The New Economy: less state, less taxes and fairer wealth distribution

Shalom and Happy Yom Ha´Aztmaut first of all !.

The New Economy proposal or Public Choice economy proposes to have a revamping of the state as we know it.  This has arisen as a result of the disastrous public finances of several big countries including the USA with its sky-rocketing debt.

If we analyse the present situation we can see a fairly common pattern in most OECD countries.

1. A huge public debt which is spiralling out of control ( USA, Spain, and France for example )

2. A huge public sector which many times just keeps bureaucracy increasing with more laws and by-laws to keep working on sometimes silly facts which politicians believe need to be legislated especially in semi-federal states such as Spain.

3. A commonly misplaced idea that more public spending means necessarily better results which is, in many cases a lie.  V.g. in the several PISA reports on eduaction of 14-18 year olds issued since the 90s, the UK and Spain have increased their public spending on education exponentially and as a percentage of GDP but nevertheless have very average results.

4.Many times, civil servants, trade unions and political parties subsidise useless political projects  to get their votes going even if they have little benefit to the community at large.  The case of savings banks in Spain and in Germany proves the case.

To correct or even make thses symptons dissapear the Public Choice school from the USA advocates free choice, less state, less taxes and by extension a just distribution of wealth although not pinpointed exxactly how in their opinion.

Politicians need to realise that this new paradigm will be the only way to make countries grow in a correct and sustainable way although economic crises will continue to exist as we live in a ever interdependente global world.