How much will a Billion euro cost me?
The general election campaign is now fully underway, manifestos are almost ready for publication, and we can see the emergence of auction politics after just one week of campaigning. When numbers get larger than one million, their magnitude is hard to discern. When they get larger than one billion, we can’t grasp the fact it is a thousand times bigger again. With promises of billions of euro being made on the income and the expenditure side, it is important to understand the individual impact of one billion euro at the level of the citizen. Taking the current population of approximately 4.8m, €1bn equates to €208 for every man, woman and child in Ireland. However, less than half that number are income earners. The Revenue statistics (2017) show 2.5m income earners. Divided among them, €1bn equates to €400 per head. However, of the 2.5m income earners in 2017, just under 900,000 paid no tax. Netting these people out, (as they will not fall into the tax net to cover fresh spending), we are left with 1.6m taxpayers. The net liability to them of €1bn is €625, each. Remember when a minority of citizens thought €260 was too much to pay for a household water charge?
Of course, we don’t have to raise taxes to raise spending by €1bn. We can borrow it. Our current national debt is approximately €205bn. This equates to just under €43,000 per head (or €128,000 per taxpayer), and places us fourth in the world in terms of per capita debt, behind Japan, Singapore, and the USA. Crucially for Ireland though, and unlike the three more indebted countries above us, our debt is denominated in a hard currency over which we have no monetary control. We cannot deflate our way out of trouble.
If we borrow more money, we are simply transferring wealth from our children to ourselves. Do we have the courage to tell our children that? ISME suggests, as the prospective members of the 33rd Dáil knock on doors, that you ask them how they propose to fund each extra billion (or more) they plan to spend.