David McWilliams, Economic commentator, author and broadcaster

Economic commentator, author and broadcaster

"This situation is as dire as it's ever been for Ireland. You cannot take seriously anyone who didn't predict this. That's not blowing my own trumpet. It's simply that [anybody who didn't see this coming] has forfeited the right to be heard.

"Two years ago, we were in a debt inflation scenario; now it's debt deflation. Ireland was a country that was a leveraged hedge fund, betting everything on property, and we are still that country. It will take years to unravel and house prices could fall by another 50%. The commercial property market will capitulate totally and the government's budget deficit will get worse, not better.

"Unemployment will hit double digits by 2009. Most employment creation had been in domestic services, but the financial system is now shrinking. Unemployment will hit the commuter towns around Dublin much worse – the 'Decklands' areas.

"It's hard to say how high unemployment will go but the way the country is losing jobs by the week, it could be 12%, 13%, 14%. Finland in 1992, which had very similar economic background noise to Ireland today, experienced unemployment of 14%.

"The silver lining is that those, such as multinationals, investing here in real business can now make money in Ireland. Input costs will be much lower and that's something the state should go out and market.

"Should the government go for a fiscal stimulus for the economy? Yes, absolutely, it should. It should dispense with the Department of Finance advice about prudence. Look around the world: countries have dispensed with fiscal rectitude or containment.

"How well are Brian Cowen and Brian Lenihan dealing with the crisis? I just think they're traumatised. I wouldn't be excessively harsh. We collectively got ourselves into this mess. We are to blame. Fianna Fáil caused this recession by not taking remedial action in the last five years. But there is no point in hoping one guy can take us out of it.

"This is as close to [a state of] war as you get in peacetime. So you have to throw out the rule book and mobilise. Is there any good news? Not for the next 12 months. In the 1980s, the country was in debt but individuals were not. [That is not the case this time around. In the 1980s, there was widespread emigration but] you can't walk away from individual debt."