Mark Hubbard calls out Bernard Hickey for yet another childish swipe at efforts by governments, however lack-lustre, to either repay or avoid further debt--to both of which Big-Govt Bernie is apparently opposed.
In Bernard’s item number one this morning], looking at the continuing train wreck of Greece, he says:
“…the debt debacle is getting even worse in Greece, forcing the Germans to think about
stumping up yet more money.
“The austerity medicine is clearly not working.”Really? It took Greece, and all the other Keynesian basket-cases, sixty and seventy years of irresponsible government spending to [reach their current position of indebted servitude]. In the face of such long term insanity, who seriously believes that just one year of austerity was going to change anything!?
Thinking that sixty or seventy years of over-spending can be fixed by one year (or even ten) of (true) austerity, is the sort of childish emoting that got the West in to this mess in the first instance.
Grow up!
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Readers might also be interested in the following article:
"http://nationalinterest.org/commentary/austerity-has-yet-come-greece-7678">.
It's by a Greek analyst, who points out that there still has not been real austerity practiced by the government. While GDP is down by 22% from 2007, and while the actual budget is down by 20 billion Euros from 2009, that has to be seen relative to the 28 billion Euro increase from 2006-2009. Moreover ...
Over half of it came from four sources: less public investment (down 39 percent), a cut in weapons procurement (down 84 percent), fewer civil servants due to retirements (down 8 percent) and a doubling in EU funding. These are not tough political decisions. Meanwhile, cuts in wages for civil servants and in social benefits made up just 23 percent of the deficit reduction.
As a result, if one excludes public investment (to control for the recent drop), the state spent in terms of GDP 4 percent more in 2011 than in 2006, the last “normal” year. Since the cuts have been skewed, government spending on wages and social benefits was higher in 2011 than in 2006. Social benefits, in particular, continue to be much higher than their 2006 level, and Greece’s spending on pensions as a share of GDP was the second highest in Europe in 2010. All this mocks the idea that the welfare state is being starved.
Finally he addresses the usual complaints about tax, where Greek dodging is acknowledged. But he points out that tax revenues reached an all-time high in 2011 - and still did not stop the bleeding. In other words spending by the government is still the problem.
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