Casandra warns beware of Greece’s ‘Austerity’ Plan

There hasn’t been an austerity drive. Sacrifices have been demanded of taxpayers, such as a 217 percent rise in property taxes. And this deprivation has resulted in three years of negative growth—with a debt-to-GDP ratio set to approach 160 percent this year.

Greece’s ‘Austerity’ Plan Is Anything But | FrontPage Magazine

by Daniel Flynn On February 10, 2012

...A coalition of Greek political leaders came to an agreement on Thursday to narrow the chasm between revenues and receipts in hopes of paving the way for $172 billion in new loans from the European Union. But EU finance ministers balked at the proposal that contained very little in specified cuts for non-defense-related government expenditures. The European finance ministers demanded from the troubled nation $325 billion in new cuts and parliament’s preapproval of the plan before it will agree to a further bailout. Greece, which is already de facto in default since other nations are paying its creditors, stands to legally default on March 20 if it doesn’t receive a cash infusion.

The refusal to implement promised budgetary and economic structural reforms is a tacit admission that Greek politicians believe the debt crisis just isn’t their fault. This is a popular sentiment within Greece, muted only when going abroad with hat in hand. Foreign bankers, EU bureaucrats, and American capitalists are favorite scapegoats according to internal Greek rhetoric. If outsiders are to blame for the crisis, why should Greeks reform their economic system? It’s everyone else who has the problem, after all, not Greece.

This attitude manifests itself in periodic temper-tantrum street protests and strikes by state workers. Government officials behave similarly in refusing to cut state jobs and services lest they alienate voters and find themselves out of a job. The procrastination seems to be based on the hope that the EU will inflate the currency—as Greece so often did when it controlled its money in the past—and print away the nation’s debts. Given that one in ten Greeks, and one in four employed Greeks, calls government boss, the country’s political leaders have made it nearly impossible to institute meaningful reform. The politicians have bribed the populace into supporting big government, and the populace’s dependence on the behemoth state has made it politically suicidal for politicians to cut into it. Not doing what is personal political suicide is surely national political suicide...

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