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I really think the point has to be driven home to some of the people who are ranting on about public sector pay cuts that they, through no fault of their own, have been funded to a huge degree using borrowed money.
Their pay rates were only possible because of bumper tax returns which were propped up by huge % takes on property transactions, these were all funded by borrowing. So, in effect, the public sector's pay rates are simply a symptom of the property bubble. They were being funded by Anglo Irish Bank and other 'entrepreneurial' financing companies, not by actual earned income created by the private sector.
In effect, much of our public sector borrowing is hidden as it was borrowed through a chain of transactions that ultimately leads to mortgages.
I don't blame the public sector for this, I blame Bertie Ahern, his cronies and a complete lack of a grasp of economic reality, that seems to have been the basis upon which the property bubble was allowed to inflate.
We need to get back to a bit of reality. We simply cannot afford to continue spending money we do not have.
The tax base was totally distorted and reliant on a source of income that simply was not sustainable. If Bertie, Charlie McCreavy and the heads of the Department of Finance did not know this, they were grossly incompetent. However, it looks more like they only cared about the next General Election and not upsetting the 'apple tart' (to quote the great man himself).
Realistically, we're looking at returning the pay levels and economy to about 1998-2001 levels i.e. before the really mad property boom kicked in.
The cost of living is falling, and mortgage rates are low, so people will survive.
Banks and developers are simply going to have to take some share of the pain as people are not going to be able to repay some of the more recent mad mortgages. That means being flexible, allowing people to pay what they can pay. The reality of the situation is the banks took a risk and mis-sold mortgages to people that they were unable to pay. They can't, in all seriousness, expect to have no consequences for this.
The public sector is also going to have to get a bit realistic about what we can afford to pay. Many of us in the private sector have taken 100% pay cuts i.e. we've been dumped onto the redundancy pile.
If we don't get a grip on reality fairly soon, we aren't going to have an economy to discuss in a few years time!
These pay demands are simply not capable of being met. The exchequer is in such a bad state that it will start bouncing cheques fairly soon.
I can fully understand why nobody will take Fianna Fail's calls to tighten our belts seriously though. I mean, why would we? They've been pigs feeding in the trough and seem to be living in economic la-la land while trying to bale out their buddies.
We need a General Election, new leadership that's actually credible and not up to its neck in sleaze, corruption and in bed with property developers.
I seriously can't see how the public service pay levels will be sustainable though. Sadly, it's just not possible.
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