Scarce resources mean the squandering must stop

ONE could be forgiven for thinking that the sky has fallen in on the economy, and indeed one would be correct in thinking that.

Eleven months ago Brian Lenihan told us that we had turned the corner and that Budget 2010 would be the harshest in this particular bout of fiscal adjustment. We turned a corner alright, but it is a corner that has taken us back to where we started out, albeit a couple of levels lower. Budget 2010 will come to be viewed as a total pussycat, compared to what Budget 2011 and 2012 will be like.

The people of Ireland now face the prospect of €15 billion being taken out of an economy that is in the middle and not the end of a deep recession. This figure is equivalent to roughly 10% of anticipated gross domestic product in 2010.