ESRI calls for the deficit to be reduced to zero by 2014

[Brendan Burgess]

In the Quarterly Economic Report issued yesterday, the ESRI called for the Budget Deficit to be reduced to zero by 2014. The current 4 year plan is to reduce it to 5%(?) of GDP by then.

It's about time that people start focussing on this main issue. We have to live within our means and stop borrowing for day to day expenditure. It's better to cut up a maxed out credit card than to try to get a reduction in the interest rate being charged.

It doesn't seem to be on their [broken link removed]yet.

 

[mmclo]

Is the credit card analogy the best one? Maybe national debt is more like your mortgage (which you've just extended too far!).

Restructuring it in terms of number of years and the rate could make sense. Yes you would pay more over the entire term (a fact that govt simply need to admit and detractors need to accept) but you can put food on the table and pay your basic bills

 

[Chris]

I actually think that the credit card analogy is very good. The Irish state is borrowing to mainly fund day to day expenses not capital projects. If all the deficit was spent on tangible assets then you could argue that it would be more like a mortgage.

I agree with the ESRI that the budget should be balanced as quickly as possible, but I do not agree with their recommendation to do so by increasing taxation as well. And Brendan is also right it highlighting that this may finally focus attention on the budget which is as big a problem as the bank bail out.