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Monday, August 29, 2005

Walking on Water

Estonia. 1994. Economy very very sick. Enter a history teacher with no idea about economics. Cullen is Ying. Mart Laar is his Yang. He did what any history teacher would do. He read a book. Mart Laar chose Milton Friedman’s "Free to Choose". Cullen didn't.

The rest of the story is predictable, providing you are not a Labour economist. Flat tax helped save the Estonian economy. In Europe, many countries noticed and have followed suit. Down under, punters still believe the line that to cut taxes is to cut services. Said Mart Laar:
I was so ignorant at the time that I thought that what Friedman wrote about the benefits of privatisation, the flat tax and the abolition of all customs rights, was the result of economic reforms that had been put into practice in the West. It seemed common sense to me and, as I thought it had already been done everywhere, I simply introduced it in Estonia, despite warnings from Estonian economists that it could not be done. They said it was as impossible as walking on water. We did it: we just walked on the water because we did not know that it was impossible.”
There's obviously more to it than that. I wont bore you with the details. Just don't be so quick to buy Labour mantra. Remember, if they try pulling your leg, come back here and click the link.
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Posted by ZenTiger | 8/29/2005 10:15:00 PM