Greece and Other Countries

I thought the following from Brian Wesbury was exceptionally well stated.

As of 2008, Greece had a top income tax rate of 40% and a
value-added-tax (VAT) of 19%. In addition, employers paid
28% of salary for social security, while employees paid 16%.
The debt issues in Greece have little to do with revenue; they
have everything to do with the worldwide inability of
governments to spend within their means. The same is true in
the US. It is not tax rates that are the problem; it is spending
that threatens solvency. Just look at Illinois and California. If
these states raise tax rates again, more people will leave, hurting
the attempt to raise revenue.

Even if Greece, Illinois, California or the United States
itself repudiated their debt – declared they would make zero
payments – they would all still have substantial annual budget
deficits. At that point, the only fix would be to cut spending
because potential lenders would go on strike.

This is a structural problem, not a systemic and cyclical
one. The housing crisis was an easy-money-induced-bubble.
The issue with sovereign debt is partly caused by easy money
(meaning central banks have helped to mask the pain of
spending and taxes), but mostly caused by politicians and
voters who greedily spend future generations’ resources today.
It’s ironic, but markets and investors (the ones many populists
like to berate) make up the system that will help protect these
future generations from the greed of politicians and voters.