Fiscal policy

What the United States can least afford is four more years of election campaign-style politics. Both camps must work together to avert fiscal disaster. But are Democrats and Republicans willing to cooperate for positive change? […]

To be clear, Britain is not Greece. Under enormous pressure, the Greeks actually had to cut public spending while the British so far are only talking about it. However, unlike the Greeks the British still have their own currency and central bank (and they pay some taxes, too). As long as the Bank of England continues to buy UK government bonds as if there was no tomorrow, they will be just fine. […]

Countries such as New Zealand should study the European experience closely. You cannot become prosperous by redistributing wealth. Any successful society needs a strong private sector. And you also need it to pay for the services delivered by the state. […]

Having unsuccessfully followed textbook advice on dealing with the global financial crisis, it is high time to explore alternative ways of dealing with the root causes of the crisis. Whether politicians have the courage to touch Tanzi’s radical solutions is a different question. […]

Once it is finally realised that this economic crisis is not an ordinary recession, perhaps we will stop deploying Keynesian remedies and begin more fundamental reforms as advocated by Tanzi. But then again, it took several decades until communism’s apologists ran out of excuses – and some are still at it. […]

Readers do not have to agree with every single prediction or assessment in Tanzi’s book, and may even miss a more clearly spelt out recipe of how to reduce government to the smaller size that the author deems sufficient to fulfil the functions of a modern state. But Tanzi’s well-written, thoughtful and thought-provoking book will leave readers better informed and better able to engage in debates about the future role of the state in the economy. […]

Australia is on a slippery slope of becoming more like European countries. If the government continues to spend big and finance it through deficits, the future tax burden may have to rise substantially to pay for a growing debt burden. […]

If Europe and America are bent on committing suicide, there is nothing Australia can do to stop them. But we can decide not to join them. […]