The Therapy Sessions
Tuesday, September 30, 2003
Iraqi Financial Reforms
Congressmen needn't worry that Iraq is on the way to becoming a long-run welfare case. The country's Governing Council has passed an economic plan providing for open trade, and a pro-growth, flat-rate 15% tax on corporate and individual income.
Plans are also well under way to give all Iraqis a stake in the success of their new society through the creation of an oil trust, some of which would go to fund public goods like education and some of which would be paid out directly to individuals on a regular basis (in a version of the Alaska oil trust). That strikes us as an enlightened way to show Iraqis that they have a stake in this transition to self-rule. But getting there will require some short-term American spending, and the trust would be impossible if Iraq were then required to service excessive debts.
An Iraqi Oil Trust will destroy OPEC.