Tuesday, March 31, 2009

Regime Uncertainty

The vulgar Keynesian does not understand that policy activism itself works against economic prosperity by creating what I call "regime uncertainty," a pervasive uncertainty about the very nature of the impending economic order, especially about how the government will treat private property rights in the future. This kind of uncertainty especially discourages investors from putting money into long-term projects. Robert Higgs
Are you waiting for the Budget next week? So am I. So is most everyone I’ve spoken to recently. Nobody knows what to expect: other than it won’t be pleasant. Ireland has been gripped by regime uncertainty since last summer – to use Robert Higgs eloquent concept. The uncertainty continues.

Not everyone is uncertain, of course. Standard & Poors decided not to wait for the Budget, and went ahead and downgraded Ireland's credit rating from AAA ranking to AA+. Perhaps they read yesterday’s OECD report showing that Ireland is unique in embarking upon a tax-increasing, deflationary budget among its member nations (see table - HT Constantin Gurdgiev).

Unfortunately the Budget won’t bring certainty – neither to the Government’s own budgetary situation nor to the outlook for Ireland’s businesses and their employees. The regime uncertainty looks set to continue.

2 comments:

  1. Gerard O'Neill, if that is your name, you sound somewhat like an Austrian! Keynes was an empire builder. Austrians simply tell it as it is.....not too popular among the Rhodesians if ya get me! New ?World Order? Yes, I'll have some of that but what are the Austrians saying? Lies? Who is telling lies. Inflation isn't theft, it's growth! Feel the width never mind the quality..... Yes just sign here, your predecessor didn't and we all know what happened to him!
    This is BAD and may last for 20 years until WWII oh yes we had that already. OK a war on Terror and climate change, notice, they cottoned onto the lack of warmth....
    Soo why isn't Brian the toilet, as we know him now, handing out de stimulus? No cash? Borrow some? I know the guys in Anglo-Irish will lend at the drop of a hat! Anyone's hat provided there is a fifty in it!
    Things are going to be BRUTAL!

    ReplyDelete
  2. We do need taxes as other wise we will get a revolution. Seriously. When a government is exposed as corrupt and incompetent there are few options.
    Down? Repeat after me: At least I am not an Icelander.... Yet.

    ReplyDelete

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