Thursday, July 31, 2014
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Chiarezza sull’Austerità

MILANO – Ho appena avuto il privilegio di parlare alla principale conferenza annuale del Consiglio economico della Germania, il braccio economico e finanziario dell’Unione Democratica Cristiana, l’attuale partito di governo. Tra gli altri relatori erano presenti la Cancelliera Angela Merkel e il Ministro delle Finanze Wolfgang Schäuble. È stato un evento interessante –e cosa più importante, incoraggiante.

Sembrava chiaro che la Germania (o almeno questo insieme piuttosto ampio di rappresentanti del governo, del mondo imprenditoriale e dirigenti sindacali) confermi il proprio impegno verso l’euro e per il rafforzamento dell’integrazione europea, e che  riconosca la necessità per il successo di tali obiettivi della realizzazione di una ripartizione degli oneri a livello europeo, che consenta di superare la crisi in corso nella zona euro. Le riforme in Italia e Spagna sono a buona ragione considerate cruciali, e sembra che vi sia una profonda consapevolezza (sulla base dell’esperienza maturata in Germania negli ultimi dieci anni e mezzo dopo la riunificazione) che il ripristino della competitività, dell’occupazione e della crescita richiede tempo.

La Grecia non ha molte alternative, ma rimane l’esigenza di contenere un serio rischio di contagio per evitare che si abbandoni il percorso delle riforme fiscali orientato alla crescita intrapreso in Italia e Spagna . Di fronte ad un alto rischio sistemico, i capitali privati lasciano le banche e il mercato dei titoli sovrani, determinando il rialzo degli oneri finanziari statali e la caduta della capitalizzazione delle banche. Questo, a sua volta, minaccia il funzionamento del sistema finanziario e l’efficacia dei programmi di riforma.

Così, le istituzioni centrali dell’Unione Europea, insieme con il Fondo Monetario Internazionale, hanno un ruolo importante da svolgere nella stabilizzazione e la transizione verso una crescita sostenibile. Il loro impegno è necessario per colmare il vuoto creato dalla fuga dei capitali privati, consentendo che si completino i programmi di riforma e che comincino ad avere effetto. Il ruolo del Fondo Monetario Internazionale riflette l’enorme posta in gioco che la ripresa dell’Europa rappresenta per il resto del mondo –allo stesso modo, per i paesi avanzati che per quelli in via di sviluppo: è un investimento ad alta redditività.

Tutto questo mi è sembrato fosse ben presente ai politici e dirigenti d’azienda tedeschi. Inoltre, questo tipo di supporto è e deve essere subordinato alla portata delle riforme attuate in Italia e Spagna, rispettivamente al terzo e quarto posto tra le economie più grandi della zona euro. Nel perseguimento della competitività e della crescita è fondamentale la liberalizzazione del mercato del lavoro –cosa che deve essere ancora attuata.

Guadagnare tempo affinché le riforme funzionino richiede che vi sia una socializzazione dei rischi a breve termine. Non c’è altro modo per tenere sotto controllo i rendimenti obbligazionari ed il funzionamento delle banche, e non vi è alcuna garanzia blindata che siano approvati i programmi di riforma necessari allo scopo.

È ancora prematuro parlare di Eurobond che funzionino a lungo termine perché implicano una diminuzione della condizionalità, indebolendo gli incentivi ad attuare le riforme. Ma se tutto funziona, l’attuale condivisione dei rischi non risulterà costosa alla fine. Si potrebbe anche ottenere un rendimento positivo.

Cosa ne è, allora, di questo conflitto tanto discusso tra austerità e crescita? Credo che si basa su un equivoco piuttosto grave. Per i tedeschi, l’austerità, sotto forma di moderazione salariale e di reddito, è stata una parte importante delle riforme orientate alla crescita che il loro paese ha completato nel 2006. Molto tempo e molti sforzi sono stati dedicati a garantire che l’onere considerevole di ripristinare la flessibilità, la produttività, e la competitività fosse ripartito equamente tra la popolazione. 

Ma, dalla parte che riceve il messaggio nell’Europa meridionale (e al di là dell’Atlantico), si interpreta l’ “austerità” per lo più in termini fiscali – come un modo, eccessivamente rapido e potenzialmente in grado di distruggere la crescita, per tagliare il disavanzo più velocemente di quanto l’economia possa strutturalmente regolare e colmare il gap della domanda aggregata. In altre parole, si guarda alle misure severe di austerità soprattutto attraverso una lente keynesiana.

È importante trovare il giusto equilibrio tra una modalità eccessivamente rapida di realizzare la  riduzione del disavanzo ed una pericolosamente lenta, e non è facile. Ma questa è solo una componente del riequilibrio. La crescita è essenziale per abbattere il rapporto tra debito pubblico e PIL, ed è quindi un punto chiave della stabilizzazione fiscale. È anche vero che i benefici della riduzione del disavanzo, se raggiunti troppo velocemente, saranno più che compensati dagli effetti negativi sulla crescita.

Al tempo stesso, per riavviare la crescita di un’economia ed i motori dell’occupazione, sono necessarie altre misure, anche alquanto variegate nei  diversi paesi, a causa di differenti condizioni iniziali. Ma generalmente includono la rimozione delle rigidità e delle altre barriere alla concorrenza nei mercati del lavoro, della produzione e dei servizi; investimenti in professionalità, capitale umano, e nella base tecnologica dell’economia; e la ricostruzione di reti di sicurezza in modo da promuovere e sostenere adeguamenti strutturali, piuttosto che ostacolarli.

Tali riforme richiedono il sacrificio di alcuni tipi di protezioni, così come della crescita di reddito e consumi. I vantaggi arrivano nel futuro in forma di traiettorie sostenibili di crescita ed occupazione. La disciplina ed il rigore, quindi, comportano scelte intertemporali e intergenerazionali sul prezzo da pagare ora – e come tale onere debba essere equamente condiviso - in vista di maggiori opportunità economiche e stabilità sociale nel futuro.

Dopo tutto, il ripristinare la stabilità e la crescita riguarda solo in parte il rilancio a breve termine della domanda aggregata. Si tratta anche di mettere in atto riforme strutturali e un riequilibrio, che ha un costo. Il raggiungimento di un modello sostenibile di crescita richiede scelte che non riguardano solo il livello della domanda aggregata, ma anche la sua composizione –per esempio, gli investimenti rispetto ai consumi.

Che questa si chiami o meno austerità è solo una questione semantica. Ma la confusione che ne è risultata è tutt’altro che innocua. Al contrario, è diventato uno dei principali ostacoli ad una comprensione comune delle sfide attuali, e quindi alla realizzazione di un ampio consenso sulla strada giusta da seguire –un percorso con responsabilità ben definite e differenziate.

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  1. Commentedpeter fairley

    Reply to Gary Marshall. The flaw is: the govt needs to get revenue somewhere to make payments on the pure govt debt system you propose. You have not stated what 'for profit' enterprises the govt would use the borrowed money for."Worthy public expenditures" do not imply revenue production unless they are something like toll roads, which most people consider 'a tax'. Where is my $50,000?

      CommentedGary Marshall

      Hello Peter,

      And where does the government currently get the revenue from to make payments on the government debt that exists now?

      They would get it from the same collective, though participation in that collective will vary.

      Now, the government need not actually collect the money to repay the debts. In my example, you will note that if the government were to tax the community to erase the acquired debts, the government would take the money from the community and hand it right back to the community. So in the aggregate taxing to pay off the debts in no way alters the wealth of the community. Erasing debts just erases assets.

      So, in effect, the government need never make the theoretical transfer. The money is there, however the costs in making the transfer are far greater than just letting the national assets and their equivalent liabilities rise indefinitely.

      Its sort of like a bank. Its assets in loans rise along with its liabilities in depositor's money indefinitely. The individual depositor shall see his money returned to him if desired, but the assets and liabilities will accrue forever with the bank living on the margins between interest paid and interest earned.

      To pay off every depositor would mean collapsing the bank. Why go through such trouble. One would just estimate the value of the bank and have it reflected in the share price.

      Money will be borrowed with a cost. So each public expenditure will have to be justified financially wherein benefits exceed costs. Otherwise, the expenditure is never made.

      For example, access to clean water could be accounted a worthy project with good returns. Dirty or disease laden water can cause a community grievous harm. The local hospital may be overrun with patients suffering all sorts of water borne maladies. The medical costs, lost work days, etc could be erased with a modest investment in purifying the water.

      Simple cost and benefit analysis. If the cost to the community of water borne diseases are $5 million, and construction costs of a water filtration plant $1 million with $1 million in annual expenditures, is this not a valued return to the community?

      Is it inflationary? No because the community now has $3 million per year to go and spend on other items, perhaps better healthcare, better education, a larger home.

      An idle person will cost the community or nation in welfare costs. An annuity of $10,000 would require an initial investment of $200,000 with an interest rate of 5%. If a person collects $10,000 per year, the community or nation would be better off lending funds of say $50,000 for training or education up to amend the burden.

      I hope that answers your questions.

      GM


  2. Commentedmmm bbb

    Yes, there is a misunderstanding in Europe regarding the definition of austerity and it is almost funny that nobody treated until now. (or at least I did not notice - sorry for my ignorance)

    On the other hand, growth may appear even if the austerity measures are going on, or better to say the austerity is consolidated.

    Indeed it is a fine mechanism to adjust the speed of implementing the austerity measures and the ones related with growth.

    Who should act for finding the right compromises?
    A researcher, an artist, an economist, a mathematician, a philosopher, a sociologist, a politician?

    Why is needed such a long period of time to harmonise the differences among the partners in EU?

    Greece could had a better chance, and implicit EMU, if the actions of partners were more quickly established...

  3. CommentedAl Hick

    Like other proponents of the German model of structural reform, Mr. Spence fails to recognize that Germany's success in in building a
    "competitive" economy during the 2000s was based on having counter parties who would provide the needed demand for the excess supply caused by wage suppression in Germany. If southern Europe, the U.S. and other "irresponsible" countries had not experienced credit fueled bubbles over the past decade, Germany would still be in a deep and long 10 year recession. It is essential that changes in the Euro periphery are matched by expansionary fiscal policy in Germany or expansionary monetary policy from the ECB. To suggest that southern Europe follow the German model, without addressing were the demand is going to come from is simply to wish unnecessary misery on the populations of Southern Europe.

  4. Commentedsrinivasan gopalan

    Mr Spence plea for return to simplicity by shouldering burden now so that posterity does not blame you for recklessness reeks of asking too much from a generation that is inured to comforts and free lunch. Welfare programmes as practised in some European countries without ensuring concomitant responsibility on the present of beneficiaries is unfortunately the patent reason for the current mess in some of the Southern European countries. When ailments afflict the system bitter medicine is but inevitable but people in real life do not countenance this diagnosis and the attendant treatment. The best course open to the countries mired in crises of all sorts is to make a few adjustments in life so that this phase will be a passing one before days of comfort and delight break out. What the crisis-laden countries of Europe need is a moral leadership and not economic policies that divide the people between austerity and persistence with the same level of living they had been accustomed to. Probably faith in themselves and in the ability of things to shape out to their benefit by degrees need to be nurtured so that undue expectations of a disaster can be averted.
    G.Srinivasan. New Delhi

  5. CommentedGary Marshall

    Hello Mr. Spence,

    In conventional economics you are right -- Greece has no good options. But in progressive economics, they have a very good option: the abolition of Taxation.

    Below is the very simple proof for this measure.

    If you or anyone can find the flaw, I shall be more than happy to give the reward of $50,000. None have yet been successful.

    Its not the end of the world, but a new beginning.

    Enjoy!

    ####

    The costs of borrowing for a nation to fund public expenditures, if it borrows solely from its resident citizens and in the nation's currency, is nil.

    Why? Because if, in adding a financial debt to a community, one adds an equivalent financial asset, the aggregate finances of the community will not in any way be altered. This is simple reasoning confirmed by
    simple arithmetic.

    The community is the source of the government's funds. The government taxes the community to pay for public services provided by the government.

    Cost of public services is $10 million.

    Scenario 1: The government taxes $10 million.

    Community finances: minus $10 million from community bank accounts for government expenditures.
    No community government debt, no community
    government IOU.

    Scenario 2: The government borrows $10 million from solely community lenders at a certain interest rate.

    Community finances: minus $10 million from community bank accounts for government expenditures.
    Community government debt: $10 million;
    Community government bond: $10 million.

    At x years in the future: the asset held by the community (lenders) will be $10 million + y interest. The deferred liability claimed against the community (taxpayers) will be $10 million + y interest.

    The value of all community government debts when combined with all community government IOUs or bonds is zero for the community. It is the same $0 combined worth whether the community pays its taxes immediately or never pays them at all.

    So if a community borrows from its own citizens to fund worthy public expenditures rather than taxes those citizens, it will not alter the aggregate finances of the community or the wealth of the community any
    more than taxation would have. Adding a financial debt and an equivalent financial asset to a community will cause the elimination of both when summed.

    Whatever financial benefit taxation possesses is nullified by the fact that borrowing instead of taxation places no greater financial burden on the community.

    However, the costs of Taxation are immense. By ridding the nation of Taxation and instituting borrowing to fund public expenditures, the nation will shed all those costs of Taxation for the negligible fee of borrowing in the financial markets and the administration of public
    debt.

    Regards,
    Gary Marshall

      CommentedGary Marshall

      Hello Daniel,

      What I advocate is the abolition of all Taxation. If the state retain any of it, then it is still able to control its finances and the people whom it is appointed to serve. Without Taxation, the state is forever dependent upon its citizens for its existence.

      Singapore does have a range of taxes and fees, though quite moderate compared with NA. It is also a very small country.

      Regards, GM

      CommentedDaniel Gomes

      Gary, your proposal was implemented in Singapore a few decades ago.

      The taxation base is extremely low and almost all of the credit is forcefully obtained from the tax payers via a forced savings scheme called Central Providence Fund.

      Interestingly, on paper, Singapore has one of the highest sovereign debts in the world but seems not to worry a single bit about it.

      CommentedGary Marshall

      Hello Mr. Ravazzolo,

      A pension is indeed a financial asset, a financial asset for a member of a nation, and in the aggregate for the nation itself.

      A water holding and treatment facility is indeed an asset for a community and its members. Water borne ailments can have a devastating impact on a community's productivity and health care costs. For a small investment, all that will disappear.

      Similarly with education, police and fire, and garbage collection. These are all useful services that create wealth in a community. Without police and fire, whole communities can disappear in a conflagration or riot. Insurance costs would be prohibitive without such a wise investment.

      Welfare recipients could be given loans to enhance education and training in order to make those unproductive souls productive. When employed they can pay back the loan. The annuity now comes with a great cost to the community and no solution.

      With the unemployed, a loan could be given if there are no other means available to maintain them, repayable when conditions improve.

      Government expenditure with a capital charge will change drastically. The erstwhile taxpayers now become the nation's bankers will ensure that the government now justifies every expenditure. There will be no corporate welfare. There will be no subsidies to favoured producers. Mineral rights will be handed back to those that own the land. There will be no customs and excise, or tax collection. There will be no deterrent effect from an abolished taxation. Pensions will no longer be needed as the population will now have government bonds. Publicly funded healthcare could be limited to difficult cases or for those without means because everyone should possess bonds with which to pay for them.

      What a better world it will be!

      Regards,
      Gary Marshall

      CommentedMiriano Ravazzolo

      Mr. Marshall

      Your idea is quite interesting, but I am afraid it would only work if all public expenditures could be configured as assets. In the modern world unfortunately (or fortunately) there are way too many expenses that can be categorized as "services", which get consumed at the moment of fruition and therefore do not add to the financial assets. Think healthcare, or pensions, which while contributing to the general economy do not create any bookable asset...

  6. CommentedPaul A. Myers

    A lot of metrics are thrown around in the European debate, but it seems to me the core metric is economic productivity over time. Germany successfully accomplished a decade-long productivity improvement program that put it into its enviable position today.

    Other countries have to implement productivity-converging policies or otherwise fail in some fashion.

    So I would think that changes in future productivity should be the criterion by which policy proposals are evaluated.

  7. CommentedThomas Lesinski

    ...as evidenced by the increase in poverty rate in Germany from 11% in 2001 to 15% today, despite the increase in employment.

  8. CommentedThomas Lesinski

    Is there a single point of hard evidence towards the idea that labor-market flexibility is favorable to growth ? Or is it just a talking point taken for granted by the high priests ?

  9. CommentedRussell Pittman

    A related point is that made by an earlier Nobel laureate, James Meade, in the "burden of the debt" debate: A policy with a given level of fiscal stimulus has a much different long-term impact depending on what the stimulus money is used for. In that light, spending borrowed money on improving infrastructure or strengthening tax enforcement has a lot to recommend it as compared with, say, funding military adventures or propping up unsupportable pension schemes.

  10. CommentedMatthew Cowan

    I'm glad to see that someone has broken the austerity vs. growth argument down into its component parts. This is where we can make a real difference in improving economic outcomes.

    The larger debate of stimulus vs. fiscal austerity too often overshadows the component parts and execution of a particular stimulus or austerity plan. Done correctly, either can be an flying success or a dismal failure.

    The debate needs to move beyond stimulus vs austerity to how to stimulate and/or cut back spending effectively and how to effectively time austerity and/or stimulus measures to optimize the outcome.

  11. CommentedRobert Winter

    The writer states "But, on the receiving end of the message in southern Europe (and across the Atlantic), “austerity” is interpreted largely in fiscal terms – as an excessively rapid and potentially growth-destroying drive to cut deficits faster than the economy can structurally adjust and fill the gap in aggregate demand." It would have been of interest had he address whether in his view the terms that have been imposed to date on Greece and other countries reflected the balanced burden sharing he suggests or excessively rapid and growth destroying policies. As best I can tell, the better argument is that at least to date it has been the latter.

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