Thursday, September 3, 2009

Ireland's mini stimulus plan this summer

A letter today in the Irish highlights the vast difference between the US Government and the Irish Government responses to the recession.

The Irish Government has, like Hoover after the 1929 Wall Street Crash, tried to cut back spending and attempt to balance the books. We all know how well that turned out. The US Government has thrown money at the problem, and part of that is funneled into many public works programs. For example, the rebuilding of the public housing buildings here in Roslindale (at Beech Street) is funded by the Federal Govt stimulus plan. This provides work to builders, carpenters, electricians - who then pay taxes on that money and spend much of it locally.

In many ways Ireland is like a US state, without the freedom to run a big deficit. But the US government itself, of course, can run up a gigantic deficit, as it is doing.

But what if the Irish government had a stimulus plan?

Here is the letter, from the Irish Times letters page:

Madam, – I am the chairman of a medium-sized enterprise involved to a large extent in the construction industry, but with clients from all sectors of the Irish economy. In our last financial year we had around €6 million turnover, this year it looks like we will have around half that, largely based on being busier in the earlier part of the year. In other words, things are getting worse.

In July, things suddenly got better in terms of orders and inquiries. Why? The summer school works programme! thankfully we got a good bit of work from it. There was a lot of pressure to complete work before the schools reopened, but that’s a problem we love to live with.

Now we are in September and things are looking gloomier than before.

There are few new works, local authorities have no money and Joe public is holding on to his. As a result, we and many like us will lose money and lay off people, with additional cost to the exchequer and personal suffering.

All the Government attention is focused on Nama and presumably the Budget, which I don’t believe will do a thing to preserve jobs in the short term, and as we know, in the long term we are all dead.

So I checked how much our personal mini-boom in July cost. Google yielded a press release from Batt O’Keeffe stating €80 million provided works in 1,180 schools. Thank you, Minister you kept a good bit of the remaining architectural and building industry going for four to six weeks. In return the State got much-needed work done and it got Vat, PAYE, and PRSI rather than paying dole. I think that is called win, win.

Why are we not developing a programme of labour-intensive highly focused local works schemes to employ small and large builders, carpenters, bricklayers, electricians and maybe even a fencing contractor or two. Twelve- months duplication of the summer works programme would cost less than €1 billion, less than 4 per cent of the Department of Social welfare budget.

How I wish I believed these sort of ideas were buzzing around our politicians’ and civil servants’ brains, but unfortunately I don’t think the small issues are getting any attention. Will someone please come up with a few ideas to stop the haemorrhage of jobs in this economy. – Yours, etc,



Irish Fencing Railings Ltd,

Kylemore Park South,

Dublin 10.

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