Irish Government Naivety in 15 billion-euro ($21 billion) Spending Cuts

In a sign that Brian Cowen might have had one drink too many, the Irish government has announced swinging cuts to reduce Irelands deficit by 15 billion-euro ($21 billion) over the next four years. This by way of cuts in spending and tax increases. The government are reported to be looking to ever desparate measures in a bid to avoid the more logical solution to ease Ireland's economic woes - leaving the Euro.

Ireland’s budget shortfall in 2010 will be about 32 percent of GDP with around 20% of that resulting from the banking bail out. Recent reports in the media about abuse of Ireland's corporate tax regime (Google pays tax on just 1% of its non-US revenues through its Irish subsidiary) serve to underline that the Irish Government is focused on pleasing everyone except the Irish population. It is increasingly difficult to ignore the inability of the Irish Government to manage even basic aspects of the economy. The country clearly needs a new government - and one that reflects true business acumen.

Logic would suggest that the size of the civil service should be cut in half. Whilst it is a well known fact that it takes four council workers in Ireland to dig a hole - one digging and three supervising- the same applies to the broader civil service. The country could probably survive a 70% cut in numbers. However, rather than follow logic, the government are now reported to be considering using the country's 24 billion euro ($33 billion) state pension fund to buy Government bonds. The politics of desparation! To sustain such a move would likely require civil servant numbers to be maintained or even increased. SO the government would in effect be buying its own bonds. Such a move will worsen Ireland's credit rating resulting in increased borrowing costs - and prolong any possibility of economic recovery.

With such substantial cuts and tax increases on the way, emigration figures will surge hugely in coming years leaving a shrinking population to face the burden of an ever increasing debt.