www.armstrongeconomics.com
The high taxation in Europe has crippled the economy. Those in power
have not yet figured out that 70% of employment is created by the small
business owner who they consider the rich and thus the enemy. Nowhere
has this been more the case in Italy, Greece, and Spain. Italy is the
next on the list of this Year From Political Hell come May 2018 and with
youth unemployment above 30% for the past six years, the solution is
not to lower taxes, but to steal from pensions to pay benefits to the
youth.
In 2015 alone, some 50,000 Italians under 40 years of age migrated
elsewhere to find jobs. Nearly half of them had gone to university to
get degrees to no avail. All the fancy papers to frame and hang on the
wall are not worth the cost of a frame. Italy and Greece are bleeding as
their young talent cannot find a job and are pouring out of the
country. The loss of these people is being argued is costing Italy 1%
per year in economic growth. The estimate is closer to a 2% loss on GDO
for Greece.
The center-left government of Prime Minister Paolo Gentiloni has
recognized the crisis but as all leftist governments, they just cannot
bring themselves to look in a mirror. The proposition in the coming
budget is to provide for measures that would motivate companies to hire
young people. Because of the EU budget rules imposed by German
Austerity, there is no room for more government spending. This youth
unemployment is becoming a major issue because of the upcoming elections
in 2018.
How can government create more spending yet remain inside the EU
rules? The new scheme is to lower social security contributions for
newly hired employees under a certain age. Therefore, employers will see
that young people who they hire will have less money taken out for
state pension contribution and thus make them cheaper to hire. In
addition, Italy’s government is considering sending up to half a million
civil servants to retirement and therefore create government jobs for
the youth.ng workers.
The solution is by no means lowering the taxes on small business to
create economic growth. These proposals will create the incentive for
business to ONLY hire the youth and to terminate the higher cost
employees whenever possible. Lowering the pension costs in social
security contributions can only lead also to the dismissal of those
employed young people as soon as they grow older and exceed the age
limit to be determined. And the promise of new jobs in the state fails
to account for the rise in pension costs.
The Italian pensions system is a Ponzi Scheme so retirees are paid
for by the contributions from the youth. The entire pension system is in
crisis and this scheme concocted post-World War II is reaching the
breaking point. Even in the USA,
the census has revealed that of the 18-34 age group, 32.1% live in
their parents’ house, while 31.6% live with a spouse or partner in their
own homes and 14% live alone, as single parents or in a home with
roommates or renters. The number of youth living at home into their 30s
is greater than out on their own.
In Italy, the age at which young Italians can expect to be
financially dependent on their parents is also growing rising rapidly
and is expected to reach 38% by as early as 2018. Without a complete
restructure of government, using the analysis of whatever trend is in
motion will remain in motion will reach a staggering 48% by the end of
the next 8.6-year wave 2028.
The Italian government is not addressing the issue and even on the
retirement front, the government plans to increase the retirement age to
67 years after the elections.
This is why the whole system is simply UNSUSTAINABLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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