September 13, 2010

Reducing the size of the public sector and ramping up small business creation

Sounds like a great idea — get a good-sized chunk of people off the Government payroll and make things conducive to those people who want to start a small business. This would kick-start the economy and cut the size of the Government; therefore cutting down the amount of taxes needed to sustain it.

Too bad it is not being done here. Cuba is doing it. From the BBC:

Cuba to cut one million public sector jobs
The Cuban labour federation said more than a million workers would lose their jobs - half of them by March next year.

Those laid off will be encouraged to become self-employed or join new private enterprises, on which some of the current restrictions will be eased.

Analysts say it is biggest private sector shift since the 1959 revolution.

Cuba's communist government currently controls almost all aspects of the country's economy and employs about 85% of the official workforce, which is put at 5.1 million people.

As many as one-in-five of all workers could lose their jobs.

Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls and losses that hurt the economy,” the labour federation said in a statement.

“Job options will be increased and broadened with new forms of non-state employment, among them leasing land, co-operatives, and self-employment, absorbing hundreds of thousands of workers in the coming years,” the statement added.

Emphasis mine - boy howdy! We could learn from this.

More:

To create jobs for the redundant workers, strict rules limiting private enterprise will be relaxed and many more licenses will be issued for people to become self-employed.

Private businesses will be allowed to employ staff for the first time.

The self-employed will have access to social security and will be able to open bank accounts and even borrow money to expand their businesses.

They will also have to pay tax on their profits and for each person they employ, something which could dramatically boost the government's income.

Emphasis mine again. If you cut taxes, the revenue to the government will increase because people will be more productive.

What kind of bizarro world are we living in where the current administration is sliding toward pan-global socialism and the rest of the world is pulling back. Cuba is seeing the nature and virtues of Capitalism and adopting it. Evolution not revolution.

Posted by DaveH at September 13, 2010 03:51 PM | TrackBack
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