If your world weariness and knowing cynicism is at the level where you take positive pleasure in the irrelevancies, red herrings, manipulation and fallacies of public argument, then these are good times for you.

The public debate on inflation is a nice summer bonus after the paroxysms of delight you must have experienced during the last days of the Dail before its summer break.

Here's one: the last Budget was the wrong one at the wrong time, and we all told the Minister so. Everyone but the Minister knew exactly what inflation would be six months on, but the obdurate fool would not listen to the raging debate providing compellingly simple alternative policies geared, as the top priority, towards warding off the clear and present danger of inflation.

Actually, the raging argument was about a tax change called individualisation, the end of a decent society and family life. Individualisation, not sleaze, not inflation, was going to determine the outcome of the next election. So much for that rush to judgment.

Still, with the national crisis of inflation upon us and the top priority being to increase supply in the economy through competition, immigration and so on, it's strange that a measure like individualisation, which would facilitate the supply of labour, is not welcomed. Well, no, it's not strange actually, it's just one of those pleasurable inconsistencies.

Here's another: inflation is caused by greedy rich people and the even greedier petite bourgeoisie with their tasteless, conspicuous consumption.

It's another un-strange thing that the same people with their anti-social, horrible behaviour and attitudes turn up as the cause of most other ills in society, such as bad social services, the low old age pension, tax evasion, fraud, hospital waiting lists, bad roads, litter, traffic jams, holiday homes, Spanish apartment-buying, new cars, mobile phones and so on. Let us wage the class war, or maybe just the envy war, and hey, if inflation provides a handy battleground, great.

Whatever about that silliness, no-one has demonstrated, and I don't think anyone can, that putting more spending power into the hands of people on medium salaries, high salaries, low salaries or no salaries will affect inflation one way or the other. Inflation is a function of spending power and demand, and efforts to reduce it by allocating spending power differently across social sectors will not work. Redistribution of wealth is not an inflation-busting measure. There are other arguments about social welfare payments and targeting tax breaks on low incomes. They may be "coping with inflation" arguments, they are not anti-inflation arguments. How about the idea that tax cuts should be re-designed with the issuing of "free" savings bonds to people paying tax at the high rate (there they go again, the ones causing inflation)? Taking spending power out of the economy and reducing demand is a tried and trusted way to counter domestically-driven inflation. That is the effect of interest rate increases.

Increasing saving is a sensible way to use money that would otherwise go on spending. Already, the Minister for Finance is taking a full 1 per cent of GNP and putting it into a State pension fund. This is a type of enforced saving, one owned by the State.

Now the proposal is that instead of the State accumulating more surpluses through unnecessary taxes, some of us should be issued with savings bonds from the State to enforce privately-owned saving. Leave aside the fact that this would increase the domestically-owned national debt, without any increase in government receipts from the bonds, this would be the wrong direction for the EU Stability Pact on public finances. Why should the valid goal of increased saving over consumption necessarily lead to a statist solution, that is, limiting our private savings to bonds, at an unspecified rate, issued by the State?

This is a sort of "dig a big hole and bury the money 'til later" proposal. Why not allow private citizens to invest as they wish, in shares, property, bonds and deposits, across the euro zone (the relevant zone) and around the world? Paradoxically, this is exactly what the State pension fund will do. Why should savers be limited when the State will not limit itself?

Savers will get a much better return by being allowed the freedom to invest. To force people to put their money into just one State savings instrument is actually to deprive people not alone of their income but of the higher returns they would get by investing freely, a double hit.

This is another one of those un-strange things, that a sensible impulse to increase savings invariably becomes a statist, local affair. Even as the normally clear-headed Michael Noonan gave out rightly about a command economy response on the part of the Government with widespread price controls, the virus of statism found its way into the alternative savings bond proposal he mentioned.

Eliminating this virus would mean providing deeper tax incentives for private saving, through pensions and otherwise, as a replacement for tax cuts that would release spending power into the economy. If reducing demand is what we want, burying income in a big hole is a response lacking any imagination or sense. Let us rather save and invest freely.

Unfortunately, there's probably plenty more amusement to come this summer, a great time for the mental masochists. Oliver O'Connor is editor of the monthly publication, Finance.

E-mail: ooconnor@indigo.ie