Realism or pessimism?

Thrift is a Great Virtue, especially if exercised by the previous generations (Winston Churchill)
Let’s overspend , enjoy the party for thirty years and send the bill to the next generations (Neo-Greeks)

The triple Problem  :Budget Deficit to GDP about 13%,  PublicDebt  to GDP over 120%, Current account Deficit to GDP about 12%

Reasons :
a) Overspending by consumers and the State.
b) Political system. Congressmen become ministers and spend for reelection hoping that the day of reckoning will come in the distant future.

Policy Remedy : Decrease Spending and mainly Increase Taxation
Our Suggested Remedy : Mostly Slash Public Expenditures that are not productive, Adopt a low flat tax rate, Implement tax collection of VAT.

Most Possible outcome : Severe Recession for several years and social unrest.

Reasons :
a) Depreciation for correction of the Current account is impossible, Real wages per output have increased more than 30% compared to  the rest of Europe since 2001. Therefore ,real wages have to adjust downwards considerably.
b) The reduction of the Deficit will decrease by at least 2% the rate of growth.
c) The method adopted for the Deficit decrease will adversely affect productivity, tax collection efficiency and aggregate Demand and Supply.

The bill is on the table. We cannot pass it fully to our children. Europens do not want to take it. The process of attempting to pass it to different groups of society has started!

GOOD LUCK TO ALL !