róisín live again with pride?
Her sons at home to work and sing,
Her youth to dance and make her valleys ring,
Or the faceless men who for Mark and Dollar,
Betray her to the highest bidder,
To whom do we owe our allegiance today?

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