“Pennies do not come from heaven. They have to be earned here on earth.”
– Margaret Thatcher
In the current difficult situation, it is especially important for Georgia to choose a pragmatic way and not to be overwhelmed by emotions – this applies to health care measures as well as economic policy.
I can’t put myself on the healthcare specialty, however, I have previously stated how important mass testing is to restart entrepreneurial activities. I would also like to point out that it was necessary for the government to use the accumulated pension funds (part of the state contributions) immediately to purchase services from the private sector of the healthcare – to prepare private clinics to fight Coronavirus, to encourage and support private initiatives in this area. What we don’t see yet, I hope they know better.
As for the economic, entrepreneurial direction, I think it raises even more difficult tasks. Almost everyone believes that, as in the case of healthcare, the role of the state here is (also) special. This idea (actually emotion) is reinforced by three important factors:
People believe that the government exists precisely to solve economic problems (moreover, to manage the economy);
The government, together with the National (Central) Bank, has more resources than the private sector;
The government knows better how to spend this money.
Different people use different variations of economic policy, some supporting government subsidies, some relying on the central bank’s monetary machine.
These versions involve saving businesses and artificially maintaining economic activity, which is expected to cause money to be wasted. Impoverishment of the people and accumulation of public debt, which the population itself will have to pay.
The article was originally published by Free Market Road Show 2020