Yes the global economic crisis is still governing our minds and while some governments have taken the necessary steps to rejuvenate the economy some only issue bold and reassuring statements, but actually does not do anything. Granted not all countries have the necessary amount of additional money to inject into the economy, but there are always other ways.
Of course not every country is able to invest huge amounts of money into their economy like, for example, China, but nonetheless there are several economic tools which can have a positive and rejuvenating effect on the economy. Let’s take a look at the taxes. Many markets have crumbled and companies have a very hard time to sell their goods. Huge tax burden does not help either and so to cut expenses they have to downsize by letting go employees and thus decreasing their economic activity. The decreased economic activity on its part hampers the overall economic recovery. The best way to fight the economic recession is to drastically decrease such taxes as Income and VAT. While at the beginning it will surely decrease budget income, but as economic activity will increase, due to the lowered taxes’’ so will the income. Sadly many government officials do not see this way. Quite opposite, they are planning to defeat the crisis by increasing income with a substantial raise of taxes. Any half good economist will tell you that this is the most foolish action you can take in such a situation. Nevertheless government official still think that they are smarter than any professional of the field.
We need some drastic moves to be maid to overcome this recession, but these steps must be carefully researched and debated over. In order for any of them to work they must receive acceptance from the general population. Let’s hope that government officials will listen to the voice of reason.
