The state can well afford to invest in the future of our society

Analysis: The government is not broke, and there is no fiscal catastrophe waiting to happen. It is a question of choices

11th October, 2020
The state can well afford to invest in the future of our society
Much of the daily political commentary presents the Irish state as being in dire fiscal straits. Looking at the data, nothing could be further from the truth.

Paschal Donohoe will announce the government’s budget on Tuesday under rather favourable conditions. The reasons for this are twofold. First, the government can borrow at historically low interest rates. There is simply no borrowing or financing constraint.

Second, notwithstanding the public health crisis, the tax take has exceeded expectations, and revenue has remained stable. This means less borrowing is needed to cover the deficit.

These two favourable conditions need to be made much...

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