VIEWPOINT: Donegal Daily welcomes views of all shades. You can send yours to info@donegaldaily.com or leave a comment below. Today, Sean Ruddy on Government financial policy.
SEAN RUDDY WRITES: Is there a need to cut social spending to revive growth? There is no historical evidence to support it. From 1945 to 1990, per capita income in Europe grew considerably faster than in the US, despite its countries having welfare states on average a third larger than that of the US. Even after 1990, when European growth slowed down, countries like Sweden and Finland, with much larger welfare spending, grew faster than the US.
As for the belief that making life easier for the rich through tax cuts and deregulation is good for investment and growth, we need to remind ourselves that this was tried in many countries after 1980, with very poor results. Also, the world economy in the 19th century grew much more slowly than in the high-tax, high-regulation era of 1945-80, despite the fact that taxes were much lower n the 19th century (most countries didn’t even have income tax) and regulation was thinner on the ground.
The argument on hiring and firing is also not grounded in historical evidence. Unemployment rates in the major capitalist economies were between 0% (some years in Switzerland) and 4% from 1945-80, despite increasing labour market regulation. There were more jobless people during the 19th century, when there was effectively no regulation on hiring and firing.
So, if the whole history of capitalism, and not just the experiences of the last few years, results”. But the more likely explanation is that, by pushing these policies against all shows that the supposed remedies for today’s economic crisis are not going to work, what are our political and economic leaders doing? Perhaps they are insane. If we follow Albert Einstein’s definition of insanity as “doing the same thing over and over again, our leaders are really telling us that they want to preserve or even intensify,- in areas like welfare policy – the economic system that has served them so well in the past three decades.
For the rest of us, the time has come to choose whether we go along with that agenda or make these leaders change course.
Do we want a society where 50% of young people are kept out of work in order to bring the deficit down 3% in the next number of years? A society in which the rich have to be made richer to work harder at their supposed jobs of investing and creating wealth while the poor have to be made poorer in order to work harder? Where a tiny minority often called the 1% control a disproportionate, and increasing, share of everything, not just income and wealth but also political power and influence through control of the media, think tanks, and even academia.
Maybe we do, but these choices need to be made consciously, rather than by default. The time has come to choose the kind of society we want to live in and we as a nation have to become more pro-active. The days of talking about these issues on street corners are at an end. Let’s start walking the streets and tell our political elite insanity shouldn’t be government policy.
Sean Ruddy
Old Manse, Hillhead, Carndonagh, Co Donegal
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