Why austerity?

In Greece, there is now a push on to catch tax dodgers. Apparently, one is supposed to indicate on some form that one has a swimming pool, and thus increase one’s own property taxes. A helicopter run over a well-to-do area found thousands of pools where only a handful were declared.

Today’s dumb question will actually be several, equally dumb, questions.

First, why is the government only now looking down at pools? Second, if you have a GPS and you have Google Maps, can’t you pretty well figure out most of the addresses of the properties with pools? Third, if this is such an obvious place for one to fib by omission, how serious were previous efforts to collect tax? Fourth, how many similar tax evasions could be detected by simple and effective means?

The so-called troika of the International Monetary Fund, European Commission, and the European Central Bank are scrabbling away at Greece, making sure enough austerity measures are being shoved in to, supposedly, make their chances of getting their money back greater. The cynics seem to say, Germany wants Greece to privatize key government businesses and assets, so they can be bought up at fire sale prices – a common result of IMF assistance elsewhere, I believe. The eventual result may well be a bankrupt Greece with a revolutionary populace; when the dust settles, the new “government” probably will repudiate all the debt anyway.

We should keep in mind that the debt owed is to German and French, and other, main and central banks. This wonderful troika is bailing out not Greece but their own financial institutions.

Where were the troika while all this money was being lent to Greece in the first place? What due diligence did they insist on before letting this huge debt pile up? What due diligence did they display in not knowing that Greece was nowhere near the deficit-to-GDP ratio needed get in, or stay in, the EU?

Finally, why austerity measures? Does anyone believe that putting 30,000 or 90,000 citizens out of work will increase government revenue? or cutting back on pensions already earned? or that increasing property taxes and collecting it via the electric bill (so you go dark if you don’t pay) will result in a larger economy?

One thing this solution has in common with earlier bailouts of the financial institutions is, no money will go to the poor individuals most affected; instead the interests of large financial institutions are paramount. We can expect these European banks to be giving out large bonuses shortly, as well.

So, why austerity? Screw the poor and do the rich? Is that a dumb question?

Leave a Reply

Your email address will not be published. Required fields are marked *