Comments | psychohist: Another victory for tax cuts

psychohist

Another victory for tax cuts

Dec 29, 2014 00:23

When last I wrote on Greece, in 2012, there had just been elections that resulted in a change of power from the Panhellenic Socialist Movement - which had negotiated a government bailout and austerity package responsible for cutting the size of the Greek economy by one quarter - to New Democracy, which advocated a policy of growth through tax cuts ( Read more... )

politics, greece, foreign policy, economy, europe, world

Comments 4

What About Unemployment anonymous January 28 2015, 07:13:23 UTC

Five years ago the unemployment rate was about 12%. Now it's at a whopping 26%. That's progress?

The country's net debt doesn't reflect an improving situation either. Net debt was around 130% of GDP in 2010 according to the IMF - now it's around 170%.

Re: What About Unemployment psychohist January 28 2015, 15:27:02 UTC

All of the increase in unemployment and most of the increase in net debt occurred before New Democracy gained power in 2012. Before 2012, the policy, from PASOK, was straight austerity, rather than being supply side stimulation - taxes rates were being increased rather than decreased, with milder spending cuts - which was not working.

The fact that there has been no further increase in the unemployment rate is another sign that New Democracy's policies are working. Debt is slightly higher because it took a year, until 2013, to get to a primary surplus.

If New Democracy were still in power, debt as a percentage of GDP would now start falling as GDP grew. Unfortunately, the Greek voters were not sufficiently patient, so we'll probably now see a return to some version of policies that don't work.

Re: What About Unemployment ext_2986602 January 29 2015, 00:36:08 UTC

When New Democracy took power in mid-2012, the unemployment rate was below 25%; it is now 25.8%. You can say New Democracy's policies haven't increased unemployment much, but it hasn't helped either ( ... )

Re: What About Unemployment psychohist February 6 2015, 02:59:16 UTC

You are mistaken about the unemployment rate; the 25.8% figure is from October, and is the figure is significantly lower now. The following graph demonstrates just how consistently unemployment has fallen in the past year, since the tax cuts:

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