In these years we are experiencing a profound crisis that is upsetting the entire system of the country.
Every day we hear news about the closure of companies with negative effects on the entire economic system of our country.
Until now, the governments that have followed have not done much to try to stem the dramatic economic situation.
Nobody holds the so-called “magic bullet” that will allow us to pick ourselves up, but much more could and should be done.
In the first instance, it should renegotiate the famous pact of stability and growth, so to speak, holding back the economy of Italy and all European countries, requiring a government deficit not exceeding 3% of GDP (deficit / GDP < 3%) and a public debt below 60% of GDP (or at least a public debt tends to return) (debt / GDP <60%).
This pact, in crisis situations like the one we are experiencing does not allow all countries of the euro and, therefore, also to Italy to spend more to support its economy.
So, by suspending the application of that pact would increase public spending by allowing to drain economic resources within the economy Italian.
However, one would think that Italy, having a public debt already very high as it would increase it further?
Unfortunately, in situations of economic recession, one of the levers to be used to fill the deficiencies that are to manifest within the economic system is precisely the policy of public expenditure, since, in the face of an increase in the short period of the amount of public debt, in turn, through the intelligent use of these resources in the medium to long term, there would be an economic growth that would reduce this debt.
Use intelligently public spending means direct it to households and companies through policies of income support and work (eg. Increased allowances for family responsibilities, bonuses for young couples and the elderly and families in the range of poverty , citizen’s income for the unemployed, modernization of infrastructure).
Another lever that should be used to overcome the crisis is to tax, through strong tax relief to businesses that hire workers and invest in Italy, lowering taxes on businesses and families by applying a rate which is around 20%, the rescheduling property tax; should be matched by an increase in tax rates to at least 50% on financial income and capital and a significant increase in taxes on tobacco, games and competitions.
The third and final lever is represented by the liquid understood as the money supply in the system economical.
Through the injection of substantial amounts of liquidity by the European Central Bank to drain considerable financial resources within the economy, coming to create a real driving force for the Italian economy.
With the action of the three levers described above, increase household consumption, firms would increase significantly the production, unemployment would decline, public debt would be reduced.
Ultimately, we would create the conditions for a new era of growth and prosperity.
Let us hope that this will happen as soon as possible and not remain just a dream.
ALESSANDRO PIGNATELLI
opinioneeconomia 