Thursday, June 14, 2012

Name That Country

Interviewer: You are economics professor, you speak to economics students -- how do you tell them that ___________ got into this position, and how will you teach about avoiding situations like this years from now?
Professor: I have been saying that we are going to reach this point for the last 10 years because it was something that every economist could see. We were a country that, we produced less than we consumed. It's also a social problem -- from a country that worked hard, we have become a country of social servants, and a private sector that depends a lot on the state. So, to preserve such a large state, you have to pay a lot of taxes, and that creates excessive spending and that creates deficits and debt. And, tax evasion, by the way, is another very important problem in _________.
Interviewer: How do you fix that problem -- you've got a lot of people working there who aren't paying any taxes at all?
Professor: I would call the IRS and fix it, to be honest with you, that's the best way to do it because there's no political willingness to do it. Only those that are on pensions or on salaries pay taxes and nobody did anything because they did not want to take the political risk to do something.
What do we all see now in our the economic / fiscal arena that will have American economists saying similar things 20 years hence?

Full transcript here.  

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