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Greek PM says country is going through “Great Depression”


 

Greece’s current economy looks a lot that that of the United States—circa 1930. “You had the Great Depression in the United States,” Greek prime minister Antonis Samaras told former U.S. president Bill Clinton. “This is exactly what we’re going through in Greece – it’s our version of the Great Depression,” writes Reuters.

Greece came to terms on a €130-billion bailout with the European Union and the International Monetary Fund last March, reports the Financial Post, but must bring its budget deficit below 3 per cent GDP by 2014. The current government must find an additional €12 billion through service cuts or increased taxes on top of the €17 billion in cuts already put in motion.

CNN notes Greece faces a €3.1 billion bond redemption on August 20 that the government could cover by selling short-term bills.

 

 


 
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Greek PM says country is going through “Great Depression”

  1. These bail-out plans predicated on harsh austerity measures are doomed to failure. The austerity becomes self defeating: it kills economic growth, jobs and tax revenues in a vicious circle — or otherwise known as a deflationary spiral.

    As we discovered in the post-war era when we paid down government debt from 100% debt/GDP to 17% by 1973, a country needs to be able to work to pay its bills. You can’t have an economy in free fall and pay down debt.

    As Keynes pointed out, the boom, not the slump, is the time for austerity. And he was proved right.

    Just like economists were studying for decades the boneheaded policies of the 1930s that wreaked economic havoc and led to world war, they will be studying the disastrous effects of these idiotic policies decades from now.

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