Spending like the Nordics, taxing like Americans (68)
Autors: Mortens Hansens
Publicēts: 2010. gada 2. februāris 10:14
Atslēgvārdi: , , , , , .
x

Nosūti raksta adresi draugam.

I know I have used this sentence before but it is a good one. It was used in despair about the Latvian economy by a friend of mine from the IMF.

Much to my surprise I still see arguments saying that Latvia should stimulate the economy. I thought that it was entirely obvious that there are no means with which to do that but apparently not.

So here are some of the numbers that hopefully make it clear. It seems that too many are oblivious to the existence of a government budget constraint.

Below in Figure 1 is Latvian GDP in nominal prices i.e. in lats. It can be seen as the amount of income available for taxation. It is decreasing rapidly due to negative economic growth (less is being produced) and will decrease further due to deflation i.e. the fact that what is produced is starting to cost less. Raising a given amount of tax revenue will thus require higher tax rates. Maintaining given tax rates will result in a lower level of tax revenue.

Fig. 1: GDP, quarterly, 2005-I – 2009-III, mill. LVL, current prices

Fig. 1: GDP, quarterly, 2005-I – 2009-III, mill. LVL, current prices

Data from the Central Statistical Bureau, www.csb.gov.lv

We know that some taxes have been raised (income taxes and VAT for instance). But as Figure 2 shows there seems to be a constant/slightly declining share of tax revenue as compared to GDP. This could indicate what everybody speaks of, namely, a larger degree of tax avoidance (more envelope wages etc).

Fig. 2: Tax revenue as a share of GDP, quarterly, 2005-I – 2009-III, mill. LVL

Fig. 2: Tax revenue as a share of GDP, quarterly, 2005-I – 2009-III, mill. LVL

Tax revenue is some 30-35% of GDP any public spending. Anything more is what causes a budget deficit. Spending is indeed higher (as is shown in Figure 3).

Fig. 3: Public spending, quarterly, 2005-I – 2009-III, in % of GDP

Fig. 3: Public spending, quarterly, 2005-I – 2009-III, in % of GDP

Without the IMF/EU package spending would have to equal tax revenue (assuming that Latvia would be unable to borrow elsewhere). This means that without the package even deeper cuts would have had to be undertaken or even larger tax increases would have had to be introduced, in both cases strangling the economy even more.

Latvia can manage to overspend only because of the cheap loans from the IMF, EU and other lenders.

Yes, cheap – the interest rate is much less than half of what Lithuania pays to finance its budget deficit (some 2-4% against 9-12%)

But – hey! – what are those spikes doing in Fig. 3 in particular for the 4th quarters of 2005 and 2006?

In the latter case government spending almost reached 50% of GDP. A very Nordic level indeed. The increase over the third quarter was around 60% in lats terms.

60% more for what? Well, look at the previous quarters of 2006 and compare with the similar tax revenue columns from Fig. 1.

Such a comparison shows that Latvia was running a budget surplus through the first three quarters of 2006, a windfall surplus due to the high growth at the time and a surplus which, instead of ending up as a budget surplus that could provide a cushion in less fortunate times as in Estonia, just had to be spent… On bonus payments, for instance!

A testament to the ultra-procyclical and irresponsible fiscal policy of the time – and the main reason why a stimulus package could not be enacted when recession struck. The money was already spent.

Spending was indeed (almost) Nordic at some times but taxation never were. No one loves taxation but Latvians are famously anti-tax and with low tax rates tax revenue will be low and spending will be forced to be low creating some sort of minimalist state. The country must reconcile its wish for public services with its unhappiness to pay for them via taxes – i.e. realize that there is a budget constraint.

But – and this is my final point – with the kinds of excessive spending I mentioned it should be possible to make some serious cuts, shouldn’t it? The budget trouble is mainly a result of the public sector party of the fat years.

And just to pre-empt a few potential questions:

1) Can Latvia borrow elsewhere? Possibly now but at a high interest rate. I am dead certain Latvia had no chance to borrow to finance its budget deficit at the height of the financial crisis a year ago.

2) But I cannot recommend borrowing from China as MP Kabanovs seemingly (?) suggested recently. I mean, which strings would be attached?

3) Could the proper amount of tax revenue not be raised via more efficient tax collection? I am quite sure it could, but this has failed not just in the past year, but in the past 18 years or so. Tax avoidance is just omnipresent.

x

Nosūti raksta adresi draugam.

(34 balsotāji )
Komentāri

So we should spend less. We are not able to sustain welfare state. Every country needs time and discipline of private business to grow people who can create welfare state. Too much government spending early only spoils people.

Latvia is still socialistic, liberal (USA definition) , state controlled economy that has long way to go to become a competitive democracy. There is not a SINGLE conservative(USA definition) party in Latvian politics, so far.

Spending like the Nordics, taxing like Americans, stealing like the Russians

Latvia never had the chance to spoil its people. The spoilers were a given and decreasing social luxury is a pain even in Latvia.

I.e. reorganizing hospitals in a way that would match population density and spread results in protests. Reorganizing schools to fill half-empty classrooms results in protests. Trying to maintain teacher wages, by decreasing teachers-per-student and increasing contact hours for remaining (less money on less heads) failed in protests claiming the desire to take less money on same amount of heads.

There are numerous other cases as this. And its not the fault of policy, but rather the fault of lacking communication, argumentation and thinking processes through.

Sometimes spending on subsidies and other payments are too easy given into. Same for claims of doctors/nurses to the desire of being better paid. All of which is required to maintain the existance of some part of population and accepted by society at the time of need – yet nobody is ready to face the bill at the end of the year.

If tax avoidance is omnipresent and with quite real reasons to believe that there is large scale corruption and very heavy public service burden no budget what can be done now?
This public service is the only service Latvia has and Latvia needs healthcare, education etc. , and people working in public service need those jobs, people working in all kinds of governmental departments pushing papers form one office to other and back need their bureaucratic jobs ineffective as they sadly are to make their living. These people are likely not very valuable in free market + free market is not likely to provide not by far enough jobs.
So basically this article proves that Latvia is stuck. Well we knew that all right. Didn’t we?
Does anyone have any idea what action can be done to accelerate recovery?
And obviously governments’ hands are tied on devaluing currency, cause it would “bail out” business owners a little, for a little while, but would the business really cope with unemployment and grow enough to get Latvia moving again? Business in Latvia has not shown a great potential of entrepreneurship or production of valuable, marketable goods. So besides devaluing and national-socialist state – any ideas?

CD, uz jums Valsts valodas likums neattiecās?

6.

usi ķusi :)

7.

Kur tad te ir pārkāpts Valsts valodas likums?

The flaw of the system was indeed the fact that public institutions had to spend their entire budget by the end of the year. Otherwise they would not get required financial means for following year. So if you manage your money effectively and save it you get punished. If you spend it all “you are a good planner”. So here we are.

Our problems will persist as long as we/Latvians will be having double face moral – WE who are the good ones and actually the victims of EVEL THEM, i.e. THE STATE. But who represents THEM? The dividing into us and them/state/alliens gives a nice excuse for us to act same way like before and to go with the mainstream and support widespread corruption which is not observed in classical shape like in Nigeria but still has taken over all our country.
Thinking like this we have supported brood of scoundrels coming to the power and what is most sadly – we have obtained a pauper’s psychology.

What can be done? First step – please start reading economic and ethical pre-election programs of the political parties and don’t be afraid to ask them simple questions with childish directness.
Secondly – please read internatonal papers, get as much alternative informaton as you can.

Finally – love your kids and love your country as these are only things worth to fight for :)

Viss jau pareizi it kā. Valdība tērēja mežonīgu naudu, bet atdeves faktiski nebija. Atdeves tādā ziņā, lai nodrošinātu ilgtspējīgu un produktīvu IKP nākotnē. Tā vietā ierēdņu bari aizvien paaugstināja sev algas, palielināja štata vietas un sacentās, kurš vairāk neaizpildītās štata vietas dabūs sev.

Ir jau taisnība, ka ekonomikas sildīšanai valstī naudas nav. Vajag vai nu aizņemties vēl, vai nu palielināt nodokļus uz to rēķina, kuri tos maksā, vai arī pacensties nodokļus iekasēt labāk un arī no tiem, kuri līdz šim nemaksāja.

Bet nav jau šajā valstī gudra cilvēka, kurš varētu izkalkulēt to vienu pareizo ceļu, pa kuru Latvijai turpmāk iet, kādas sviras izvēlēties. Kāda jēga taisīt vēl kādus aizņēmumus ekonomikas sildīšanai, ja neviens nezina, kā tad nu viņu sildīs. Domājiet, ministriju pamuļķiem būs prātīgas domas? Tiem stulbeņiem, kuri vispirms deklarē dienesta auto aplikšanu ar nodokli un tikai pēc tam domā, kā to darīt un ko tas vispār dos?

Valsts sektors ir samazināts kardināli. Bet palikušo pienesums ne par matu nav uzlabojies. Jo nav strukturālo reformu. Bet reformu nav tāpēc, ka ir jocīga Valsts kanceleja, un Dombrovskis nesaprot, ka jāmeklē cits kantoris valsts pārvaldes reformai.

Pareizi, tērējam daudz, bet nodokļus iekasējam maz. Un pat tos, ko iekasējam, tērējam stulbi, neliekam attīstībā. Mums vispār nav attīstības, tāpēc jau nav arī jēgas tajā guldīt, pat ja nauda būtu.

Nu, kur ir gudrie ekonomiskās attīstības prāti? Kur ir partiju programmas šīs stulbās stagnācijas pārvarēšanai? Varbūt savāksim tādus kā Mortens, samaksāsim un lūgsim uzrakstīt? Ko, Kampara kungs, Rimšēvica kungs? Visus tos LB superanalītiķus varētu aizlaist uz pusgadu apmaksātā atvalinājumā Havaju salās, lai ļauj prātiem strādāt un nejauc gaisu.

Šķēle laikam patiešām būs palicis vecs un nespējīgs. Atceramies viņu jaunības dienās – stalts, iznesīgs, miesassargi apkārt, padomnieku bars pilsētas ielās lielījās paziņām par piedrību SIA Latvijas Republika, pats klubos tusēja, ar augstiem ierēdņiem sarunājās, Jauno Akademiju izveidoja.

Tagad ir pļurkš. Pārstāvji Saeimā tādi, ka uz viebumu savelk. Plāna nav. Nomainījis jūgenda fīreri, par Ekonomikas ministru jau iecēlis. Nu, zinu es to kadru. Labs atstāstītājs, teicams svešvalodnieks. Bet kur, Mārtiņ, ir ekonomiskā programma? Tagad ir tik ideāls laiks uztaisīt valsts ekonomiskās attīstības programmu uz lata devalvācijas pamata, turklāt tur patiešām varētu labi sanākt. Bet klusums. Laikam gaida, kamēr Lembergs ideju paņems sev. Nu labi, Lembergs lai ņem. Bet ja Šlesers pakamps, tad gan man izlietni nāksies meklēt.

Laikam Šķēle ir apjucis. Vecie Saeimas vēži ir tur, kur nu viņi ir (neizteikšos). Spējīgākie līdzgaitnieki pabēguši prom. Cerība vien uz jaunajiem. Tie nahļebņiki, kas meta karodziņus miskastē, nu ir patriekti. Savākta jauna blice. Bet nekādu pazīmju, ka kas kustētos cerīgā virzienā.

taču skaidrs, ka tikmēr, kamēr budžets izdevumi tiks samazinati (tas ir vēl kādus gadus piecus vismaz) ekonomikas sildīšana vienkārši nav iespējama, jo tā nozīmē gluži pretējo – budžeta izdevumu palielināšanu. var runāt tikai par mazāku dzesēšanu, ja nu kādam dikti gribas.

13.

“Abandon all hope, all ye..” Yes, we are stuck. Stuck with the worst downturn in Europe (will Greece rob us of the laurels?), budget constraints, with the current governmental thinking – dumb and helpless. Simply to sit out the crisis? Impossible without inflicting deadly wounds on the country and people! I would appreciate very much if Mr Hansen, instead of pointing his finger at us (”You, talking of stimulating an economic recovery…Indeed!”), should use his superior knowledge to outline his views on a realistic way out. Taking into account that curtailing the public sector still further would add many newcomers to the already vast army of jobless people, as the present-day Latvia cannot create meaningful (helping towards recovery)jobs for the curtailed persons. If it could…Yes, that would mean a real chance for them and the country.Now – only degradation or emigration.

These are the wounds I am speaking of. Because, as Mr Hansen has pointed out, there is no money for starting a recovery. So economic disaster triggers a social disaster.

Yes, we are in a terrible situation. But that we know already for some time, no need to rub it in again and again. Let me repeat – propose a way out?

What’s the reason to do anything here, while those who still pay taxes get pressed and punished, but those who don’t have no problems at all. I have no incentive to work more and to earn more because I’ll be stripped anyway.

Morten – many thanks for your short, but indepth blogs. They share light on many issues. I guess your blog might have been even better, if placed before the famous Skele vs Domburs TV battle – just to ask to explain on how on earth every 4th quarter of each year during last many years (where every main party was in the power, including TP) the state has such a spending need.

@ Valdis K.

My less than superior knowledge leads me to believe that there is no easy way out. No easy stimulus as pointed out, although I am sure that as the election campaign gains momentum, more and more ‘miracle cures’ will be invented… And this is where I hope the electorate will not be conned.

But the issue of whether it will be a slow return to low growth or a more brisk recovery is worthy of analysis as the answer to it is not obvious right now. I am personally leaning towards the former since so much deleveraging has to take place.

That said, although the times are dire, one should still bear in mind that what looked like a very possible scenario a year ago: Default, currency collapse etc. did not happen – the IMF/EU plan together with some reasonable politics ensured that.

Valsts sektors ir samazināts kardināli. Bet palikušo pienesums ne par matu nav uzlabojies
___________________________________________
Bet sliktāk arī nav palicis, var būt samazināt vēl, tā kārtīgi, kamēr jūt, ka sākt trūkt.

Šodien Ministru kabinets tā arī netika vaļā no diviem komisāriem-liekēžiem, Pēterkopfa un Jonīša.

Protams, uzturēt divas paralēlas pārvaldes struktūras- ierēdņu un partiju komisāru- ir ļoti dārgi.

Komisāru institūciju vajag likvidēt. Ar vienu griezienu. Tauta pat nepamanīs, ja nu vienīgi labumu no ietaupītās naudas.

aiduontanderstend

Tur nevajag zināt kodolfiziku, lai saprastu, ka publiskos tēriņus tieši un vienīgi rada nodokļu ieņēmumi vai aizņēmumi (obligācijas, kredīti). Protams, neviens nav tik spēcīgs, lai pateiktu – eu, Latvju bāleliņ’ ja nemaksāsi nodokļus, par autobusa biļeti maksāsi 3 latus, ielas tīrīsi pats, un bērniem matemātiku mācīt arī. Visi lieliskie Latvijas iedzīvotāji lād tikai valdību par augstiem nodokļiem, un ka viņi lien iedzīvotāju kabatās.. Jocīgi, ka viņi nav iedomājušies ka valsts kasē nav burvju vērdiņa, kas pats sevi replicē.. Vispār jau nauda ar ko uztaisīt “jumpstart” ir!! Bet tad daļēji jāaizmirst par sociālajām garantijām – kā būtu ja visas pensijas, kas ir lielākas par 200 LVL mēnesī izmaksātu obligācijas, bet to visu apvienotu ar nežēlīgu nodokļu iekasēšanu.. Iespējams par pirmajiem pārpalikumiem ieviešot obligātu privātpersonu ienākumu deklarēšanas sistēmu.. Domāju, ka pēc pusgada IKP nokristu par kādiem 20%, jo atbirtu kaudze ar “uzņēmumiem” un uzņēmējiem, kas ir izvēlējušies Latviju tieši “pretīmnākošās” nodokļu nemaksāšanas politikas dēļ, taču pēc tam būtu tāds uzrāviens vai vismaz vieta un finansējumiem potenciālajiem uzrāvējiem.. Un galvenais, ekonomika jau no tā tieši neciestu, tas 20% kritums būtu tikai mazumtirdzniecībā.. faktiski būtu iecirsts kājā kārtējiem importētājiem, kuri jebkurā gadījumā ekonomikai neko labu nav atnesuši.

what about china and strings? what could possibly be attached

In context to this blog.

“Saskaņā ar Valsts kases operatīvajiem datiem par valsts budžeta izpildi šī gada janvārī valsts konsolidētā budžeta finansiālais pārpalikums sasniedza 61,9 miljonus latu – valsts pamatbudžetā ieņēmumi pārsniedza izdevumus, savukārt valsts speciālajā budžetā izdevumi bija lielāki nekā ieņēmumi.

Valsts pamatbudžeta ieņēmumi janvārī bija 273,6 miljoni latu, savukārt izdevumi – 210,0 miljoni latu, līdz ar to valsts pamatbudžetā izveidojies finansiālais pārpalikums 63,6 miljonu latu apmērā. Savukārt valsts speciālā budžeta ieņēmumi janvārī bija 98,7 miljoni latu, bet izdevumi – 100,5 miljoni latu, līdz ar to valsts speciālajā budžetā izveidojās finansiālais deficīts – 1,8 miljoni latu.”

Sakarīgs teksts, uzskatāmi piemēri un paskaidrojumi. Var just, ka autors pazīst drēbi, tas ir, prot populāri paskaidrot, jo ar to taču pelna sev iztiku. :)
Skāde tikai, ka atkal svešvalodā. :( Es jau sapratu, bariņš ar pielīdējiem, kuri izmanto katru mīļu iespēju nozīmēties skolotā cittautieša priekšā ar savām anglenes zināšanām arī, bet kāds no tā labums plašajai latvju tautai? Tiem daudzajiem, kuri lasa, klausās un saprot pārsvarā tikai latviski un arī nedaudz krieviski?
Pareizi! Nekāds! :( Jo šie cilvēki rakstus par ekonomiku bieži vien pat latviešu valodā pilnībā neizprot, kur nu vēl svešvalodās! Tikpat labi Mortensena kungs varēja hindu vai japāņu valodā šo blogu uzrakstīt (esmu pārliecināts, ka arī tad atrastos kādi pielīdēji-komentētāji, kuri censtos šais valodās, ko lišķīgi saldu nodūdot)! Praktiska labuma Latvijai no tāpat nebūs nekāda! :(

24.

Cik precīzi, žetons!

Nota bene!
CD, cieniet savas lapas apmeklētājus, šādiem tekstiem līdzās jābūt tulkojumam valsts valodā!

Well done. I believe to win next elections one should manage to a) sell these numbers to general public. And b) instead of promising “the magic plan” (that no one is going to believe in anyway) one would need to exploit “ask not what your country can do for you – ask what you can do for your country” properly.
(a) would level opponents (oligarch parties), (b) would deliver what masses expect – “there is no easy way out – lets have someone to organize us and get us out of the misery by means of our own hard work”

Es nebrīnītos ja sorosisti drīz vien pieprasīs angļu valodu kā otro valsts valodu.Latviešiem bieži vien pārmet,ka ar krieviem sarunājas krieviski.Šie komentētātāji nav labāki par krievu
tanku bučotājiem.

Latvia’s problems that totally disturbs development of country:
1)Corruption in the highest levels of government.
2)This corruption leads to establish wrong and not progressive tax politics but taxes which are usefull only for rich class.
3)Corruption in justice.Justice works for corrupted government and their “friends”.Only “pickpocket is sent to the jail but big thiefs are honored with good jobs position etc.

Simple rule of gOvernment:If you cannot be good, be cheap!

Mums katastrofāli trūkst loģikas un veselā saprāta gandrīz ikvienā valsts/pašvaldību birokrātijas sfērā.
Ir bezjēdzīgi stingras prasības pret darbadevēju, līdz ar to riskē nekaunīgie pārkāpēji, bet mērenie atturas iet biznesā. Ir sanitārās normas un noteikumi, kuri bieži vien izvirza krietni stingrākas prasības kā citām ES dalībvalstīm, un atkal biznesā dodas tie, kas jau sākumā nemaz necenšas tās ievērot. Ja valdība saprātīgi atceltu vismaz daļu lieku, pārspīlētu prasību, to varētu uzskatīt par soli ekonomikas stimulēšanai.
Varbūt var energoefektivitātes kampaņas ietvaros palaist reklāmu ar moto: aizverot kāpņu telpas durvis, tu ietaupi arī savu apkurei paredzēto naudu :)

>pmlks
‘Sakarīgs teksts, uzskatāmi piemēri un paskaidrojumi.’
Tas jau arī ir praktiskais labums Latvijai. Makroekonomika, tāpat kā gravitācija, darbojas neatkarīgi no tā vai to saprotam vai ne.
Toties sviras šobrīd atrodas to ļaužu rokās, kuri komunicē angliski un visu te rakstīto saprot.
P.S.
Kurš no nikiem varētu būt M.Hansenam atpazītams kā bijušais skolnieks?

Morten Hansen, the one who preaches ar SSERiga to students should not give up on Latvians paying taxes. The piont is, the shadow economy really got going just after in one night it was decided to raise the VAT by 3%. I speak from a micro point of view, but from here it seems that people would be willing to pay taxes as soon as they get wealthier.

Piedodiet tiem, kas neprotu angliski – bet esmu anglis un esmu noguris:

OK Morten, a couple of things from the point of view of a taxpayer running a small business, who also has a few dependents (kids, pensioners – that sort of thing). Be aware that the following may be a little subjective and consequently differ from ooo, let’s say that of a Scandanavian academic with no dependents receiving a salary not dependent on the health of the Latvian economy.

1: From where I am, the conditions the IMF are insisiting on will result in less tax revenue. Rises in taxation will lead to more tax avoidance, resulting in a higher competitive advantage to tax avoiding firms. Furthermore, cuts in public spending – especially salary cuts for low income earners wil result in even less disposable income (and tax avoidance as a necessity – not as avarice). The shrinking of the economy (the chain of bankruptcies is beginning to affect even well-run businesses) will result in an exodus of wage earners (if you have a mortgage and a family, you have to leave = tax paid abroad = less revenue = budget deficit).

2: The loan may be low interest, but it is predominately going to the financial sector (1,2 billion to Parex + 800 million as a drošibas spilvens that may or may not be used). This raises an interesting ethical question. It seems a little unfair that a taxpaying mortgage holder should not only have to pay the mortgage but also have to pay the mortgage lender via taxation so that that mortgage lender can pay its creditors.

If you are an objective economist, I would appreciate a more thorough examination of the effect the IMF measures are having (the good and the bad), as well as that of an ethical analysis of the nature of the borrowing (ie who pays? who benefits?).

As for what to do? Well I am not an economist, but I think some hard bargaining with Parex creditors would do for a start + I would, if it is possible, try to drive a hard wedge between the EC and the IMF. A period of leniance (ie less severe conditions) would help stabilise the downward spiral and ultimately do more to achieve a balanced budget.

Labi pietiek..

33.
Matīss Zarkevičs > John
2010. gada 2. februāris, 23:29

The questions you give, while totally valid, are useless in this situation – good and bad effects of the IMF loan, who benefits, etc. Latvia is simply in a situation where, even if we got some of those answers, we couldn’t change anything in our position, because we’re, as Hansens put it, stuck!

And I agree that “Rises in taxation will lead to more tax avoidance”, but is that really a reason to avoid higher taxes? That just means running away from the problem. What we should do, is enforce the paying of taxes a lot more! Or, better yet, show that the taxes are not being spent on some financially unstable Libraries, Concert Halls, but are being used on health care and education.

The real problem is that a whole spectrum of processes leading up to the economic collapse, some still continuing (depraved corruption, such as the Childrens’ Hospital example), have completely destroyed trust in the political process and parties. It makes no sense to pay taxes to be squandered by fools, and it is relatively easy to move someplace less than three hours by air from Latvia where society is run better, and even much higher taxes are collected and returned in the form of good education, health care and social order (Sweden, Denmark).
So what I see for Latvia is a decade of stagnation, pushing the country into a kind of semi-permanent backwater of the EU, on constant, at best, low-level life support. Outside Latvia, a diaspora of up to 300 000 Latvians contributing entrepreneurship, skilled labor, whatever, to such countries as Ireland, Britain, to a lesser extent, Scandinavia. Like other diasporas with wounded homelands, they will be part, not of a solution, but at least a way of keeping the “old country” above water with remittances, visits and the like.

35.

Point partly taken, but I think it is always worth putting these questions – especially regarding the loan to the financial sector.

As for your comment about running away/avoiding tax: Matīss, I suspect you are (un piedod par šo – man laikam nav tiesības šo apgalvot) not facing personal bankruptcy and wondering how you are going to pay the bills, pay the mortgage, feed the kids. Most of us who started a family, bought a flat etc in the last 7/8 years have little choice but to leave or face a lifetime of ever-mounting debt – I guess we are the unlucky generation and get what we deserve, but..

I hope, however, in the future (and ‘hope’ really is a senile word in this context) we see progressive tax system with the money being spent on essential public services. The trouble is (and this goes back to my useless question) we will be paying back a lot of whatever tax revenue we do produce on loans (taken out predominately for the good of the financial sector) – and it really is worth asking questions about those that benefit from this and those that pay.

How we can solve Latvia’s problems that everything is secret here!!! Parex =secret, Airbaltic =Fliks = secret….why so many secrets in Latvia? We can easy make good laws, right tax politics etcetera but there is one big obstacle -our Saeima have no will for that.Saeima depends of oligarhs.

37.
Matīss Zarkevičs > John
2010. gada 3. februāris, 00:28

The reality of the situation is quite harshe. And while I do not have the financial burdens you mentioned (except a student loan), I myself am moving away from Latvia in a while, partially because of what is going on – I can’t take it. :)

In all honesty, there is nothing I can say that would make your (I understand you were talking about yourself) situation more easier or give any pointers as to how we should save our economy, but I do understand one truth – as a nation, Latvia is in a state of infancy – we have yet to realize the world around us and how it works. And how we define such a situation doesn’t matter, because that can only change in time.

The best, everyone of us can do, is try and survive this period.
Sorry, to be so pesimistic, but try and think about it this way – a lot of people gave their lives so we can live on our own, so, in perspective, things could be worse! ;) Now we just have to LEARN to live on our own…

Latvia’s nation/people have totally lost trust to government. Last 20 years demonstrated and proved that all parties are the same,the same bad. We people can discuss, advice, think,but….nothing changes.No body “there” hears us…Long time ago people adviced and asked for “progressive tax”, for 0 declaration, for right tax of property…but what we got? Only high taxes for low incomes.

39.
Matīss Zarkevičs > meitene
2010. gada 3. februāris, 00:47

While, I understand your feelings, there is something we can do. Just look at countries like France or Greece – as soon as there’s something they don’t like, they protest and not just by writing angry comments or singing in a public square…. they go out in the streets and demand the things they want!
I believe that is the way things should be. Because right now the political parties have a choice of two sides – the people or their “investors.”
A protest sends a clear message to those parties – either choose us or you are OUT of politics! That, of course, is only valid when the people actually THINK about who they are voting for – a missing part of the political process in Latvia :(

Ehh, nebūti tik grūti pierast pie kirilicas klaviatūras, komentētu ukraiņu vai krievu valodā :) . Cerams, ka nākamais raksts par to pašu neko būs spāņu valodā :) .

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