Economic advice from a most unlikely source

[JimmyRopes]

Last week, in advance of the Gang of 7 (G7) meeting in Rome yesterday, Giulio Termonti, Italy's finance minister, gave a review of the Obama administration's stimulus package in the Corriere della Sera newspaper, "If the problem is an excess of debt, the cure is not adding more debt, whether that debt is public or private". This advice from the finance minister of one of the most indebted countries in Europe! I thought this was a strange place to be getting financial advice since the US debt is approximately 40% of the US GDP while Italy's debt exceeds Italy’s GDP. I am not saying that 40% debt is good or that the stimulus package will actually stimulate the US economy but shouldn't he be practicing what he is preaching at home in Italy?

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[Lost User]

But consider that Italy has not been known for political stability. Just look at the number of General Election that Italy has had since end of WWII. Without political stability, how can you achieve Financial stability? - you can't is my opinion.

[JimmyRopes]

Richard A. Abbott wrote:

But consider that Italy has not been known for political stability.

Regardless of the cause it just seems ironic that a finance minister of a failed economic system is giving financial advice. :doh:

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[Christian Graus]

just because he's not doing it, doesn't mean he doesn't know he should.

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[JimmyRopes]

Christian Graus wrote:

just because he's not doing it, doesn't mean he doesn't know he should.

Point taken, but it would just be more credible if he was actually doing more at home.

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[Christian Graus]

Oh, of course. It proves he's a hypocrite, but it doesn't prove he's wrong.

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[JimmyRopes]

Christian Graus wrote:

It proves he's a hypocrite, but it doesn't prove he's wrong.

I never said he was wrong. I was just commenting that it was an unlikely source of economic advice.

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[Lost User]

Jimmy, I appreciate that. But, one of the most fundamental aspects of any government is the collection of taxes etc and the proper processing of government revenues and that means clear fiscal policies. And to have a government that lasts a little longer than a year or two requires stability. When you change horses mid-race it is hardly surprising that nobody really knows which direction to head. And thus, financial management is incompetent. However, with Italy a member of the Euro club, certain disciplines are enforced from Brussels. But you are right, a strange source of financial advice.

[JimmyRopes]

Giulio Termonti is very outspoken. He does have some good ideas but I doubt if he will be allowed to incorporate them in Italy mostly because of what you are saying about churn in the government and also the pervasive hold of organized crime on so many aspects of Italian society.

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[Marc Clifton]

Richard A. Abbott wrote:

Without political stability, how can you achieve Financial stability? - you can't is my opinion.

Given that we have elections for prez every 4 years here in the US, I'd say we don't achieve political stability either. :) Marc

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[Rob Graham]

Looking at the average longevity in the Senate, I'd have to disagree...

[Lost User]

Second "lame duck" term notwithstanding :) The USA Presidential System, with the exception of successful impeachment, is more stable than a system of parliamentary "confrontational style" democracy as practiced in many European countries. UK for example, if the government fails in a "motion of confidence" or "budget debate" then the Prime Minister must tender his/her resignation and a General Election must take place irrespective how far into the 5 year term of a government.