A major public investment programme makes sense only so far as genuine investment opportunities are available. Only in the Keynesian model is public investment advocated regardless of real return – mainly as a means of distributing spending power. A regular Citizens’ Dividend removes the need for artificially boosting public investment – the money is likely to be much more effective in the private sector.

Another key step is to cut (or eliminate) taxes on production. Production taxes stymie the economy, create compliance cost, deadweight costs, avoidance and evasion. Greece needs this urgently. Over 25% of GDP is in the black economy, mainly to evade the cost of taxes. Average household bribery bills are put at 1700 Euros/annum, further undermining the productive economy.

The final challenge is to ensure a stable money system (in Greece’s case by eliminating deficit spending). With the Citizens’ Dividend and the elimination of Dumb Taxes, major new sources of government revenue are essential. Land Value Taxation, Carbon Taxation are the Smart Tax alternatives. Achieving stable money will not be possible without monetary reform, and this requires reform of the ECB. Paper currency, coins and bank deposits should all be exclusively issued by the public part of the banking system.

So the key elements of a New Marshall Plan for Europe must include drastic reductions in Dumb Taxes, a regular Citizens Dividend, Land Value Tax and Monetary Reform.

The smartest way of proceeding is to combine these steps is to do a tax-for-debt swap, swapping mortgage debt and payments across the Euro zone for land-value indexed tax payment to government, replacing lost bank equity with debt-free, interest-free ECB paper. This is the basis for the exciting new Land Value Covenants (LVCs) we’ve all been hearing so much about lately – Smart Taxation without the pain!