Letter to the Irish Times

Madam,

As a non-resident Irish citizen living in Argentina it is rare that I voice an opinion on the Irish economy. While economic policy affects my family in Dublin directly, it has little effect on me personally. However, as an economist specialising in international finance, I would like to point out that Brian Lenihan’s plans to place the public sector in massive international debt to rescue speculative investments at home has a precedent here in Argentina.

It also has its effects, and these go on for decades. I have published studies on the nationalisation of private debt in 1982 and 1983 toward the end of the Argentine dictatorship. The junta used taxpayer money to pay off private debts owed by resident national and multinational corporations.
While the amounts, by any measure, were nowhere near as large as those proposed by Mr Lenihan, the measure was resisted.

Unfortunately, dictatorial control over the population kept its critics silent. The debt was taken on by the state and the Argentine people are still paying the cost in interest on debt payments. None of the benefits accrued by the corporations and their shareholders have ever been paid back.
No economic theory can commit a population of just over four million people to possible public debt obligations of over $100 billion (plus interest) especially as the world economy plunges into depression.

Like my family, many of your readers have a vote in Ireland. Unlike the Argentine population their voices can be heard and they can instruct the Irish Government to reject this plan now, before it is too late. It is not my place to suggest an alternate plan; this is a difficult nut to crack. But to submit the Irish people to decades of repayments is simply not feasible. Irish economists need to return to the drawing board, even if it means that their acquaintances in the building sector might feel the pinch.

Yours, etc,
TONY PHILLIPS,
Masters Programme in Economics,
Buenos Aires University,
Argentina.