For a lesson in the type of economy a country should not have, look at Italy.
It penalizes entrepreneurs in so many ways. And the adverse
effects are so evident; the country is always in a financial mess.
Today, Italy is on the verge of bankruptcy. Its government debt, as a percentage of GDP, is about 125% and unsustainable. Some reasons why:
An Italian company, after it has 15 employees and then decides to expand with another employee, sees the bureaucratic fun start. Health and safety regulations become prohibitive. The employer must pay two-thirds of the employee’s social security. Then unionization becomes inevitable. Forget the added problems of terminating employees.
And with the 51st employee, regulations become even more onerous. There is an odd emphasis on contrived handicapped provisions. Not enough added paperwork and expense? Wait until you have 101 employees.
With it all, there are loopholes and tax credits so that you need an army of expensive experts to tangle with various government agencies.
The best solution? Stay small. The result? Italy remains a 20th century country living in a 21st century economy, hoping to be bailed out by the rest of the world which cannot afford it. (See the Earl J. Weinreb NewsHole® comments.)
Today, Italy is on the verge of bankruptcy. Its government debt, as a percentage of GDP, is about 125% and unsustainable. Some reasons why:
An Italian company, after it has 15 employees and then decides to expand with another employee, sees the bureaucratic fun start. Health and safety regulations become prohibitive. The employer must pay two-thirds of the employee’s social security. Then unionization becomes inevitable. Forget the added problems of terminating employees.
And with the 51st employee, regulations become even more onerous. There is an odd emphasis on contrived handicapped provisions. Not enough added paperwork and expense? Wait until you have 101 employees.
With it all, there are loopholes and tax credits so that you need an army of expensive experts to tangle with various government agencies.
The best solution? Stay small. The result? Italy remains a 20th century country living in a 21st century economy, hoping to be bailed out by the rest of the world which cannot afford it. (See the Earl J. Weinreb NewsHole® comments.)
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