You might have seen it in the New York Times where a large number of people in Greece don’t pay taxes. The sexy stat out of the article was that, in one wealthy neighborhood, only 324 declared their outdoor swimming pools. (There is a tax on pools, a “pool tax”.) But a satellite survey showed almost 17,000 pools in the same area. (How’s that for Big Brother as a tax collector?)
I guess the people there have to get more sophisticated about how to design a pool. Make it look like a pond, for one, with as much natural design as possible, so it blends in from outer space.
The article goes on to explain that that is just the tip of the iceberg. Basically, the Greeks don’t pay taxes, and now they want the Germans to pay their taxes for them.
The caption under the picture of the yacht marina reads: “Signs of wealth abound in Athens, but only a few thousand Greeks out of 11 million declared an income of more than $132,000 last year, according to the Finance Ministry.”
Now, this week, there has been some violence over the inevitable austerity measures that Greece has to take in exchange for money from the IMF. Everyone hates the IMF except that it seems to be the only lender of last resort around.
I think Germany’s Angela Merkel had the right idea about being tight-fisted. She probably knew about the pools.
One little country’s trouble-making tax cheats have been roiling the financial markets as result, and bringing the Euro back down to where it was a few years ago. This is even dinging the Japanese yen, since Japan as a nation does seem to borrow a lot–even though, here, the money is mostly all coming from other Japanese.
Meanwhile, in the U.S., which has been doing its share of borrowing to give a Keynesian kick to the economy, 10-year treasury note rates are going down. They had been close to 4% a few weeks ago, and yesterday were 3.55%. So Greece is making Uncle Sammy’s borrowing look good again, ironically. But hurting the U.S. banks, because people are trading like the banks all have money out to Greece (few do, and for very little).
I get tired of Doomsday Scenarios. I grew up in the 1970’s–that was my childhood–and it just seemed like life was one doomsday after another:
Inflation would send the cost of living sky high. Paper money would be worthless.
All the gasoline would be used up in 10 years (Remember “Don’t be fuelish!”?)
The Earth would be too polluted to support life.
Bacteria would get us. Chemicals would get us.
The corporations would have nothing left to sell for food except other people –
if we didn’t get nuked first. (But that was more of an early ’80’s fear. The other stuff was all before polyesther and disco.)
So, it was one disaster lurking after another. For a time that, honestly, nowadays doesn’t seem like it should have been so worrisome.
I have a hard time seeing how Greek tax cheats are going to set off Lehman Shock 2. I just think these people need to get their acts in gear. A lot of Europe is like that. They are great about lecturing on the world’s problems, but they have quite a share of their own that they need to focus their attention on.