As Christian Easter approaches, the week of Pesach also arrives (this year from 19 to 27 April), the feast with which the Jews remember their return from slavery in Egypt. In this week the only bread that can be eaten is unleavened, unleavened bread, in memory of the refugees who could only feed on it, led by Moses in their flight from Egypt. On Pesach leavening is banned and cakes cannot rise, so no one can be told to wait to divide the cake until it has risen, allowing each to have a little more cake without taking any away from the others. For a year now, Italy seems to have plunged into an endless Pesach. The government narrative essentially focuses on redistributive policies (quota 100, citizen's income), without worrying about the fact that these policies generate uncertainty – also because they are financed with a growing public deficit – and take away the leaven from the Italian economy, eliminating its growth.
It is true that Italy has inequality problems and a growing band of poverty, but if we wipe out the already anemic growth we had, it will be even more difficult to solve those problems. The government narrative seems to be based on an approach that ignores the contribution that growth makes to collective well-being. In external policies, a mercantilist vision seems to prevail in which it is not recognized that trade between countries builds wealth for everyone. In the internal ones, the conditioning of distributing slices of the unleavened cake dominates.
These static, rather than dynamic, views of society are in various ways detrimental to growth, ultimately building distrust of the future. Growth, in fact, arises from the investment that takes shape when there is someone willing to take risks and who manages to obtain the financial resources to support that investment, which often promotes innovation. Instead, the government's deficit-financed redistributive policies increase uncertainty. In fact, for example, they aggravate the public debt already so high as to risk the downgrading of Italy to a "junk" rating (i.e. below the BBB-) and, having caused a self-inflicted increase in the spread, put the banks in trouble making them unable or unwilling to finance businesses and households. All this leads to a reduction in private investment. And household consumption is also growing less than before, which compensates for the greater uncertainty by increasing the propensity to save.
Also contributing to the uncertainty was the fact that for a long time they stubbornly maintained, as did the government, that all the forecasts for Italy's growth made by domestic and international institutions were too low, only to then have to recognize in the 2019 DEF that to be the government's forecasts for growth were wrong in excess. AND the muscular attitudes certainly did not help towards the European Commission, raise a loud voice with other EU countries that should be our natural partners, as well as fear sudden changes in foreign policy, up to the "splendid isolation" in which we seem to find ourselves in the Libyan crisis.
The two strong points of Palazzo Chigi object that the arrest of our weak economic growth is entirely attributable to the worsening of the international situation. This is also argued by improbable experts who make many televised debates trash. It's not like that. The weakening of the international economy weighs heavily, but it doesn't explain all the zeroing of growth. The most of the downward dive of the Italian GDP depends on the redistributive policies financed in deficit. And these arose from the erroneous static vision of economic processes, which are instead essentially based on dynamic relationships in which it counts to be able to reduce uncertainty and increase the climate of trust.
In short, we need to recover the yeast and make the cake grow, if we don't want to go on with only unleavened bread.
