Today’s show is another example of out of control government spending.

Italy's government said on Tuesday fiscal incentives for home renovations had had a "devastating" impact on public finances over the last four years and were to blame for the expected rise in the country's massive public debt through 2026.

The plan offered to pay homeowners 110% of the cost of energy saving renovations. Another project promised to cover 90% of the cost of improving the facade of a building.

The government underestimated the scheme's appeal, but also made a number of other errors.

With such generous handouts, homeowners had no reason to negotiate with builders over costs. On the contrary, since the rebate exceeded the actual cost, higher costs meant more money was left for the homeowners in their pocket.

This effect was so predictable that you could see it coming from miles away.

Asked why they got their forecasts so wrong, officials involved in the budgetary planning have said they had no precedent to draw on as no one outside Italy had ever offered to refund more than the costs of the renovations. I’m sorry this is just plain stupid.

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Host: Victor Menasce

email: podcast@victorjm.com