Courtesy of Mish.
Via Mish-modified Google translation from Libre Mercado (LM), Enrico Colombatto, Professor of Economics at the University of Turin says in an interview “The only hope for Italy is the bankruptcy of the State”
Enrico Colombatto (EC), Professor of Economics at the University of Turin and director of the Center of Economic Research in the Piedmontese town, offers a groundbreaking proposal: “Do not pay the debt.”
It seems unthinkable, but he believes it will be the only way to start fresh, leaving those who have lent money to irresponsible politicians pay for their mistake.
LM: Spain and Italy have very large states, but they are very inefficient. Our laws are stifling, heavy.
EC: In Italy, the public sector is not intended as an aid to the production of wealth and public goods and services. It has been conceived as an observatory to generate political consensus and to please the own clientele. The concept of public is of assistance but not to the public, but the public sector employee. The beneficiary of the public sector is dependent on this sector, not the public.
LM: After six years of crisis we have more spending, more laws, more intervention, … Where does change start?
EC: By the mentality. It has aggravated the welfare spirit that we have within us. The state is the problem, not the solution.
LM: It’s counter-intuitive, but when politicians fail, they want more power. And politicians who are succeeding all want more power to the state. In Spain, demonstrations call for a public banking as a solution to problems. Can we escape this trap?
EC: If we think that the state is the solution, all the problems are going to focus in that perspective. The problem is cultural and ideological. It starts when our children go to school and get to talk about social justice. Children are taught the state should solve every problem: pensions, sickness, education … The solution is to drop the veil that protects the state. In bankruptcy, people will realize that giving loans to the State, and state guarantees are useless.
LM: A few days ago there was a poll in which the public demanded more taxes.
EC: It is a matter of propaganda. The State says “do not worry, I will only raise taxes on the rich”. However, the rich pay more, but also the poor. For example, in Italy, the Monti government introduced a tax on real estate, and 85% of Italians are owners. This is a middle class tax hike. And a country that stifles and suffocates its middle class can not grow.
LM: From your perspective as a university professor, do you have bad omens in regards to a lost generation for Italy and Spain?…
