Six straight years of rapid economic growth transform not just the economic climate, but also the necessary content of politics. The problems which obsessed politicians and their advisers a decade ago have in many cases been solved. Growth generates bottlenecks and conflicts in areas which were not ever part of the policy agenda in the 1980s.

The extent of the economic transformation appears to be outrunning the capacity of the political system to identify and target the new priorities. Employment is a good example. In 1990 the total number at work in Ireland was 1,160,000. There were 172,400 unemployed, of whom 110,200 were out of work for over a year. In the spring of 1998 there were 1,495,000 people at work, an increase of 335,000 jobs in eight years. The increase almost exactly equals the total employed in Dublin in 1990. Employment has grown by 29 per cent over the period, which is unprecedented in a European country in modern times. The unemployment rate has collapsed from around 13 per cent to under 8 per cent. The rate of long-term unemployment has fallen from 8.3 per cent to 3.9 per cent, and this has happened despite a sharp increase in the labour supply, fuelled by rising female participation and, to a lesser extent, by immigration. The percentage of jobs held by women has grown from around 33 per cent to almost 40 per cent.

In the late 1980s there was widespread concern about emigration, with even poor football performances being explained on the basis that "the best lads are over in Boston". There have been 45,800 net immigrants in the last three years, including a few thousand from the US.

There are clear signs that the economy is close to full employment, if not already there. In the non-unionised and unregulated labour market for younger and less-skilled workers in Dublin, in fast-food and independent retailing, for example, hourly rates are now around £4, up from £2.50 or thereabouts only three years ago. But "staff wanted" signs are everywhere, and hourly rates seem likely to rise further.

The biggest difficulties facing job-seekers in Dublin and in other urban centres are where to live and how to get to work. Getting a job offer is yesterday's problem.

But the State job-creation machine cranks on, through a bewildering alphabet soup of quangos and grant-dispensers, as if the jobs revolution had never happened. In recent years most of the job creation has been outside the sectors on which these agencies concentrate. From 1996 to 1998, for example, 35,000 new jobs were created in production industries. But four times that number were created elsewhere.

Any sane person would conclude that the job-creation machine should now be switched down a gear, and that grants and tax-shelters for business should be cut or scrapped. The focus should shift to a crash programme of transport improvements in cities, and a serious effort to meet the increase in housing demand.

It costs about £50,000 in labour and materials to build a bottom-of-the-range starter home. But these dwellings cost £100,000 and upwards, despite huge availability of un-zoned and un-serviced derelict land around Dublin and other cities. This is a political, rather than an economic, problem. Local councils, under pressure from residents' groups, are unwilling to zone, even at low densities. One result is the imminent extension of the DART electric railway to Greystones, where the council resists residential development with passion.

The interrelated issues of housing provision and urban transport deserve a top spot on the policy agenda, higher than job creation.

Public spending, on areas like health, education and social welfare provision, has expanded rapidly through the 1990s. Every government through this period has enunciated ceilings for spending growth, and every government has broken them.

The Minister for Finance, Mr McCreevy, achieved an apparent adherence to a 4 per cent limit in his December Budget only through some deft tricks with the classification of expenditure. It is a measure of the success of the economy that the Government enjoys a Budget surplus despite this recurring failure of expenditure control.

I suspect that many readers will be surprised to learn that health expenditure has grown particularly rapidly through the 1990s. The recent widely-publicised problems in Galway and at Tallaght have led to calls from Opposition politicians for extra spending in this area.

In 1990 gross current spending on health was £1,377 million. According to Mr McCreevy's Budget statement it will reach £3,371 million in 1999, an increase of 145 per cent in nine years. Of course, there has been some general inflation over this period, but it has averaged only about 2.2 per cent per annum.

In real terms, health spending has risen through the 1990s at an average of 8 per cent per annum. The volume of health spending for 1999, after allowing for general inflation, will be almost exactly double what it was in 1990.

I am not arguing that double the volume of services will be delivered. There is no way of knowing, but the costs, adjusted for inflation, have doubled.

The 1999 budget for education is up 100 per cent on the 1990 figure in cash terms, despite the falling population of school-age children.

These increases are far ahead of what anyone would have thought possible in 1990, and have arisen through a combination of buoyant tax revenues and political willingness to spend.

But it is clear that spending more money has not delivered the goods in either education or health. Before Christmas there was a revealing documentary on RTE about St Audoen's School, in the inner south city of Dublin. The school sports teams practise in a concrete playground, and have no pitch. Very few of them get through to Senior Cert, never mind third level. And this is by no means an uncommon pattern in urban areas.

Dr McDaid, the Minister for Sport, compared the health system recently to a biological enzyme in its capacity to gobble up money.

The effectiveness of social spending, and the redesign of programmes, simply do not feature on the political agenda, apparently because there is enough cash to throw at the problems. But surely the boom of the 1990s has demonstrated that cash alone is not enough?

The policy obsessions of the 1980s, particularly the public finance crisis and job creation, are no longer important. These problems have been solved. But economic and social deprivation remain, despite the massive increase in social expenditure. Bottlenecks created by success are increasingly evident in transport and housing, while social policy is not cost-effective.

These should be the policy obsessions for the new decade. After all, we no longer have an exchange rate to worry about.

Colm McCarthy is a economic consultant with Davy Kelleher McCarthy (DKM)

Tomorrow: Dr Daniel O'Hare, president of Dublin City University, on education