Like Germany, France and Spain, Europe's big but highly indebted economies, Italy is in a serious fiscal bind. The EU stability pact says that member-countries' budget deficit should be no more than 3 percent of their GDP. For the past few years, habitual violators include Italy, France and Germany.
This year, Italy'y deputy finance minister, Vincenzo Visco, was reported* to have said that the country's deficit could be more than 4.5 percent of GDP, much bigger than earlier forecasts.
Like many of its neighbors, the expensive cost of generous welfare system makes the expenditures bloat to sizes.
The cycle of (1) high and multiple taxes (2) to finance generous welfare system, sometimes (3) make many productive citizens and entrepreneurs reduce working if not leave the country, (4) resulting in huge budget deficit and government borrowings, (5) resulting in higher debt payments, further bloating of the expenditures, and you need (1) high and multiple taxes...
You reduce personal responsibility and assume more "collective" and government responsibility, you encourage the emergence of more subsidy- and welfare-dependent people, while discouraging more self-driven and ambitious people.
* See: "Italy warns of growing budget deficit", May 23 2006
Light Fines in a Welfare State
A teenager with no criminal record just went on a stabbing rampage in Berlin, Germany, May 26 evening. He stabbed 35 people randomly, 6 of whom needed emergency surgery. The police caught him and charged with 24 counts of attempted murder, and could face a youth sentence of up to five years in prison, according to a report in the Financial Times today, http://news.ft.com/cms/s/71bce60c-ee64-11da-820a-0000779e2340.html.
This man from a poorer economy asks, "5 years imprisonment only?" I can't believe that after attempting to harm and kill as many people as he can, he'd get only 5 years in prison? If that thing happened here in the Philippines, that guy when caught by the public would be a mutilated body if not a dead meat before the police could get him. Stabbing and attempting to kill people randomly is the mind of a sick and deranged person; he does not deserve to live another day.
Sure, Philippine laws will also give some consideration and protection to teenage criminals. I do not know how many years imprisonment a Filipino teenage criminal would get if he did the same act as that Berlin teenager. But chances are, the public will get the boy first even the police could find him, and public anger is more spontaneous and more fierce than government laws would impose.
If I am a family member of one of those 35 people randomly stabbed, I would ask the Parliament why the fines are so light and non-intimidating to other potential criminals. Sure Germany is a welfare state, but the welfare and protection should not be extended to deranged people with clear and explicit plans of harming and killing other people.
* See also: Welfarism 3: Spiraling Costs and Rent-Seeking, April 24, 2006