Sunday, May 13, 2012

Italy: Debt crisis or government waste?

All governments of the world, including Italy, are in crisis because of their debt situation. They talk about debt crisis, but why nobody is telling me how did we finish into this mess? 

So I wish to go into depth about how this ridiculous amount of money has been spent. If to the public debt we add what the Italian government owes to its suppliers, the picture is even worse. 

For the non-Italian readers I want you to know that a company that has among its customers the government, the company gets paid from this very special customer with at least twelve months delay and along this line. If there are sums to be cashed from the Government you can be waiting for years. Again: how did we get to this debt? 

As an Italian I hate having to admit all this money has been wasted to pay a parasite-management which approved a multitude of public projects that lie unfinished all over the country. Unfortunately Italians are used to this incredible waste. The international readers should also know the high amount of tax money cashed by Italy were eventually stolen by the local public officials. 

Here are some examples: to build a road you need one million euro and six months. The contractor starts working and during the building process, costs start to skyrocket to €4 million. Three years have passed and the project is not finished yet. At this stage everything get stuck because the local prosecutor opens an investigation that is absolutely legit, but it costs the taxpayer additional money to the amount allocated for the road that in the meanwhile keeps growing. The road yard closes down and the road is now dead, the money has been spent and the Italian road system hasn’t been developed, expanded or fixed any further. The real tragedy is in our country this example of the road yard story is the standard practice for every public project. 

Can you imagine what the Italian people’s reaction would be when the government is asking its citizens to sacrifice to fix a system that was damaged by the same people who are now asking them the money? 

Why those in charge can’t cut the wasteful spending? If we don’t cut the wasteful spending, there’s no reason to raise taxes because Italians aren’t willing to pay it. 

It’s the basics of Economics: if incomes are lower than wasteful spending anyone agrees we have to cut somewhere. Differently, Italian people will always pay more taxes but this money cashed by the government will be wasted anyhow. 

Luigi Foscale

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