Greece In Downward Austerity Spiral

The more the Greek government practices “austerity” and cuts spending on social programs, the more the Greek economy collapses, thus creating the need for more “austerity” due to declining tax revenues.  Its a Downward Austerity Spiral.   Or how about Economic Austerity Death Spiral?

Is this what the Republicans have in mind for us here in the Good Old USA?

via Reuters: ATHENS, June 9  –

“Greece’s economy shrank far more than expected at the start of 2011, signalling a second wave of austerity measures prescribed by the EU and IMF will pile even more pain on a fractious society.”

“Gross domestic product tumbled 5.5 percent in the first three months of this year, the official numbers showed, far more than an earlier flash estimate of 4.8 percent.”

http://www.reuters.com/article/2011/06/09/greece-idUSLDE75827M20110609

via the Shamanic Economist:

“That doesn’t mean you can’t balance the budget by cutting back. But the cuts you need to arrive at a balanced budget are roughly twice the deficit that you want to close. If the budget deficit you’re looking at is $1 trillion per year, you need to make cuts of $2 trillion per year. That’s why John Boehner is talking about trillions in cuts, when the deficit is only about $1 trillion. It is not that he is confused. It takes about $2 trillion in cuts to close a budget gap of $1 trillion.”

http://shamaniceconomist.blogspot.com/2011/05/austerity-budget-and-downward-spiral.html

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