Abandon the ECB rescue,
Or in one to two years,
We're bankrupt, me fears,"
Said Kelly, "and this I'll attest to."
Said Kinsella, "Your debt abdication
Would bring about rapid deflation,
For draconian cuts
Are needed, or what's
To balance the books of the nation?"
Today is Limerick Day - the birthday of Edward Lear - and this year we celebrate with a Limerick economic debate - literally. Stephen Kinsella, Lecturer in Economics at University of Limerick, has replied to a controversial proposal by Morgan Kelly, Professor of Economics at University College of Dublin. Prof. Kelly shocked Ireland with his polemic in the Irish Times, arguing that Ireland should walk away from an EU/ECB/IMF bailout that would bankrupt the nation in two years. Dr. Kinsella responds in the Guardian that the need for government to balance a €15 billion budget gap immediately under the Kelly plan would suck spending out of the economy, creating a rapid deflationary spiral.
This is all a far cry from "There was an old man with a beard," one of the Lear "Nonsense" classics, but such are the times in the land of Limerick.
Update: Here is Stephen Kinsella reading the limerick dedicated to him.