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  • Estonia's Rebound Through Fiscal Discipline: A Message for America?

    In the midst of a world embroiled in economic turmoil, a few nations have managed to do surprisingly well—among them, Estonia. After near economic collapse during the 2008–2009 financial crisis, the country has managed to successfully bounce back with substantial GDP growth, a vibrant trade environment, and a notable budget surplus.

    During the first quarter of this year, Estonia had the highest rate of growth in the EU and the biggest drop in unemployment. In July, its credit rating was raised by Fitch to A+, a reflection of substantial economic growth.

    But how did Estonia get here? Estonia possesses a flexible, open economy and investment climate that encourages competition and economic growth. It remains one of the world’s freest economies, according to The Heritage Foundation’s Index of Economic Freedom. However, prudent fiscal policies have played the largest role in Estonia’s impressive economic performance, particularly in recent years. Still, the path to fiscal conservatism was not easy; it required a lot of rigorous, painful cutback involving 9 percent of GDP in fiscal adjustments and large cuts to nominal wages.

    Certainly, some other nations have tried to follow similar reform courses. Nevertheless, thrifty politicians, low flat taxes, and an open, market-friendly economy are not the norm.

    An overwhelming majority of Americans fear for their economic future, prefer a return to sensible fiscal policies, and ultimately want to see limited government. With irresponsible policies creating an unsustainable economic environment, we need a serious debate that focuses on the needs of Americans, not the needs of politicians.

    Plenty of examples at home and abroad have demonstrated what works economically and what does not. Which example will we choose to follow?

    Erin Grant is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit:http://www.heritage.org/about/departments/ylp.cfm

    Posted in Economics [slideshow_deploy]

    3 Responses to Estonia's Rebound Through Fiscal Discipline: A Message for America?

    1. Richard M says:

      When you have a fraud as PunkOTUS, do you think he's going to get us out of the economic mess? Ha-ha, what a bunch of yutzes you are if you do. Cut backs on entitlements? Are you kidding? Americans on the govt. dole love that 'cradle to grave' stuff. Estonia doesn't have a 'wolf in sheep's clothing' as their president. WTFU America. Obama's a Trojan Horse and it's time to put the spotlight on this fact.

    2. Bobbie says:

      Look at that, Mr. President? The world doesn't need you! And since you hate American philosophies that have strengthened America for the last 237 years, maybe you can learn from Estonia?

      With all due respect the key word recognized is "discipline."

    3. Jim Molock says:

      Why have most of America just accepted the first year Obama spending level of 2009 for a so called one time emergency to now become the budget bottom base line. We are discussing cuts over 10 years! Why have we not reverted back to the “pre-emergency” budget levels or spending. We should cut 700 billion in 2013 easily and in fact should revert back to the 2008 budget level. Please start this national informational discussion. We are moving toward a socialist progressive state and please define these progressives in this manner. We are moving and, in fact are close to a position of bringing about the need to re-declare our independence from our current government. I surely hope this can be done at the ballot box starting in 2014.
      jimmjcpb

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