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Economic Recovery
Deflation or expansion
 Cutting public expenditure and investment
 Cutting wages
 Imposing increased taxes on low-average
 income groups
 Cutting consumption
The Imperative to Expand

We need a stimulus programme – a ‘smart
 stimulus’ to do a number of things:

 Rescue our banking sector
 Address our infrastructural deficiencies
 Maintain wages, income and consumer
 spending
 Retool our indigenous enterprise base
Mobilising the Resources

 Low overall debt and access to Central Bank
 and Pension Reserve Funds
 Wealthy asset base
 Public Expenditure Reform
 Exploiting accumulated and current savings
First: Rescue our Banks

 Bring the Irish banking sector into public
 ownership
 Use either ‘good’ bank or ‘bad’ bank
 proposals to purge the system of toxic assets
 Redesign the banking architecture according
 to economic need
 Recapitalise through the Pension Reserve
 Fund
Second: Address Physical Infrastructure
Defects

 Physical infrastructure – Ireland ranks 64th in
 the world

 Road, Rails, Telecommunications, Electricity
 National Spatial Strategy
 New Green Deal
 Urban Regeneration
Second: Address Social Infrastructure
Defects

 European only in name

 Education (No Child Left Behind)
 Primary Health Care in the Community
 Pension Guarantees
Third: Wages, Income, Spending

 A wage deal fit for purpose (flat-rate, local
 bargaining)
 Improve social welfare incomes (pay-related)
 Consumer Vouchers
 Targeted VAT reductions
Fourth: Saving Jobs, Retooling
Enterprises
  Redundancy Avoidance Schemes (short-time,
  career breaks)
  Solidarity Pact – democratic partnerships at firm and
  sectoral level

Employers: guaranteed credit, sterling stabilisation
 fund, access to equity
Employees: right to collective bargaining, family-
 friendly work practices, participation in decision-
 making
Fourth: Saving Jobs, Retooling
Enterprises

 Rescue firms through public equity, public-
 private partnership, public enterprises
 Key to maintaining our export sector base
 Key to upgrading in anticipation of eventual
 international recovery
Conclusion

 Recessions are marked by lack of money and
 activity
 Taking money out, depressing activity is the
 wrong way to address collapse
 Inject money, investment, jobs, activity into
 the economy – in those areas and activities
 that you will need once the recession is over

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Michael Taft 4 March 09

  • 1. Economic Recovery Deflation or expansion Cutting public expenditure and investment Cutting wages Imposing increased taxes on low-average income groups Cutting consumption
  • 2. The Imperative to Expand We need a stimulus programme – a ‘smart stimulus’ to do a number of things: Rescue our banking sector Address our infrastructural deficiencies Maintain wages, income and consumer spending Retool our indigenous enterprise base
  • 3. Mobilising the Resources Low overall debt and access to Central Bank and Pension Reserve Funds Wealthy asset base Public Expenditure Reform Exploiting accumulated and current savings
  • 4. First: Rescue our Banks Bring the Irish banking sector into public ownership Use either ‘good’ bank or ‘bad’ bank proposals to purge the system of toxic assets Redesign the banking architecture according to economic need Recapitalise through the Pension Reserve Fund
  • 5. Second: Address Physical Infrastructure Defects Physical infrastructure – Ireland ranks 64th in the world Road, Rails, Telecommunications, Electricity National Spatial Strategy New Green Deal Urban Regeneration
  • 6. Second: Address Social Infrastructure Defects European only in name Education (No Child Left Behind) Primary Health Care in the Community Pension Guarantees
  • 7. Third: Wages, Income, Spending A wage deal fit for purpose (flat-rate, local bargaining) Improve social welfare incomes (pay-related) Consumer Vouchers Targeted VAT reductions
  • 8. Fourth: Saving Jobs, Retooling Enterprises Redundancy Avoidance Schemes (short-time, career breaks) Solidarity Pact – democratic partnerships at firm and sectoral level Employers: guaranteed credit, sterling stabilisation fund, access to equity Employees: right to collective bargaining, family- friendly work practices, participation in decision- making
  • 9. Fourth: Saving Jobs, Retooling Enterprises Rescue firms through public equity, public- private partnership, public enterprises Key to maintaining our export sector base Key to upgrading in anticipation of eventual international recovery
  • 10. Conclusion Recessions are marked by lack of money and activity Taking money out, depressing activity is the wrong way to address collapse Inject money, investment, jobs, activity into the economy – in those areas and activities that you will need once the recession is over