Now that the country has a handle – just about – on the bank bailout, is it possible to work out how that that €50 billion will impact on our own personal budgets?
Unfortunately, this isn’t the only money we have to pay back. The national debt is now tipping €89 billion, up from just €38 billion in 2008.
Then there’s the on-going day-to-day budget deficit which is now “a mind-blowing 32 per cent of GDP” or €45bn, as one analyst described it last week.
He added: “Around the world, such deficits have historically only been run up in time of major war or devastating natural disaster.”
The fear now is that we may be unable to even pay the interest on all this debt, let alone pay off much of the principal over the next decade.
Despite Brian Lenihan’s frightening revelations last week, he didn’t elaborate about the €3bn-€4bn cuts and new taxes likely to be included in the December budget or the four year, on-going budget plan he has in mind.
Whether or not this Government survives long enough to see through a four-year-plan is highly questionable. However, we should still assume that the next crowd will also have their own brand of hairshirt for us to wear.
So how much out of pocket will be next year? That depends on whether the Government is either prepared or able to stand up to the many vested interests (quangos, trade unions, etc).
Successfully facing down such groups would save the taxpayer many billions, but at the end of the day they’ll probably target big spending departments like social welfare, health and education and income tax instead.
So be prepared to pay more for health and education, whether you only use the public service, or private providers.
Already new prescription charges have been introduced; dental services have been decimated and long treatment queues are forming again in public hospitals.
For example, can you afford to buy private healthcare? Parents should also expect big cuts in teaching staff, class size, equipment, repairs and maintenance.
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