Italy and the Euro

The New York Times: Reports that a factor in the raise of Italian bonds could be that Markets don’t trust future Italian Government to deal with the present economic mess in Italy. It is about politics folks, any new Italian Government that places a real tough austerity package on the table could be cutting its own throat at the next election, look how Governments form Dublin in Ireland to Athens in Greece have fallen. The people might say they want the Government to take the TOUGH decisions but the revolt when they see their benefits cuts. The Western model of a Welfare State is finished folks, the basic problem for the EU is that the social compact after 1945 only worked if you had a large young workforce to support a small older retired generation. This is not the case at the moment folks, you have small young workforce and a large level of older people, also since older people don’t have to retire at 65 there is less job prospects for the young. Its harsh but it’s the truth folks. Thus any Western reform must start with a tough talk between the generations, life is not fair as JFK once said, he also added some people are ill and some are not, thus the entire welfare model has to be changed, Unions will have to be restricted in what they can demand, older workers after lets say 70 have to retire, those that earn over half a million a year will have to pay more tax, the NHS will have to charge for some aspects as they do in Ireland. There has to be a new social contract folks, otherwise we are all heading for a cliff.