| routsounmanman said: This latest "austerity" package will kill us. Our economy will contract a further ~6% AT THE VERY LEAST. We should just default and go back to the drachma. Greece would fill with tourists yet again (maybe even more so, with Spain, Portugal, Italy,etc in the Euro) |
If you default, you'd have to have austerity, anyway (as you'd have to balance the budget IMMEDIATELY, as in, not a single dollar borrowed - no one would lend to you). If you go to the Drachma and start "printing your way to prosperity", then you'll suffer extremely high inflation, and austerity.
Which option do you want to take?
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Here's how I'd do it:
- Leave the Eurozone and the EU. Now you can get rid of all the regulations imposed by the EU. Cutting costs to businesses without cutting taxes.
- Privatize as many assets as possible. This brings in a quick source of money, as well as giving the private sector a shot in the arm.
- Merge income/payroll taxes in a single flat-rate tax. This makes it harder to avoid taxes (and reduces incentives to do so), makes collection of taxes cheaper, and, ultimately, leads to a greater income from the tax (without being at higher rates).
- Set your corporation taxes to the lowest in the region, and pass laws which makes it as easy as possible to hire/fire people. This should help attract foreign investment.
- Seeing as you're out of the Eurozone. Experiment with non-centralized currency. The only other example (that I know of) is Costa Rica, and they have an extremely low rate of inflation.
Once I've done all those, I'd look at the state of affairs in the economy, and cut as much spending as needed to balance the budget.
