The fiscal turmoil in Greece is not about fiscal balance. It’s a fight between looters and moochers such as Olga Stefou, who think taxpayers should endlessly subsidize everything, and the shrinking group of productive people who are pulling the wagon and keeping Greece’s economy from total collapse.
Not surprisingly, the Greek government has tried to prop up its uncompetitive welfare state by pillaging that group of productive people. But it appears that the kleptocrats may have gone too far and triggered a Tea Party-type revolt.
Here are some excerpts from a remarkable story about a Greek tax revolt from Der Spiegel in Germany.
Belitsakos is…the physical and spiritual leader of a movement of businesspeople in Greece that is recruiting new members with growing speed. While Greece’s government is desperately trying to combat its ballooning budget deficit by raising taxes and imposing new fees, people like Belitsakos are putting their faith in passive resistance. The group’s slogan is as simple as it is stoic: “We Won’t Pay.” This business owners’ absolute refusal to pay any taxes resembles an uprising of the ownership class, rather than the working class, a rebellion of the self-employed business owners who have long been the backbone of Greek society. These are not the people who weaseled their way into Greece’s oversized civil service; these are people who put their money in the private sector, working 12-hour days, seven days a week. …”The state will kill us,” he says. “We’re acting in self-defense.”
In other words, these are the good guys. And look what they have to deal with.
Then he starts to do the math. Over the last two years, his sales have massively shrunk as 60 of the tavernas and restaurants he used to make deliveries to have terminated their contracts with him. At the same time, the government has raised the value-added tax (VAT) twice while imposing a never-ending series of new fees. He mentions the €300 ($406) one-time fee for the self-employed, a two-percentage-point boost in the VAT, a €180 solidarity levy for the unemployed and a property tax that is “easily a few hundred euros every year.” …Belitsakos calls them “charatzi,” a word from Ottoman times that can perhaps best be translated as “loot” or “compulsory levy.” The term is meant to indicate taxes levied arbitrarily and without justification, such as the tithe once paid to feudal lords.
This doesn’t mean that anyone who refuses to pay tax is automatically a hero. Some of the moochers and looters that have destroyed Greece think they should rape and pillage others and not pay taxes themselves.
These days, even communists, unionists and leftists are raising a public outcry against the new taxes. This week, Aleka Papariga, the general secretary of the Communist Party of Greece, said that the only way to stop the complete bankrupting of the people was for them to not pay the “charatzi.”
The UK-based Financial Times, in a story on the likelihood of a Greek default, also finds anger among the nation’s productive class.
The frustration is evident even among those who have jobs. George, a 49-year-old real estate agent, said despite a pledge to cut 30,000 public service jobs, the austerity policies of the government still appeared intent on protecting the interests of civil servants and state employees in general at the expense of the private sector. “Everything from water to electricity and telephony charges has gone up because of the increase in VAT [value added tax],” he said. And a new special property tax meant he would be hit yet again. In an increasing sign more and more people are getting upset with the political system and taxes, Andreas P, a 54-year-old clerk at a big Greek supermarket chain, is vowing to refuse to pay the new special property tax in protest at what he sees as an explosion of public service workers. “My father had a [café] in our village near Lamia [central Greece] back in 1980 and knew that just four out of the 400 inhabitants were state employees,” he says. “When I visited my village in August, I tried to count by curiosity how many were employed in some form in the public sector. I found out that more than 200 were working there. Is it ever possible for a country to prosper with so many state employees who do not produce? Can you give me a good reason to pay the extra taxes?”
These two stories underscore the message that I’ve been repeating for years. Greece’s problem is not deficits and debt. Red ink and imminent default are bad, but they are symptoms of the real problem of a bloated public sector and the dependency culture created by too much government.
This video explains why the burden of government spending is the critical fiscal policy variable.
And it goes without saying that America faces the same challenge. The only difference is that we have a few years to solve the problem before we have our own Greek-style fiscal crisis.
