Posted by
netfotoj on Monday, June 23, 2008 7:39:35 PM
Estonia,
liberated from communism in part by music, has embraced supply side economics
and economic freedom. This small Baltic nation may have some lessons for America…
Mart Laar, who became Estonia's
first prime minister in 1992, inherited the bitter fruits of socialism - an
economy in shambles and the citizenry dispirited. "In an era of
socialism," Laar wrote, "people were not used to thinking for
themselves, taking the initiative or assuming risks."
…Supply-side economics is very controversial in the West, but Laar
has little doubt of its effectiveness. "The flat-rate tax has been an
important part of the Estonian success story," he said. "its easy to
collect and easy to control." The only losers, he noted, were the tax
lawyers.
In the 2008
Index of Economic Freedom compiled by the Heritage Foundation, Estonia ranked as the 12th freest
economy in the world, ahead of Japan,
Germany, and the Netherlands-an
astonishing achievement in a decade and a half. The result has been formidable
economic growth, an average of 6% per year since the reforms began. The effects
of the Singing Revolution have reverberated across the former Soviet empire, as
five nations in the former USSR-Georgia, Latvia, Ukraine, Romania, and Russia
itself-followed Estonia's lead in establishing flat taxes and adopting free
market reforms.
Estonia's
embrace of free enterprise, private property, and low taxes were built upon the
Reagan-Thatcher vision of the 1980s. The supreme irony, of course, is that,
while Estonia (and other
Central and Eastern European countries) are taking Reaganism even farther than
Reagan could, the U.S.
now seems headed down the road of collectivism and higher taxes. As Central
European countries are slashing tax rates, Barack Obama promises to raise the U.S. marginal
income tax rate and to nearly double the capital gains tax. While the former
communist countries are discovering the virtues of privatization, Democrats in
the U.S.
(and some Republicans too) are seeking a more expansive role for the state.
Ironic isn't it, that post-Cold-war eastern Europe is embracing Reaganomics and freedom at the same time that Reagan's former "shining city on a hill" republic is poised to elect a president and strengthen a Congress who will "collectively" turn us back toward the darkness of socialism?