Growing our way out of the trap

16/06/2009

This from Ray Kinsella in the Irish Times this morning:

"[...] We need to grow our way out of this trap. This means listening and responding to real businesses: removing constraints on them and incentivising them to maintain, or even increase, employment. The scale of the task can be seen from the figures above. We need to more than double the size of the economy to make ends meet based on our current spending trajectory. That is a measure of what it will take to return to sustainability and to relieve pressure on political, let alone, economic, stability.

Misconceived fiscal policies, conformed to a failed and humbled economic orthodoxy, are part of the problem. The last three budgets have bled the economy of domestic demand at a time when international trade and foreign direct investment are contracting. Equally, the costs of recapitalising financial institutions, whose business model and corporate modus operandi precipitated the crisis in the first place, is now equivalent to half of the costs of funding the health system."


Any comments?

Posted in: Fiscal policyEconomics

Tagged with: Political Economygrowth

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