DAVID MCWILLIAMS, once the doyenne of economics has become the country’s merchant of doom. The pop economist is writing in the Irish Independent today that “Ireland is staring down the barrel of bankruptcy”.

McWilliams is complaining that the government has not learnt their lesson from the recent bust. “The truth is always secondary to the spin,” he says.

Making reference to Brian Cowen’s accusation that the media was the cause of the Moody’s downgrading McWilliams says: “We see again today the Government complaining about too much “negative” comment. They just don’t get it.

“Analysis is not about positive or negative anything, it’s about the truth and telling it like it is. And in truth, the situation is getting worse.”

McWilliams points to a number of problems including rising unemployment and emigration and the large government deficit. McWilliams says that although we need to cut costs, we’re in a catch-22 situation.

He agrees with Paul Krugman’s criticism of Ireland, that if costs are cut, we also cut growth. “The more you cut and tax, the less the growth rate and the more the efforts to cut the debt fail. This process – known in economics as a ‘failed fiscal adjustment’ – occurred all over the world in the 1980s,” he says.

McWilliams concludes that positive economic reports are nothing more than “propaganda”.