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.
“That’s enough, we can’t take it anymore,” chanted protestors in Athens on Tuesday. The mantra is that there is nothing left to cut. The media is only too willing to repeat it. The New York Times characterized the initial rejected agreement as “a package of harsh austerity measures,” while the UK’s Independent claimed that the “austerity drive has sent unemployment to a record high of 18.2 per cent and the country’s finances into a spiral of recession.”
But Europe’s finance ministers know something that journalists do not. 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. But there has been no state austerity program. Greece’s government increased its spending by six percent last year. What is austere about that?
Is there nothing left to cut? Child care is free in Greece. So is university education. Private colleges, and home schooling, are forbidden. The dole is a constitutional right. So is health care, which is provided by the state. The government picks up the tab on trips to the dentist and eye doctor. The country’s 2010 budget identified 74 state-owned enterprises worth 44 billion euros. Workers retire at an average age of 53, with decades of pensions acting as a severe burden on taxpayers.
“Nothing left to cut” is the rhetoric. Reality is closer to “Nothing has been cut.”
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