Sunday, 1 February 2015

Going Greek

Comparing the British economy to the Greek was always a dumb thing to do. For one thing, there everybody dodges taxes whereas here its only multinationals and millionaires. For another, Greek government largesse was dished out to everyone, whereas here, via things like the pensioner bond, political parties look after their own. And of course the UK has its own currency.  

But, as the political parties here boast about whose got the biggest, hardest spending cuts, Greece does provide an example of what an unprecendented hacking back of the state in the name of fiscal rectitude looks like – it looks nasty, like  25% unemployment rate nasty, 50% youth unemployment rate nasty (and that’s despite people migrating), heck an economy that’s shrunk around a quarter in 5 years nasty, a quarter! Anyhoo, the Tories are currently proposing spending cuts on what the IFS calls “a colossal scale” *.

*of course other factors have influenced the Greek economy, but hacking back on public spending is a major one that has had similar effects in other countries. See here.

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