American news stories about the Greek financial collapse frequently echo complaints of government employees and their supplicants about “budget cuts.” In reality, Greek government spending rose from 44.6 percent of GDP in early 2006 to 54 percent in 2010 and 59.2 percent in 2014 (although this is partly because private GDP fell even faster than government spending). Military spending is particularly lavish in Greece, second only to the United States within NATO as a percentage of GDP.
What is rarely mentioned in all the one-sided confusion about “austerity” is the other side of the budget–namely, taxes.
As if Greece didn’t have enough troubles, the Troika (International Monetary Fund, European Commission and European Central Bank) has promoted capital flight and a brain drain (exodus of skill and talent) by offering more and more loans to Greece in exchange for an increasingly suicidal blend of brutal taxes on both labor and capital. The table shows what happened to key Greek tax rates in the past few years.