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The myth is that a profligate welfare system for Greek workers has resulted in the Mediterranean country’s fiscal problems. Marshall Auerback and Rob Parenteau crush that myth here.  Aside from problems with the Euro itself, the reality is that the fiscal imbalances are a result of the top 20% of Greek taxpayers paying essentially no taxes.

Here’s one of the critical paragraphs, although I highly recommend the whole thing:

” if one looks at total social spending of select Eurozone countries as a per cent of GDP through 2005 (based on OECD statistics), Greece’s spending lagged behind that of all euro countries except for Ireland, and was below the OECD average. Note also that in spite of all the commentary on early retirement in Greece, its spending on old age programs was in line with the spending in Germany and France.”

So I guess Greek Mythology lives on….


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