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Actually, I'm an American of Greek extraction, and also an EU citizen via Italy!!

"If Greek GDP, tax revenue, etc. were more than enough to sustain Greek pensions without IMF help, then there wouldn't be the crisis at all, would there?"

I think this is where we disagree. It's as though you believe that only social spending could get a nation in fiscal trouble.

by Upstate NY on Tue May 25th, 2010 at 06:09:35 PM EST
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No, military spending can also get a nation into fiscal trouble, but that isn't the problem in Greece right now.  

And actually, its not that any type of spending causes the trouble, but rather it is an inability of a country to resolve, internally, its own political disputes over resources that get countries into fiscal trouble. Given that one part of a polity wants more spending or less taxes, if it can't convince/compel another part of the same polity to pay for it it means the spending/tax policy is fiscally unsustainable and will eventually result in a crisis of some kind, either for that particular country, or, if the country is big enough, for others too.

by santiago on Wed May 26th, 2010 at 12:39:55 PM EST
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Economics is political. Nobody could have foreseen...

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Wed May 26th, 2010 at 12:53:10 PM EST
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It may not be the problem in Greece right now, but I would wonder if it has been the problem all along.

We're talking 5% GDP in purchases and 2.3% GDP in weaponry service.

Over a decade, that's a big chunk of change.

by Upstate NY on Wed May 26th, 2010 at 01:19:41 PM EST
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