George Lee’s rejected policies

// February 21st, 2010 // Uncategorized

According to the Sindo last weekend the policies that George Lee was advocating, I’m quoting from the article below and adding my comments under the DKS

“Here, for the first time, are his policies, which Fine Gael didn’t want to know about.

• Mr Lee said the Government plan to reduce debt by 2014 would crucify the economy, and we should ignore our deficit in the short term.

DKS – I’m not sure that we can ignore the deficit as such while it is in double digits, we could however prioritise reducing the deficit by means of increasing the size of the economy and the tax take instead of cutting public spending across the board and increasing tax rates. But that’s isn’t what George says here, in fact he doesn’t advocate any policy at all more that we simply ignore a potential consequence of our situation in considering what policy to adopt. That is considerably different to advocating a policy as such. Is he saying we should ramp up or maintain public spending levels or reduce tax rates or what? If this is what he thinks a policy is that God help us lacking in professional economic training.

• We should take the fight to Europe and claw back our economic-control instruments — which include our own currency, the deficit, the ability to print our own money and setting our own interest rates.

DKS – Leave the Euro? Is he quite mad? The biggest long term negative to this is that it would hurt our integration with the single market, couple with that the fact that our debts would remain in Euros and thus would be even bigger after any devaluation of the new currency that might give us some extra competitiveness. It is also worth noting that we’re not a producer nation in the sense of working with our own natural resources so much of our work in involves importing re-working and adding value and then exporting again. Leaving the Euro the cost of those import components would increase too.

• We should cut corporation tax to raise more money.

DKS – Err..if business are not profitable or their profits are down the cutting the rate will lead to a lower tax take. It would only be if new existing business were moved to Ireland (which is already happening) or were created that we would see a tax take increase. In the former case, I’m not sure that a further reduction would be the final compelling reason to move for many companies that have considered it but not acted as yet. As for the latter, it would be quite a while before any new businesses would final tax returns

• We should introduce a stimulus package to help create jobs.”

DKS -I’m pretty sure that FG had proposed a stimulus package as part of the NewERA policy document presented by Simon Coveney.

*I’m out of circulation for a few days and the country decides to fall apart without me.