How would you like it done Sir? Harsh or Severe?

The UK government announced its austerity package today; it’s harsh. But how does it size-up to Irelands plans-in-the-making? Opposition members in the HOC were quick to point to Ireland and our governments belief that we could cut our way out of the economic problem; Brian Lenihan’s we’ve turned a corner speech last year was the focal point of their ridicule.

Such ridicule, if heeded, may be good for Ireland; it is becoming clear now that Ireland's "misguided austerity" could actually be a key thing that helps Ireland grow! albeit indirectly via less severe global austerity. In any event, I think it is interesting to place the newly announced UK austerity plan in an Irish perspective. In simple capita terms the UK is just shy of being 14 times bigger than Ireland. We can compute some basic figures off this fact to make some quick comparisons. I also think doing so will help put the fairly animated debates in the UK over their cuts into some perspective for us here.

I’ll just run some of today’s headline figures –

UK Public sector four-year austerity package in Irish terms: €7bn

UK Public sector job cuts in Irish terms: 35,000 jobs

UK Welfare cuts in Irish terms: €575m

UK Extra social care in schools in Irish terms: €165m

UK Axing quangos in business, innovation and skills sector in Irish terms: ~ 2 quangos; €30m

Patrick Wall on FoodRisC

Patrick Wall, Geary Fellow and Professor in Public Health talks about the new EU food risk perception project that he heads up.

Irrational Fear of Risk

William Reville has a piece in today's Irish Times about the fear of risk

New Blog on the Irish Economy

Thanks to Stepehen Kinsella for pointing me towards the new blog on the Irish economy: http://www.irisheconomy.ie/. Featuring many of Ireland's top macroeconomists, this blog looks like an interesting read, and a valuable source of information on economic developments as they are happening in Ireland.

Macroeconomics and finance don't feature a whole lot on this blog, but the chart below caught my imagination when it was forwarded on by a friend this week. It shows that investing in U.K. government debt is almost twice as risky as buying bonds sold by McDonald’s Corp., based on prices in the credit-default swap market since June. “Talk about ‘McBritain’ is an insult to Ronald’s outfit,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management SA in Lausanne, Switzerland.

I assume that Irish government debt would stack up in a similar position to British govt. bonds. I'm hoping to get some data on this soon; but in the meantime its fascinating to see how financial markets can view a corporation as more of a safe bet than a major European government. I wonder if the average Joe's 'perception of risk' would correspond accordingly. In saying all of that, these are times when Keynesianism may be more appropriate than expanding the monetary base (see here, here, here, here and here), and McDonald's are making sizeable profits during this global recession, as we mentioned before (here).

Update on 19th December:

I got the chart for Ireland's government debt priced in the credit-default swap market for the same time period. Irish govt. debt is considered to be even riskier than the British counterpart, as well as a McDonald's bond.