It's all about the debt, stupid.

With German taxpayers being asked to fund Irish civil servants salary increments, no wonder they are pissed off with us.

Once again the surreal world of bland consensus forecasting has caught up with reality. And guess what, the ESRI has confirmed what we all know to be the case – we cannot slash and burn this economy and society back to recovery status.

Austerity is an economic Verdun, consuming the futures of the brightest and the best. 70,000 people will leave for futures elsewhere next year. To make matters worse, 30,000 will come here to take up skilled jobs we are not qualified to fill.

Economist’s use of benign language to ease the pain, is like using a hug and a kiss to treat serious illness. All the headline targets are heading in the wrong direction. Things have moved from being a slowing down in the pace of decline, to a quickening in the pace. National domestic income, the stuff Government relies on to generate its revenue, is heading into negative territory while the Croke Park agreement remains intact.

Let’s face facts here. The agreement was struck using an optimistic anticipation of recovery by a bunch of discredited politicians, who have since lost their jobs. The biggest bunch of bluffers in the history of this state, were blind to their collective hubris. They labelled economic banditry a “boom”.

Some of these bandits were the public service trade unions, which is why the Croke Park agreement cannot stand and Kenny & Co better come clean before year end.

Public sector wage rates have to be slashed again with cuts this time targeted at the medium to higher paid ranks and higher paid pensioners.

The obscenity of the partnership approach resulted in unproductive swathes leveraging enormous income benefits for no return. The senior civil service were delighted to see lower ranks pay increased as their rising tide lifted their boats. And they were very good at benchmarking their salaries to private sector correlates. But theirs is an aberrant version. Upward only salary reviews are unique to the public sector. In the private sector, wages are slashed rates when profits decline.

It’s frankly obscene to argue for increments when the money to pay for them has to be borrowed by a Government with no credit rating. With German tax payers being asked to fund Irish public sector wage increments, no wonder they are so pissed off with us. And no wonder they are so unwilling to let the ECB fund our sovereign debt given so much of it results from banditry.

While none will admit to it, we are once again using the traditional default jobs strategy – exporting people. Do we think because we have a sovereign boundary, that the geographic reality of being a small island within the shadow of a larger one and off the cost of mainland Europe someway meant we could ever economically succeed in generating jobs for all the people, all of the time.

We managed to generate jobs for all of the people some of the time, only because we built houses for them to live in. And to do this we borrowed billions from abroad, much of which will just have to be written off.

The brutal reality is we have too many people living on this island for it to work as anything more than a small, specialist regional economy. National sovereignty means nothing when you cannot afford it.      

We might get to sustainable sovereign independence, where we generate jobs for most of the people most of the time and accept that some will leave to go somewhere else. But we can only do this when the debt we used to give a job to everyone has been slashed – and as we cannot generate enough income to rebuild and repay – we have two choices. Either we starve to pay the mortgage or feed ourselves and pay what we can off our debts.

Someone better tell the well paid cohorts within the protected public sector that “it’s all about the debt, stupid”. We cannot afford to pay you what you think you are entitled to.