Thursday, September 15, 2011

It is Time for Tough Love in Greece

I've been following the financial turmoil in Greece in recent months, and although I've spent a good part of my adult life there, from 1975 through 2003, it is clear that the IMF and the EU have reached a point in time where only "tough love" will work on a country that is doing little but dragging the rest of us into financial ruin.

COMMENT: Even the US needs to look in a mirror and see itself becoming Greece in the not to distant future, if it does not abandon the Barack Obama School of Economics approach to reducing unemployed and growing gdp. Government never has the answers when it comes to reducing unemployment except for REDUCING NATIONAL SPENDING! The US Government is simply impotent to do what responsible citizens do every day: cut back, reduce debt and spend less.

Transparency International's website ( demonstrates that Greece is unquestionably one of the most corruption nation in the EU and clearly has one of the highest levels of tax evasion in Europe. The US is not much better, where barely 50% of citizens pay income tax at all.

The black economy in Greece, where tax is avoided altogether, is estimated at 27.5 % of GDP, about double the scale of the black economy in Australia, and does not include the underground economy of crime.

Although some elements of the EU are inclined to bail-out Greece, such a solution would not be good for Europe as a whole. Like people, governments must realize that nanny-states simply cannot survive. The US has also proved that you cannot spend your way into prosperity and you cannot bail out everyone. That's why they have bankruptcy laws and that's why capitalism works only when EVERYONE works hard.

No comments: