It seems to me, if I were made dictator of Greece for one year , I would implement a much better plan to fix the economy than anything I have seen yet. The stakes are huge but the Elite are playing the lute while Athens burns. The instrument is socialistic demand side fixes, that have been proven to fail, every time they are tried. Meanwhile… circumstances change for the worse, daily. Greek GDP is falling off the table. The situation requires drastic action to stem the economic blood loss, and to, change the trajectory of the debt to growth ratio. Your 401k and retirement are directly threatened by this state of affairs even if you haven‘t invested in Greek or European debt. When it explodes, the Elite will not take any loss, you will, look at MF Global, the Elite will simply raid our accounts to pay themselves off… Then weep how bad the feel that they had to do it! Like Jon Corzine…
Bankruptcy is coming anyways so get it over with. The next thing I would do is eliminate all taxes… At this point, the societal myth of Greece is such that, the Greek people will not pay taxes. As a result of this pernicious situation, everyone is a criminal, since no one pays all of his or her taxes. This creates a corrosive attitude to government and morality that enables dependency and undermines productivity. Since taxes are not paid anyways, eliminating them would serve as a means, to raise some of the underground economy aboveground and produce economic growth.
Taxes would be replaced with import duties on all goods. An equal duty of ten percent put on all imports would be the maximum I would institute. This would only last until the new Constitution was ready and the reset is complete. Then the import duties would be eliminated and replaced with a consumption tax. Income based taxation would be Constitutionally prohibited. All taxation would be maxed out at ten percent Constitutionally. This would hold the new government to an actuarially predictable limit.
All second pensions and pensions to persons under fifty years of age would be immediately eliminated. The entire dependency ethos would be questioned in a advertising campaign across all media. The contrast between someone working daily, while someone else, the same age, plays bocce ball on the beach collecting their parent pension, would be highlighted. I would use every means to inculcate to the people the necessity of being productive. School children, in Greece especially, should read Plato’s reflections on Socrates. The ethos that Socrates propounded was as productive and morally responsible as any. The fact that Saint Thomas Aquinas, one of the doctors of the Church, included the teachings of Aristotle in the cannon of the Church, shows the moral truth of the philosophy. The uplifting stories of Horatio Alger should be included in every school children’s reading around the World.
The next would be to eliminate all bureaucratic regulation while keeping all legislatively founded laws. Regulation, permitting and licensing would be gone. Historic protections would be the only bureaucratic regulation kept. Bureaucratic regulation creates an atmosphere of molasses for the economy. Regular law would be kept and enforced. Criminal law especially would remain because it would be the acme of insanity to eliminate it.
The elimination of bureaucratic regulation would be a huge supply side stimulus to the Greek economy. This supply side stimulus would necessarily generate jobs and economic growth. As people start businesses they have been thinking about for years, there would be creative destruction, with the resulting economic efficiency and productivity increase that follows. These two things alone, eliminating bureaucratic regulation and all taxes, would create the conditions for GDP growth over seven percent, even staying within the Euro zone.
Next, I would set up a new Constitutional panel of ten people, (none of them communists or socialists), using the US Constitution as a model… I would, of course, add a NUMA or Fourth Branch, to it. This new Greek Constitution would limit the power of the Elite as much as realistically possible. Openly avowing, in writing, it’s antipathy to the welfare state and regulation produced by bureaucracy. The last thing would be to, have elections, reset the government, and step down. Go on a trip around the Mediterranean for a few years. Maybe visit Lydia and Sparta.
The path the Elite in Europe and Greece are taking is not working. Clearly it will not lead to a good outcome for anyone. Moreover it puts the World’s economy at risk. Bankruptcy is coming sooner or later, the only question is, how big will it be? Every tranche of money the IMF piles on makes the eventual fall bigger. The Elite, however, are of the opinion that they should do whatever is the easiest thing to do… Keep bailing Greece out. Like a lemming that runs in the middle of the stampede. It has no concept of another thing to do. It just runs. No way that could ever go wrong… Right?