‘There are different ways to measure debt – as a percentage of GDP, GNP, etc. But let’s measure it as a burden on people – for its people who pay off debt. When we look at debt per capita this is what we find: [see graphic]
Ireland is at the top [€40.000], head and shoulders above all other countries – in particular, Italy, Greece and Portugal which the Fiscal Council refers to as countries with a higher debt when measured as a percentage of GDP. Why the difference?
Taft continues: ‘Many might conclude that our debt is not sustainable. In a rational world that might be true. But this is Ireland. Sustainability is not just an economic concept; it is a political one as well. If people believe, however reluctantly, that there is no alternative but to repay ‘our’ debts (‘our’ includes the debts of insolvent and non-existent businesses), then it will be ‘sustainable’. We will tax ourselves beyond levels which the economy and households can afford. We will suffer spending cuts – both nominal and real (i.e. after inflation) – beyond any levels contemplated in Europe. We will force the economy to become the handmaiden of debt-repayment. It can be done – provided you are willing to suffer high levels of unemployment and deprivation, maintain the investment crisis, and drive wages and incomes downward.
Unfortunately, there is a political regime here in Ireland that wants to prove there is no debt that cannot be repaid even if have to wreck livelihoods and life-chances.
And people will be left to scramble for a life-raft, a buoy, a piece of driftwood – anything that will keep them afloat in the sea of debt. But most of all, they had better learn to swim.’