Fiscal Sadism and the Farce of Deficit Reduction in Greece
Unemployment in Greece has climbed to a new record of 27.9 percent and the country is headed toward a third bailout. The obsession with reducing the budget deficit is crippling the Greek economy. Extreme fiscal consolidation in the midst of a major depression can only have extreme effects on output, leading to greater unemployment, widening poverty, massive loss of faith in political and social institutions, and the potential for political violence. This is precisely what has been taking place in Greece since 2010, as fiscal brutality intensifies from one year to the next. Offering Greece yet another bailout package is not the answer.