WHERE ARE GROWTH INCENTIVES? A Questionable Axiom of Greek Austerity - Real Time Brussels - WSJ

A Questionable Axiom of Greek Austerity - Real Time Brussels - WSJ

Clearly omitted from the slant of this article is the issue of taxes and the share of GDP continuing to be spent by government.

Certainly in Portugal, taxes are way up.

If one assumed the same level of consumer income, then the 3% increase in the VAT rate has to have a direct effect in reducing proportionately the amount of money earned by retailers. Thus stores close and people get laid off.

In Greece, the news reports huge number of government employees and an enormous share of GDP controlled by government.

If government figures are correct, they are still to do any real downsizing of public employees. Thus, the unemployment has hit the private sector even harder.

And, since regulations holding back business start-ups in Greece haven't been relaxed (per very recent reports), then again, it is the mindset of government and unions, which in a very self-serving way continues to hurt the broader economy. Has this mindset changed? Apparently not!

Thus, like a family living on credit cards to spend beyond their income, should the broader European economy in any reasonable way continue to expand the credit limits?