Tilting At Windmills
Spain’s Rajoy has promised income tax cuts in 2015, so half a cheer for him for at least talking the talk. But will he walk the walk? Perhaps more credibly, the Finance Minister would only say that he is not planning a VAT rise “for now.” If they weren’t politicians, they wouldn’t even begin to consider lowering taxes at this moment in history: the deficit for 2013 was probably just over 6 percent, while debt was 84 percent of GDP in 2013 and is expected to rise to 94 percent in 2014. While these figures aren’t as catastrophic as those for Greece (and Italy’s debt stands at 135 percent of GDP and rising), they are quite frightening. What they ought to do, of course, is to cut public spending, even though that would increase already massive unemployment (26 percent). But you must be getting bored of hearing me say that governments should cut spending, not because I’m wrong, but because it’s flogging a dead horse. Of course what I really want to say is that they should leave the euro, but that is even less realistic: even Don Quixote stopped short at tilting at windmills. Not that it’s in the hands of the Spanish Government in the first place – it’s the Troika, stupid. And the only medicine the IMF knows about is an ointment called “taxincreases.” That’s why the Finance Minister is dutifully considering a VAT increase: rub on all over areas of exposed skin, it says on the tube, and wait. If the patient hasn’t expired after three months, repeat the treatment until death occurs.