Austerity, policies of rising taxes and balance budget, will not restore the Greek economy. The Hoover Administration's policy of balance budgets backed by a doctrine of rugged individualism learned this lesson the hard way in the early stages of the Great Depression
While many leftists in his own party were stunned by his acceptance of previously spurned austerity measures, Tsipras said he would now focus on securing a deal, apparently regardless of the consequences.
"The parliament today gave the government a strong mandate to complete the negotiations and reach an economically viable and socially fair agreement with its partners," said Tsipras. (see headline below)
This 'solution' only supports Greek's vicious downward economic spiral. Rising taxes, regardless of the spin, depresses economic activity. A further contraction of economic activity, in turn, depresses tax revenues. This leaves tax coffers flatlining or shrinking and leadership recommending additional tax increases to balance budgets that inexplicably won't 'balance'. That is, until the public says enough!
Headline: Euro lenders to pass bailout judgment as Greece backs reforms
BRUSSELS/ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras won backing from lawmakers on Saturday for painful reforms but it remained unclear it would be enough to secure a bailout from German and other euro zone ministers meeting in Brussels.
In parliament overnight, Tsipras had to rely on opposition votes from the right after some of his leftist allies opposed spending cuts, tax rises and other measures he proposed in order to unlock 54 billion euros in three-year credit and save Greece from a bankruptcy that would force it out of the euro zone.
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