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Politics : American Presidential Politics and foreign affairs
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To: DuckTapeSunroof who wrote (43108)5/7/2010 2:53:50 PM
From: TimF1 Recommendation  Read Replies (1) of 71588
 
The Greeks do a lot of tax evasion. Of course a big reason for that is the high tax rates in Greece.

In any case tax evasion isn't really the reason for their current fiscal crisis. Their tax take has not declined as a portion of their economy over the years, nor is their any good reason to think tax evasion has become a much larger issue. What's changed is 1 - The government has kept spending more and more, not just in nominal or real currency terms, but as a portion of the economy, and 2 - There was the fiscal crisis and world wide recession.

If the recession never happened they would have muddled through for awhile, but eventually there would be a recession and they would have started to fall apart anyway. Even if somehow Greece could be recession free for the next couple of generations, their government's appetite for spending growth probably would have gotten them in to a similar hole eventually.
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