I am back from the US now and have been reading a lot about how Ireland is poised to show all of us deficit supporters the “what for”. The crazies (the Flat Earthers or deficit terrorists) are now starting to suggest that the recent Irish national accounts results for the first quarter 2010 are the sign that the austerity drive has made Ireland more competitive and that an export-led growth era is emerging. You always have to be careful when using official data to conclude anything. The reality is that the national accounts data show that the Irish economy is still declining domestically and this is causing the labour market to deteriorate even further. The growth that is being observed is generating income that is being expatriated to foreigners. So not only is the Irish economy sacrificing real goods and services to increase exports but then the benefits of that sacrifice are being sent abroad to foreigners. If that is an example of how austerity benefits the local population then it just shows how impoverished the conception held by the crazies is. Ireland remains a good example of what happens when you withdraw public spending support for an economy facing a major collapse in private spending.