Sad but true.

Greece is facing 40% cuts to social programs via default.

of having a recognisable tax collection system.

Tax receipts in Greece have not changed significantly over the past few decades. Public sector spending has not changed significantly, either.

What did change was that Greece gave up its currency sovereignty to join the EMU at a punishing exchange rate.

Why make it more complicated than it is, really? You're caving to a right-wing framing which says public sector spending is bad, a healthy middle class is too much of a burden and banksters know best.

If it were, as the neoliberals claimed, that excess spending and low tax collections caused Greece's troubles, then years of austerity and tax hikes should have improved the situation. Greece did as the neoliberals demanded. They are worse off now than before.

It has mostly been words from the government, promising to mend their ways if they get just one more bailout.

Public sector spending never increased dramatically and tax collections have remained relatively unchanged.

It is interesting to read Americans attack Greeks on government debt burdens and tax avoidance. A bit hypocritical, wouldn't you say?

ETA: Greece absolutely has implemented austerity over the past two years. Have you not been paying any attention?


http://www.washingtonpost.com/world/in-greece-fears-that-austerity-is-killing-the-economy/2012/01/09/gIQA9hAFpP_story.html

http://www.guardian.co.uk/business/2011/nov/01/greece-austerity-measures

It has failed. Neoliberalism is a bankrupt ideology.

I am a Krugman/DeLong liberal - what the hell is MMT?

Is there is something about "in 2010 Greek state spending was 12% higher than revenues" that you can't quite grasp ? And you don't think there is a tax collection problem ?

if so, it certainly is not a new problem. Poor tax collection is not the cause of their current crisis. Collecting more taxes can not solve the crisis.

Germany, Britain and the USA all have big problems with tax evasion and avoidance, particularly in the corporate sector and for higher income brackets. Why aren't they also facing massive cuts and aspirin shortages?

"in 2010 Greek state spending was 12% higher than revenues"

How much higher is US spending than our revenues? Crunching the numbers in my head, I'd say we spend 75% more than we collect, right?

So why aren't we having to put our children in the care of strangers and buy our insulin from the black markets?

Economics can be a powerful tool, but it must be used and understood properly, or else we will simply be repeating past mistakes.

Greece cannot simply print money : the US is able to do that mainly as a result of the petrodollar recycling scam. When that reaches its timely demise the US may cease to be able to print fiat money too.

When Greece pulls out of the Euro , and goes back to their drachma , unless they can substantiate they can reasonably match revenues with receipts they will become effectively loan proof until they do so. That issue may be helped by a tourist boom as I'm guessing they will become the cheapest place in Europe for all inclusive holidays over here - no need for cash so their general refusal to accept payment by credit card because it leaves a paper trail will become arbitrary..