Finance minister Brian Cowen thinks so.

He believes that eliminating the net national debt over the next five years is the most prudent course of action . . . if not for us today, at least for our children.

"The next generation will not inherit our net debt and their opportunities and choices will be all the better as a direct result of our prudence, responsibility and long-term approach, " said Cowen last week, launching Fianna Fail's economic policy document.

Cowen claims he can reduce the net national debt of around 22bn, or 14.5% of the wealth created in the country, to around 7.5 billion by the year 2012, or 3% of the wealth generated.

Given that 20 years ago, we toiled with a national debt which was more than 100% of GDP, getting that down to 3% is regarded as effectively zero debt.

But won't this cost us a lot now?

From the figures produced by Fianna Fail, achieving zero debt will cost around 3bn a year. Others argue, as the national debt has been steadily dropping over the last decade, that this type of money is better spent on building schools, hospitals and roads, which would be of as much benefit to the next generation as a debt-free country.

There is also the belief that Cowen's announcement of a debt-free Ireland by 2012 is a stunt targeted at the older voter who has experienced the dark days of the 1980s and would literally wonder at what Cowen himself described as a "historical" achievement. Younger, more spendthrift voters might be less impressed.

Why is Cowen talking about reducing the net national debt, and is that different to the national debt?

There is a substantial difference and one that was glossed over by Cowen when he announced the elimination of our debt.

In 2001, the then Minister for Finance, Charlie McCreevy . . . in yet another prudent move which sparked considerable controversy . . . set up the National Pension Reserve fund. Under this, the government committed to saving at least 1% of GDP every year (around 1.6bn) to help fund the mounting costs of public service and social welfare pensions. It was argued that due to the greying of our population, the pensions bill would, in about 30 years' time, place an enormous strain on the exchequer and that we needed to put some money away now to smooth this cost. No monies can be drawn down from this fund until 2055, when our population will be at its 'greyest' and the cost pressure at its greatest.

The controversy was that the government was putting aside billions of euro of taxpayers' money not just to pay for future social welfare pensions but public service pensions also. The government never specified what portion of this mounting reserve fund . . . which today totals 18bn . . . will be earmarked for social welfare pensions and how much for public service pensions.

Given that the pension fund amounts to government savings, the net national debt is the national debt, or the amount the country has borrowed, less the amount saved in the reserve fund. Accordingly it is far easier to reduce the smaller net national debt than the national debt.

So has the national debt reduced also?

At one stage in the 1980s, Ireland plc was literally months away from being declared bankrupt by the International Money Fund . . . the world's bankers who lend to povertystricken nations.

Between 1980 and 1990, the national debt more than tripled from 10bn to 32bn. Factories were closed, few were working and inflation was running at 20% so little wealth was being created. This meant we had to borrow to keep the country ticking over. This attracted hefty interest charges and in order to keep the lines of credit open, we had to borrow to pay off the interest so we could borrow more. It was a vicious spiral.

Governments came and went, mainly over ever more desperate attempts to raise taxes to keep the sheriff from the door.

Most famously, the Fine Gael/Labour government of the early 1980s fell spectacularly over John Bruton's plan to tax children's shoes. The period also gave rise to Charlie Haughey's famous 'belt-tightening' TV address to the nation which was completely ignored by Haughey himself, and his government which continued to borrow with abandon.

Only by the fact that countries such as Argentina and Mexico were in an even more parlous financial state, and that the US was sympathetic to our condition, was the IMF stopped from taking over the country.

In 1990, the 32bn national debt represented 92% of the wealth created in the country and attracted interest payments alone of 2.8bn. This mean that one in every four punts (as they were then) collected in tax revenue went to pay off the interest.

By comparison, today the 36bn debt is around a quarter of the wealth created in the country while the interest on that loan is 1.4bn. More critically, the interest charge on the debt represents a negligible 3% of tax revenues collected.

What about our massive private debts?

It is ironic that when the government was up to its neck in debt in the 1980s, most people had very little private debt and credit cards were only used by the rich and famous. Today, while the Finance minister makes the historic move to get rid of our national debt, people's private debt continues to go through the roof.

According to the latest figures from the Central Bank, credit card-debt continues to grow, and at the end of February 2007, it stood at 2.7bn, a one-third increase on the 2bn outstanding debt just 12 months earlier.

But Cowen cannot and will not do anything about people's private debt. "Lifting the burden of debt from the shoulders of our children is not only the most fiscally prudent course, it is simply the right thing to do for a generation which will face increased economic competition from across the world" he proudly announced last week.

So from 2012, all the 'next generation' will have to worry about is those mounting credit-card bills. Ahem.