Jul 07, 2011 at 12:02 am
It’s fashionable in some circles these days to say “we’re like Greece,” with the goal of freaking people out. After all, that country was fiscally profligate and now they’re suffering the consequences: riots, strikes, held together by loans from abroad. We too have been fiscally reckless, etc…
But there’s another reason for the difference. As James Surowiecki explains, the Greeks do a terrible job collecting taxes owed. According to the piece, the Greek tax collectors missed a third of the tax take last year, “roughly the size of the country’s budget deficit.”
Yes, we’ve got some issues here too, but they’re trivial in size compared to Greece.
Surowiecki argues that culture plays a role, and if so, that’s another reason to close loopholes. The more people learn about tax breaks for profitable companies and jet plane owners, the more they feel like chumps for following the rules.
The larger point, however, is that a main reason we’re not Greece is because of the way our institutions, like tax collection, still work.
Yet one connect help worrying that the very people making the “we’re Greece” argument are somehow gunning for those very institutions. It reminds me of the conservative tactic of arguing the government is broken, then being sure to govern in such a way as to fulfill that prophecy.
If these folks force a default—a totally avoidable disaster—they’ll be the ones making us Greek.
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