Money Printing

Money Pumping
Paddy Hackett


“It is crucial now that the world - and Ireland- creates inflation, not deflation. If we haven’t the stomach to print money(which would be by far the easiest exit route), we need to turn on the taps through government borrowing” (This Is Not The Time ToPanic by David McWilliams: Sunday Business Post 15th March, 2009)

In his comments on current economic conditions David McWilliams suggests that under the present economic downswing the Irish state can liberally borrow funds to compensate for the steep fall-off in revenue from taxation. It also suggests that this wholesale borrowing will largely relieve the Irish economy of the problems it has been experiencing as a result of the economic downturn. He also claims that this mass borrowing will prepare the Irish economy for taking advantage of the pickup in the global economywhen it comes.

David is a victim of the illusory way in which capitalismpresents itself. He seems to think that the Irish economy can essentiallyavoid the effects of the global economic downturn by borrowing. If this is the case then there need never be recessions since economies can merely borrow their way out of them. Borrowing thenis the the agency that prevents economic recession. But it is just this borrowing that has largely helped turn boom into bubble withits current deflation. The very borrowing of the banks and privatecompanies in Ireland and elsewhere was a factor in intensifyingthe economic conditions that created speculative practices. It is only at a particular stage in the downswing that the injection of cash into the economy can precipitate recovery. At this stage the economic slump has effectively bottomed outrendering it ready for take off. If it was as easy as David suggests there would never be recessions and there would be no need toabolish capitalism and replace it with communism.