Vwe are under the effect of a double analgesic. But we don’t notice or pretend nothing has happened. Understandable in the face of the autumn onset of the virus. Public debt will grow by almost two hundred billion at the end of 2020. It was (partly) inevitable. These are numbers that we remove in normalcy, let alone now. Even if the ECB (and the Bank of Italy) will own about a third of them at the end of 2021. And the 10-year BTP fell this week to 0.72 percent. Borrowing has never cost so little.
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The second painkiller is for many a kind of vaccine necessary to cure the ills of the economy, in the dangerous belief that the state can do everything. Without limits. To subsidize, integrate, protect. And, as an “entrepreneur of last resort”, save all jobs. Sooner or later this illusion will fall, starting with the end of the layoff freeze. We have to tell ourselves. And get ready. Nobody disputes the different role assumed by the state, and not only in Italy, in the face of the pandemic. It was necessary, above all to protect the weakest. A question of civilization. But not its excessive flooding to the detriment of the market and competition, concepts that have taken on negative if not apocalyptic tones in the daily debate. As if private action were always suspect; the legitimate (and regulated) pursuit of guilty interests. And relying, consequently, on the saving public intervention by definition, virtuous regardless.
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I private individuals in economics have their faults, but if we think like this we will encounter bitter surprises. When the double analgesic begins to wear out its beneficial effects, an unwary public opinion will feel betrayed. Spreading the feeling that there is some kind of citizen welfare is deceptive. Those who have institutional and government roles have a duty to say so. In recent days, the British Chancellor of the Exchequer, Rishi Sunak, speaking to the House of Commons said, in no uncertain terms: “We cannot save every company, we cannot save every job”. He did not say: “Get by.” He told the truth.
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The Italians have proved to be adults in fighting the virus (better than many others), they will also be successful in building recovery if enabled to work with confidence, invest in their training, start new businesses, and enjoy good credit. A discourse of truth (and fairness) will leverage their desire for redemption, the sense of duty (yes duty) of the many who sacrifice, suffer, reinvent themselves. And they must be encouraged, helped, not deluded. A narrative of convenience, suggestive and misleading, will instead lead us to believe that we can borrow without limits (so why pay taxes?) And always expect help from the state. Whatever it takes. Unfortunately, no one will deliver the work home. As if it were a package. It will always be the result of hard work, research, study. Even after ferocious disappointments.
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In the next few days, the implementing decrees of Intended Heritage should be issued, the operational arm (but separate in terms of assets) of the Cassa Depositi e Prestiti to intervene with public money in companies in crisis. It will have 44 billion available, which are not postal savings, but public debt. An indispensable tool. It is estimated that 25 per cent of companies, equal to 18 per cent of gross domestic product in terms of added value, are at risk. Taxpayers hope that money is best invested in protecting assets that have a future. Even painful restructuring in terms of employment will be inevitable. Better to say it right away so as not to create unjustified expectations. On Friday the decree for the establishment of the “new Italian airline” was signed. It is hoped that the bitter confrontation between the political forces to get a seat on the council (the members have thus gone from 7 to 9) will reveal a renewed energy in managing Alitalia which loses half a billion a year. Giving money to deceased companies, transferring the cost to the entire national community, and perhaps denying it to youth startups is not the best way to start growing again. Nor does it serve to save jobs. Workers are better protected with active policies that retrain their professional profiles. To overwhelm the economy (for example by preventing firing beyond a certain limit) is harmful to everyone. If companies don’t reorganize, they simply die. Competition creates opportunities for young people, rewards merit, reduces inequalities. Italy has one of the lowest birth rates of businesses and only a minority of young people think of setting up their own business, of being an entrepreneur. Of course, if the company is viewed with suspicion, it is no wonder. But the future, in the circular and sustainable economy, will be studded with many self-employed jobs, not necessarily despicable and precarious. Better get ready.
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It is also curious that many of those who invoke state intervention in the economy or its due expansion in the protection of public health, neglect to address the other side of the problem. Someone the state, that is all of us, will also have to finance it, not being able to go into debt indefinitely. Therefore, the issue of tax evasion is not addressed with due sincerity. One cannot expect public aid and, at the same time, not feel the moral duty to contribute, respecting progressivity, to its sustenance. The European program Next Generation Eu (it is called that and it would be nice to translate it into Next Generations) will make possible, in the context of serious reforms, a healthy reduction in the tax burden, especially in favor of the middle class and the workforce. But a discourse on the revision of tax revenues will not be eluding, which will result in an increase for someone (especially if too many subsidies are reduced). We are aware, even more seriously these days, of the urgent need to invest in the National Health Service. Leaving aside the Mes, the subject of an esoteric political controversy, for a moment, one cannot think for a long time that the cost of public health will weigh so heavily on labor income. And even those who rightly fear the intrusiveness of the state like entrepreneurs should do some more reflection. Was it right not to pay IRAP (which partly supports the Health Service) in June even for companies that were not affected by the pandemic and that had, in some cases, earned more? Was it right to eliminate the superticket even for those who could have easily paid for it? The state is one. There is not one sly and grim and another generous and protective.
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10 October 2020 (change October 10, 2020 | 22:00)
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