Yet Osborne and the Tories have tried to pin the responsibility for the UK deficit entirely on Gordon Brown’s spending,
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http://www.bokai.it/cpg1.2.1_standal...e.php?pos=-135, rather than an out-of-control private sector. It is certainly true that Brown, foolishly, ran a deficit at the top of the boom, but the primary reason for the explosion in public borrowing has been a drastic fall in tax revenues.
Osborne’s approval of Irish policy in the bust is worrying. But his enduring enthusiasm for Irish policy during the boom is possibly more disturbing still.
He still seems to believe that Ireland’s attempts to turn itself into a tax haven with its 12.5 rate for foreign businesses was a success, judging by his Budget which will progressively cut the UK corporation tax rate. It was all those foreign profits processed through the Irish exchequer that helped to give the Irish public finances such a misleading look of stability in the boom (see Simon Johnson and Peter Boone here).
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Today my colleague Johann Hari referred to George Osborne’s trip to Ireland in 2006 and an article he penned for The Times exhorting us to ”Look and learn from across the Irish Sea”.
What is more, Osborne has shown no signs of recognising the similarities between what happened in Ireland and what happened in Britain in the past decade. Britain, like Ireland, was reliant on revenues from a banking and property bubble. That is why our respective deficits in recent years have been of the same, sobering,
http://ptpress.comunicamos.org/pg/fi...such-a-silence,
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Johann uses it to support his argument that Osborne is wrong to follow the Irish policy of austerity. I think this is a bit off target. The Times piece has nothing to say on deficit cutting. In fact,
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What is most telling about the article is that George Osborne was oblivious to the fact that Ireland was a bubble economy. Its public finances were built on the flimsiest of foundations, as revealed when the recession broke,
Christian Louboutin Platforms sale, the banks went bust and tax revenues fell through the floor. You might say that many others made the same mistake about Ireland. Fair enough. But has Osborne recognised his error and learned from it? Not in the slightest.
Consider this: “In Britain, the Left have us stuck debating a false choice. They suggest you have to choose between lower taxes and public services. Yet in Ireland they have doubled spending on public services in the past decade while reducing taxes and shrinking the State’s share of national income. So not only does Ireland now have lower business and income taxes than the UK, there are also twice as many hospital beds per head of population.”
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