THE legendary economist JK Galbraith once commented that politics consisted of choosing between the disastrous and the unpalatable. And that was certainly the case with last week's mini-budget.

The good news for government TDs is that, thanks in no small measure to the unprecedented 10 cabinet meetings, the mini-budget managed to avoid any 'disastrous' banana-skins.

The bad news is that its impact will be hugely 'unpalatable' to virtually every man, woman and child in the country even if it will be a few weeks – when workers get their first post-budget payslip – before the full impact is appreciated.

Government TDs are this weekend taking only minimal solace from the absence of the kind of fury and naked hostility that greeted last October's budget. "Just wait until May and people realise what has happened to their take-home pay," is the common refrain from Fianna Fáil deputies.

"Middle Ireland is reeling, or at least they will be," said one government TD. "I don't think it will really sink in until a month's time," said a government source.

But there is no question that, this time last week, they would have been relieved to be where they are now. It was telling that for leaders' questions the morning after the budget, the two opposition leaders focused on the new proposals for the banks, with the €3.4bn in tax increases and spending cuts not even getting a mention. "We would have settled for that a few days ago," one government source said during the week.

The National Asset Management Agency (NAMA) poses its own political challenges – more of which later – but it says something about how politically proofed the budget was that there was simply nothing for the opposition to get their teeth into. Or the media. As you would expect, the tabloids in particular laid into the government on Wednesday, but by Friday – NAMA aside – it was hard to find even a mention of the budget anywhere in the newspapers. While the public airwaves were filled with complaints about the severity of the budget, there was nothing that was going to bring people onto the streets. The tax increases were shocking in their magnitude, but the pain was pretty well spread. Politically sensitive cuts in spending were kept to a minimum.

The general feeling of anti-climax that pervaded in Dáil Éireann in the second half of the week also spoke volumes about how public perception has shifted since last October, when there was a near revolution over the move to remove pensioners' automatic right to a medical card. It was telling that in the alternative budgets put forward by Fine Gael and Labour a couple of weeks back, neither party advocated reversing the medical card decision or scrapping the pension levy on public servants, even though both parties bitterly opposed the measures at the time. "There is a realisation that the country is in deep you-know-what and everybody is in it," one government TD said this weekend.

But even allowing for this change in attitudes, government figures were acutely conscious that voters have a breaking point. It was for that reason that the emphasis was on tax increases rather than spending cuts in Wednesday's budget. The two major items of public expenditure – public pay and social welfare – which between them will cost €7bn more this year than the government will raise in revenue, were left largely intact, for now.

Fine Gael's Richard Bruton was sharply critical of the budget's two-to-one tax increase/spending cuts ratio, arguing that his party would have reversed that ratio. Many economists agree with him, making the point that no country has ever taxed their way out of a recession. "The budget made taxpayers carry the can," Bruton said, accusing the government of "bottling it" and of being unwilling to take on the public sector.

However, the government line is that the budget was about choices. And they say that greater spending cuts would inevitably have impacted on social welfare recipients and those in receipt of public service pensions. Whether or not the government bottled it, it's safe to assume it didn't fancy any further run-ins with OAPs, even those on relatively comfortable public sector pensions.

Temporary respite

But the respite is only temporary – for the public sector, social welfare recipients and, by extension, the government. Within a couple of days of the mini-budget being delivered, government TDs were already anxiously turning their attention to next December's budget. "The problem isn't now, it's what happens next December," one told the Sunday Tribune. "Lenihan signposted €4bn for next December. Is that politically possible? That will involve cuts in social welfare, child benefit. The government got through this budget safely but it's hard to envisage another €4bn. I don't think the stomach or the tolerance will be there for that," he said.

But right now December seems like a long way off. The more immediate problem for the government is selling its proposal to shore up the banks. NAMA mightn't be the perfect solution – the reality is that, such is the mess, there simply isn't a perfect solution – but most experts believe it is a pretty commonsense approach, albeit one that potentially leaves the state significantly exposed. There simply isn't an alternative to separating out toxic loans. But the difficulty for the government is that the public hear figures of €90bn impaired assets and, in the words of one TD, "equate their extra taxes going to bail out these f**kers".

It is a perception that Labour leader Eamon Gilmore, ever quick to capture the public mood, moved to capitalise on in the Dáil on Wednesday morning.

"For six months now, in dealing with the banks and development, this government has been protecting and cosseting friends who brought down the Irish economy. Some of those friends have been investing and dabbling in property abroad. Guess what? They are now going to use the Irish taxpayer and government bonds to bail out the developments, the bad debts incurred for developments in Bulgaria, Dubai, Florida, Latvia and so on, none of which would have contributed anything to the Irish economy," he said.

Sceptical electorate

Amidst all the complexity in relation to NAMA, it was a devastatingly simple (if also simplistic) charge made by Gilmore. And based on the old adage that 'once you're explaining you're losing', it shows the difficulty the government will have in convincing an understandably sceptical electorate that the banking system needs to be protected.

It is, of course, highly possible that within a year or so, the banks – freed from the albatross of tens of billions of impaired loans – will be back lending again and the scheme will be judged a success. By then, the world economy may well be on the way back to growth. But will the current government still be here in a year's time?

The arrival of the first post-budget monthly payslip is scheduled to arrive just days before the local, European and by-elections on 5 June, something that will do little for the government's already dire prospects in those elections. And, while the impact mightn't be as dreadful for Fianna Fáil as many commentators are predicting, seat losses in all three contests are inevitable.

Politicians to their fingertips, the government TDs will soldier on until 5 June, but privately, senior cabinet figures admit once they are out of the way, it's going to hard to lift themselves for what lies beyond.

Then again, the capacity of politicians to recharge and renew their stomach for the battle should never be underestimated. After arguably the toughest budget ever, and certainly the harshest in a generation, the government is still standing and standing without so much as a wobble. The economic crisis, obviously, remains. But the potential political crisis, for now at least, has passed.

After the year Brian Cowen has had, that represents progress of sorts.