Unpayable debts, a catastrophic economic depression and teetering on the brink total collapse. How did Greece get into this position?
The most popular answer is that public spending has been too high, and the government sector bloated. It sounds plausible when the entire story revolves around debt. After all, everyone knows that debt is the result of spending more than you earn. Yet it isn’t so straightforward.
The Organisation for Economic Cooperation and Development noted in 2011: “Greece has one of the lowest rates of public employment among OECD countries, with general government employing just 7.9 percent of the total labour force in 2008 … Across the OECD area, the share of government employment [averages] 15 percent.” [Read more…]