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National debt rises €100,000 every five minutes

What is says in the papers

Yesterday’s Exchequer returns figures read like a triumph for the Irish economy, an economy that appears to defy the laws of gravity. Have a read of some of the breathless commentary.

  • The State collected more money in tax than it expected last year.”  – @RTENews
  • “Exchequer returns beat deficit target by €430m” – @IrishTimesBiz
  • “Tax take for 2016 €639m ahead of target” – @Independent_ie

Forecasts have been bad

Given the nature of a small open economy, would it be churlish of us to suggest that maybe the Department of Finance has rarely been good at forecasting tax takes, be that up or down? Beating your own forecast is not always that difficult if set low enough.  However, debt and not variable income, is the real enemy.

337 every second

Here on planet ISME the national debt clock keeps on ticking. At the time of writing the country owes well over €215bn – an incomprehensible number. That’s a 2 with eleven noughts after it. It’s vast. It continues to grow at €337 every second, or more than €100,000 every five minutes – every second of every hour of every day. And we don’t think the extra €3 billion the government borrowed on behalf the country yesterday is included in that figure yet.

100 years of ineptitude

Curiously when we mentioned the ISME take on the Exchequer returns to some journalists they appeared incredulous. We were asked by one senior journalist ‘Why isn’t anyone talking about this (the continuous rise in borrowings)?’. But ISME is, we retorted, and we have been and will continue to do so. But, the same journalist asked, what about the politicians. “Why aren’t any of them mentioning this?”, we were asked. As the lobby group for Irish SMEs we are non-political so we couldn’t possibly comment on nearly 100 years of political economic short-termism.

Drowning not waving

But something must give. The State continues to run on empty. We borrow to keep the Ship of State afloat. We haven’t enough hospital beds, nurses, homes or teachers but somehow the wages of those already in the pay of State looks like being boosted.

A rock and a hard place

ISME members live in a world where you make hard choices to get the best results. The State has two choices, raise taxes or cut spending so as to re-allocate sparse resources. More tax is not a viable option if we want to keep an entrepreneur, doctor, nurse or any other mobile profession in the country. Cutting spending means telling public sector unions that they can have functioning hospitals and homes for the homeless but they can’t have wage rises.

A new horror release?

The average reader should have read this blog in about three minutes. In that time the national debt has risen by a further €60,000. ISME hopes that ‘Payback Time’ won’t be brought on by the release of the horror movie – Troika II – the Re-Visit. Cutting borrowing is the only way of avoiding that nightmare.