But I Regress

Income Tax rates by Country based on OECD 2005...
It's insane how low our direct taxes are

Incentives for property investment? There are times I want to go into government buildings with some sort of brain detector, see can I find anything. The reason why the property market is moribund is that property is still insanely overvalued. Urging people to invest in something overvalued is not only what got is into trouble in the first place, it’s surely a form of fraud.

Insanity is repeatedly doing the same thing while expecting a different outcome.

This budget is going to make me worse off. This is not what I object too though. What gets me is that it will make people who are better off less well off than it will make me. This is something to do with it being a “jobs budget”. They don’t want to create a disincentive for the poor to work by taxing the rich too much.

I think they do their economics by voodoo and shibboleth. They have raised money today by every means conceivable except raising income taxes, because raising income taxes is a Bad Thing. The result is that we have a highly regressive budget that hurts the poor far more than the well-off. Certainly it could be counterproductive to pile on excessive taxation. But is it not even more mad, in the midst of economic disaster, to have some of the lowest direct taxes in the developed world?

My mother, confused about why she’ll be able to afford less fuel this winter, asked me “So why can’t they tax the rich?”

I thought for a minute, and replied “Mainly, because they’re rich.”

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But I Regress

Income Tax rates by Country based on OECD 2005...
It's insane how low our direct taxes are

Incentives for property investment? There are times I want to go into government buildings with some sort of brain detector, see can I find anything. The reason why the property market is moribund is that property is still insanely overvalued. Urging people to invest in something overvalued is not only what got is into trouble in the first place, it’s surely a form of fraud.

Insanity is repeatedly doing the same thing while expecting a different outcome.

This budget is going to make me worse off. This is not what I object too though. What gets me is that it will make people who are better off less well off than it will make me. This is something to do with it being a “jobs budget”. They don’t want to create a disincentive for the poor to work by taxing the rich too much.

I think they do their economics by voodoo and shibboleth. They have raised money today by every means conceivable except raising income taxes, because raising income taxes is a Bad Thing. The result is that we have a highly regressive budget that hurts the poor far more than the well-off. Certainly it could be counterproductive to pile on excessive taxation. But is it not even more mad, in the midst of economic disaster, to have some of the lowest direct taxes in the developed world?

My mother, confused about why she’ll be able to afford less fuel this winter, asked me “So why can’t they tax the rich?”

I thought for a minute, and replied “Mainly, because they’re rich.”

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Address To The Nation

Enda Kenny making a speech in the Burlington H...
The Taoiseach, saying things. For some reason

The country stood by today as our leader Enda Kenny addressed the nation – only the sixth time in history that a Taoiseach has done such a thing. His speech left but one question on lips across the country.

What the hell was that for?

The speech contained much that would have been bad news, if it had been news. It was depressing, sure, but confusingly it did not contain the really awful tidings that would have justified its existence. So it’s pretty much as we expected.

No mention of any welfare rates being further cut, but no mention of them not being cut either. So expect that.

Direct taxes will not be raised, but indirect will. In other words, money will be extracted not just from those who have it, but rich and poor alike. Or as Enda put it:

“I wish I could tell you budget won’t impact on citizens in need, but it will.”

It seems the poor and sick aren’t actually going to be rounded up and shot though. Presumably they’re dying off at a rate sufficient to give markets confidence in our government’s international-finance-friendly ruthlessness.

The highlight I think was when he told us that the economic collapse was not our fault, even if we were all going to have to pay for it. Nice of him to mention that I suppose. We did know though.

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German Oversight

Reichstag building seen from the west, before ...
Head Office

Whatever the exact mechanism, it seems beyond dispute that the German parliament knew details of our budget before ours did. It may not have been the whole budget of course, but it still doesn’t look good.

Particularly in this context. What Merkel has proposed for the Eurozone is EU oversight of members’ budgets. Critics will say that that amounts to German oversight. So this is embarrassing even more for Germany than it is for Ireland.

Fifteen Billion What!?

Fifteen billion. Fifteen frigging billion¹. Where the hell are we supposed to find that, between the couch cushions? We’re already putting lives at risk, we’ve mortgaged the next decade, our banks are owed billions they’ll never recover. How can we spare that kind of money?

The blunt answer is we cannot. It’s pious fiction, intended not so much for domestic as international consumption. We’re beholden now to the bond market for the cash we need just to keep things running, so they’re the real audience for everything government says. We need to get that good review in Standard & Poor’s, the Michelin Guide of money. You have to remember here that the bond market is a market – what’s more, a seller’s market right now. There are a hell of a lot of countries desperate for loans and we’re competing with them for the limited cash available. So essentially a declaration like this is advertising, a way to say “Look, we’re a good bet! See how unspeakably ruthless we can be to our own people!” Rival money-buyers like Britain say they’ll make cuts of £81 billion, we double that. It’s competitive cruelty.

Yes; in per capita terms we’re losing twice as much as UK citizens – in this round of cuts alone. So don’t let anyone (in Fianna Fáil) tell you that we’re just like any other country in this world recession.

But will advertising alone be enough to convince the markets? I doubt it. Understandably, political pronouncements have little impact on market sentiment. What’s needed here is real, spectacular evidence – such as actually shutting down institutions of education and of health. That way investors know government is not squandering money on inessential fripperies like people, but is concentrating on the main business: being a cash cow for the money-owners of this world. So the sooner we have bodies on the streets the better frankly. If anyone feels like volunteering – and I think many must these days – that would be very patriotic.

Or we could try out Senator Donie “It’s not easy on €65,000” Cassidy’s idea. What he wants RTÉ to do is talk things up, stop dwelling on the negative side of the fact that greed and mismanagement have cost us another €15 billion. As there clearly is no actual positive side to this, what he obviously means is that we should invent one. Tell the world that tractor production is rising, that the four-year plan is bearing fruits for the people and all is well in the best-run of all possible countries, that sort of thing. Oppression, I think it’s called. God bless him for trying, but somehow I doubt it’ll fool global investors.

I have a third idea. It may sound a little bit crazy, but if you think about it I believe you’ll see that it just might work. If we really want to convince international markets that the economy is being run in a sensible and competent way, shouldn’t we get rid of the incompetent idiots who are running it?

  1. The amount the government says we need to cut from the budget.