William Slattery of the financial services company State Street, and a member of the McCarthy Committee, has offered some advice to the nation in its time of need. With unemployment climbing ever higher, with 250,000 jobs already shed since the start of the recession, he proposes that the largest employer in the state slash a further 30,000 jobs. Wow.
Of all the fiscal measures that could be taken by the Government – as measured by the ESRI (income tax, property tax, carbon tax, public sector wage cuts, capital spending cuts) – cutting public sector employment is the worst. Using the ESRI findings we can measure what we might expect from William Slattery’s proposal:
All those numbers going south – what does it mean?
William Slattery wants to collapse the domestic economy by over €3 billion – prolonging the recession for at least another year and possible two.
William Slattery wants to put more than 40,000 people on the dole queues – and it could be higher if we can’t kick more people out of the country through emigration.
William Slattery wants to drive more businesses out of business by cutting consumer spending up to €1.7 billion.
But wait a minute – William says we’ll save €2 billion. Is that true? Not even close. The annual deficit will fall by -0.2 of GDP – or about €330 million. Why so little? Because after you factor in the rise in unemployment costs, the loss in tax revenue (income tax, PRSI, VAT from reduced spending), lower businesses taxes from the loss of turnover – the actual savings is peanuts.
No doubt William hasn’t thought this through. You cut your total national income by over €3 billion to get a savings of €300 million – if a CEO of a multi-national firm tried to do that with their business, they’d be clearing their desk before noon.
It doesn’t bother me that William Slattery makes such an ill-informed proposal. After all, there are people who deny climate change, evolution, and the moon landing; heck, there are people who think the radio makes noise because there are tiny little people inside it. The world is a wide world – there will always be a William Slattery around to amuse and irritate (Eamon Blaney proposes that 100,000 public sector workers be laid off but he was writing in the Sunday Independent, a publication that only exists to facilitate one of the best regular weekly on-line competitions over at Cedar Lounge Revolution).
No, what would bother me is if people mistook this proposal as a serious contribution based on an informed understanding of how the real world works.
This is a proposal written in crayon on the back of a discarded snickers wrapper in the middle of a kindergarten playground.
Pity the nation that takes its William Slatterys seriously.