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But this is not the cause of the economic problems. The more appropriate solution would be to shut down the money-loosing public businesses (like the train org)

by sx 16y ago

But this is not the cause of the economic problems. The more appropriate solution would be to shut down the money-loosing public businesses (like the train org) and lay off as many people as needed from the public sector. This way, they will reduce government spending and will also allow people to do something more productive. More taxation will just slow down the economy even further.

deleted 16y ago
[deleted]
jakarta 16y ago
Greece has a debt crisis. The state borrowed some €216 billion and now cannot pay it. This isn't just some slow down caused by the business cycle that can be fixed by reducing taxes. Tax evasion costs the Greek government an estimated $20B a year. I would say that improving tax collection would significantly help Greece make payments on their debt. You have a big problem when there are millionaire doctors not paying a cent in taxes to the state. Sure, they have money wasting state enterprises, they could try to privatize some of them - but it is something that should not be done in a hasty manner. Rushes to privatize have led to massive failures (see Russia, parts of Latin America). So in order to get out of this mess they should 1. Restructure the debt to get a longer payment schedule 2. Improve their ability to collect taxes so that they can make some of those payments. 3. Work to privatize certain state owned businesses / infrastructure. ... or drop out of the EU, devalue currency, grow GDP
- sx 16y ago
  You are arguing as if the Greek government is entitled at peoples' money no questions asked. What you are suggesting is to keep wasting the tax money to pay for the inflated public sector and all the money wasting state companies. They should first fix the problem, stop the wasting, and then try to collect more taxes. Reducing tax evasion, without solving the root cause, will help nobody, it will just get more money wasted. As far as your last point goes, I am not totally against dept restructuring. As long as they make sure they solve the root case of the problem
  - jakarta 16y ago
    And you are arguing as if the Greek government is entitled to no taxes. Greece provides its citizens with loads of social services. Someone/something has to pay for that. In the other EU countries, you know - the ones without sovereign debt crises (Germany for example), the taxes paid by citizens help pay for some of those services. In Greece that doesn't happen because of the rampant tax evasion. So instead the government lies about its budget deficit, borrows tons of debt, and is now hoping for a bailout from some of the more fiscally responsible EU nations. German tax paying citizens are likely going to have to help subsidize Greek citizens who are unwilling to pay taxes.
    - sx 16y ago
      Greece does not provide its citizens with more social services than other European countries, I would say that they actually provide less. And although you are right about the deficit, again, the main problem is the inflated public sector with all its associated problems, like high pensions at a young age. The private sector should not be burdened with this, and actually, it cannot afford to pay for this burden. If collecting more taxes is the solution here, it's certain that Greece will go bankrupt. Regarding Germany vs the other European countries, what is easy to see is the direct contribution of Germany to the EU but the indirect benefits that Germany got because of the fixed currency are more difficult to see although very very important for them.
      - davidw 16y ago
        It's not about more taxes, necessarily, it's that everyone should pay their "fair share", not some people pay 50%, and some wealthier people pay 0. If they think that is too high, they need to convince the politicians/electorate to lower the taxes. I can't just go steal stuff from the supermarket because I don't like the price.
        rick888 16y ago
        "It's not about more taxes, necessarily, it's that everyone should pay their "fair share", not some people pay 50%" I wish this was the case in the US. http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1 http://finance.yahoo.com/news/Nearly-half-of-US-households-a... Nearly 50% of US households didn't pay federal taxes last year. It seems people only complain when the "rich" don't pay their taxes. I also seriously doubt that the only people not paying taxes in Greece are wealthy.
mfukar 16y ago
Really? Shut down public transportation, public health care, public telecommunications and public power? Do you have an equally brief transition plan?
- oiuygtfrtghyju 16y ago
  Traditionally one then invades Poland - but this may not be an option for Greece.
- sx 16y ago
  I am not advocating something that extreme here. Not sure how familiar you are with Greece. Each of these organizations is overstaffed to a great extend. Then some of them are totally useless, like the public railroad. On the top of that there are businesses that would be very healthy in the private sector (see banks) and that the government has absolutely no reason to be in. The fact that the government is actually in those businesses, profitable or not, screws up the incentives of everyone involved.
  - mfukar 16y ago
    I happen to be somewhat familiar, since I've been living there for 26 years. The majority of state enterprises (or those the state has a share in) right now are profitable, with the notable exceptions of a) railroads and b) the off-the-books units created by ministries to handle short-term tasks. Could they benefit from a restructuring and would lay offs be helpful? Probably so. Does the state's involvement in public corporation screw up incentives? Telecommunications is a good example of why not. Banks still don't convince me; they pay taxes with interest rates significantly less than 18-20%, which is the norm and they have resisted any and all attempts of the state for policy changes. Personally, I am more concerned with other issues: the legislation that often proves to be shortsighted and inefficient, limited (and that's a euphemism) opportunities to young entrepreneurs, poor education, but the one thing that bugs me the most is that Greeks (yeah, I'm one of them) have no regard for public interest. The why is a longer story than what can fit in this post. PS. You hinted to "shut down the money-loosing public businesses" as the "more appropriate solution"; if you're not advocating for it I may have to brush up on my English comprehension skills.

by sx 16y ago

deleted 16y ago

[deleted]

jakarta 16y ago

Greece has a debt crisis. The state borrowed some €216 billion and now cannot pay it. This isn't just some slow down caused by the business cycle that can be fixed by reducing taxes. Tax evasion costs the Greek government an estimated $20B a year. I would say that improving tax collection would significantly help Greece make payments on their debt. You have a big problem when there are millionaire doctors not paying a cent in taxes to the state. Sure, they have money wasting state enterprises, they could try to privatize some of them - but it is something that should not be done in a hasty manner. Rushes to privatize have led to massive failures (see Russia, parts of Latin America). So in order to get out of this mess they should 1. Restructure the debt to get a longer payment schedule 2. Improve their ability to collect taxes so that they can make some of those payments. 3. Work to privatize certain state owned businesses / infrastructure. ... or drop out of the EU, devalue currency, grow GDP

sx 16y ago
You are arguing as if the Greek government is entitled at peoples' money no questions asked. What you are suggesting is to keep wasting the tax money to pay for the inflated public sector and all the money wasting state companies. They should first fix the problem, stop the wasting, and then try to collect more taxes. Reducing tax evasion, without solving the root cause, will help nobody, it will just get more money wasted. As far as your last point goes, I am not totally against dept restructuring. As long as they make sure they solve the root case of the problem
- jakarta 16y ago
  And you are arguing as if the Greek government is entitled to no taxes. Greece provides its citizens with loads of social services. Someone/something has to pay for that. In the other EU countries, you know - the ones without sovereign debt crises (Germany for example), the taxes paid by citizens help pay for some of those services. In Greece that doesn't happen because of the rampant tax evasion. So instead the government lies about its budget deficit, borrows tons of debt, and is now hoping for a bailout from some of the more fiscally responsible EU nations. German tax paying citizens are likely going to have to help subsidize Greek citizens who are unwilling to pay taxes.
  - sx 16y ago
    Greece does not provide its citizens with more social services than other European countries, I would say that they actually provide less. And although you are right about the deficit, again, the main problem is the inflated public sector with all its associated problems, like high pensions at a young age. The private sector should not be burdened with this, and actually, it cannot afford to pay for this burden. If collecting more taxes is the solution here, it's certain that Greece will go bankrupt. Regarding Germany vs the other European countries, what is easy to see is the direct contribution of Germany to the EU but the indirect benefits that Germany got because of the fixed currency are more difficult to see although very very important for them.
    - davidw 16y ago
      It's not about more taxes, necessarily, it's that everyone should pay their "fair share", not some people pay 50%, and some wealthier people pay 0. If they think that is too high, they need to convince the politicians/electorate to lower the taxes. I can't just go steal stuff from the supermarket because I don't like the price.
      - rick888 16y ago
        "It's not about more taxes, necessarily, it's that everyone should pay their "fair share", not some people pay 50%" I wish this was the case in the US. http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1 http://finance.yahoo.com/news/Nearly-half-of-US-households-a... Nearly 50% of US households didn't pay federal taxes last year. It seems people only complain when the "rich" don't pay their taxes. I also seriously doubt that the only people not paying taxes in Greece are wealthy.

mfukar 16y ago

Really? Shut down public transportation, public health care, public telecommunications and public power? Do you have an equally brief transition plan?

oiuygtfrtghyju 16y ago
Traditionally one then invades Poland - but this may not be an option for Greece.
sx 16y ago
I am not advocating something that extreme here. Not sure how familiar you are with Greece. Each of these organizations is overstaffed to a great extend. Then some of them are totally useless, like the public railroad. On the top of that there are businesses that would be very healthy in the private sector (see banks) and that the government has absolutely no reason to be in. The fact that the government is actually in those businesses, profitable or not, screws up the incentives of everyone involved.
- mfukar 16y ago
  I happen to be somewhat familiar, since I've been living there for 26 years. The majority of state enterprises (or those the state has a share in) right now are profitable, with the notable exceptions of a) railroads and b) the off-the-books units created by ministries to handle short-term tasks. Could they benefit from a restructuring and would lay offs be helpful? Probably so. Does the state's involvement in public corporation screw up incentives? Telecommunications is a good example of why not. Banks still don't convince me; they pay taxes with interest rates significantly less than 18-20%, which is the norm and they have resisted any and all attempts of the state for policy changes. Personally, I am more concerned with other issues: the legislation that often proves to be shortsighted and inefficient, limited (and that's a euphemism) opportunities to young entrepreneurs, poor education, but the one thing that bugs me the most is that Greeks (yeah, I'm one of them) have no regard for public interest. The why is a longer story than what can fit in this post. PS. You hinted to "shut down the money-loosing public businesses" as the "more appropriate solution"; if you're not advocating for it I may have to brush up on my English comprehension skills.