Frontloading the Budget with harsh cuts to avoid painful decisions in later years would kill off economic recovery, an expert has warned.
Congress economic advisor Paul Sweeney accused the Government of deepening the black hole in the state's finances by undermining consumer spending through severe cutbacks and tax hikes.
As figures show Ireland's budget deficit among the highest in the EU last year, Mr Sweeney said it was time to admit the target of slashing it by 2014 cannot be met.
"The Government blew the Celtic Tiger boom with free-market fundamentalism of tax-cutting and de-regulation," Mr Sweeney said. "It is again in the grip of failed conservative economic policies."
Official figures from the European Union show Ireland last year had the highest budget deficit of all 26 member states at 14.4% of Gross Domestic Product (GDP), which measures the value of the economy.
It was followed by the UK at 11.4%, Spain 11.1%, Latvia at 10.2% and Portugal at 9.3%. The Eurostat statistics did not include Greece.
At a two-day economic conference organised by the left-leaning economic think-tank Tasc and the Foundation for European Progressive Studies, Mr Sweeney said there were three major crises facing the state - jobs, fiscal and banking.
But he said the Government was focusing only on the fiscal and banking side, claiming it was making a mess of both.
The economist accused the Government of giving in to bankers and bowing before the markets for fear of upsetting them.
He called on the Government to boost investment in December's Budget, reform corporate governance and company law, and added that tax increases should be focused on wealth and profits, such as increasing Capital Gains Tax and extending the 2% income levy to corporate profits.