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Harsh lessons, no blarney can be found in Ireland

Jack Markowitz
By Jack Markowitz
3 Min Read July 19, 2009 | 17 years Ago
| Sunday, July 19, 2009 12:00 a.m.

Nobody of sound mind would tell Pennsylvania’s state legislators to go off on overseas junkets just now.

Yet, to find the wisdom of foreign lands in the public interest must be so tempting at this vacation season.

For example, how to pass a budget by a June 30 constitutional deadline that seems impossible to meet anymore. It’s too hard. They try, they just can’t.

Still, if leaders of both parties were to fly away in search of budget guidance, they couldn’t do better than Ireland.

You think Pennsylvania’s got trouble• Ireland’s got trouble. And its citizenry is being advised just what the government means to do about it, too.

Cut. Cut spending. Cut deeper than ever before. Deeper than conventional politics ever imagines possible.

Cut 17,300 public jobs, for instance. And at least one entire government ministry (does the state education department come to mind?). Billions in welfare spending, too. And all this as recommended in a report commissioned by the government itself, not a bunch of conservatives howling in the wilderness.

The projected savings: 5.3 billion euros, of $7.5 billion. That’s roughly three times the budget gap that has extended another June into July in Harrisburg.

Half of Ireland’s police stations might be shut down. Surplus public lands sold off. Not-so-useful government agencies merged or abolished. The savings from social welfare spending alone could hit $2.5 billion.

Imagine that, “entitlements.” Untouchable! But the country’s just got to say no, or at least not so much, according to the spending review published on the Irish Finance Ministry’s Web site, as reported by Bloomberg News.

“These are the choices that we as a people, and not just as public representatives and government, will have to face up to in order to get this nation back on track,” said Finance Minister Brian Lenihan.

After years of surprising industrial strength, Ireland became a turn of the century goods-producing star of Europe. But the recession has hit its factories and cities hard. Tax revenues sank way below government spending. So taxes have been raised (counter-productively) and some public employees have had to take cuts.

Still, the budget looks 20 billion euros out of balance, a virtual California across the Irish Sea. Bond markets can’t help but notice.

Irish paper has lost its recent high ratings. A 10-year bond early this year had to pay nearly three full percentage points above an equivalent German issue. The differential used to be just a quarter percent.

At this point, more tax hikes aren’t recommended, but new cuts in health and farm spending, yes, and fewer municipal authorities.

Labor unions have checked in with predictable criticism. More cuts to public workers’ wages (which might balance state budgets all over America) could lead to strikes, the government has been warned. But Ireland seems ready to face that. Pennsylvania should, too.


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