For years Steve Forbes
, chairman and editor-in-chief of Forbes Media, has extolled the virtues of a flat tax in the United States.
Now he recommends it for Greece. The former presidential candidate wrote an open letter to the new Greek government in Forbes magazine with suggestions for how it can bring the country's moribund economy back to life.
- "Taxes. Bulgaria and Macedonia each have a flat-tax system of 10 percent on personal incomes," Forbes writes. "Adopt your own 10 percent flat tax. Then go one better and slash your corporate tax rate to 10 percent.
- "Privatization." That's an easy way for the government to earn revenue.
- "Change labor laws that kill job creation." Pass laws that are meant to save jobs by making it difficult to fire workers instead make businesses reluctant to hire or push businesses to employ workers off the books.
- "Don't even think of abandoning the euro. Your drachmas wouldn't, as the cliche goes, be worth the paper they're printed on," Forbes cautions.
"If you carry out the above true growth reforms, capital will pour into your depressed economy," he argues.
"There's no reason that Greece's economy can't expand," Forbes adds.
"Must Greece perpetually be the runt of the EU litter when it comes to economic growth? No."
Greece and its eurozone lenders reached an agreement last month to extend payment on its debt by four months in exchange for a pledge of continued fiscal austerity from the Greek government. But Marc Faber, publisher of the Gloom, Boom & Doom Report, wasn't too impressed with the deal.
"The Greek problem has been postponed. It hasn't been solved," he tells CNBC
. "And the problem is really that they have debt the country with its economy simply cannot serve or pay. The economy is not strong enough to support" the debt load.
Greece's public debt totals 316 billion euros ($358 billion), according to the government. That's 148 percent of its GDP.
While commentators are concerned that a Greek exit from the euro could cause chaos for the global financial system, a bigger risk would be "a closer relationship between Greece and Russia, or Greece and China," Faber notes. "That's [what] Western allies want to prevent at all costs."
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