I got this picture of the streets in Athens from close Seattle friends that are there right now! Why the riots? Previous Greek governments (‘administrations’ as we call them in the USA) incurred massive budget deficits, and for a long time misrepresented how big the total debt outstanding was to foreign investors. In Oct 2009 the new government revised the estimate of their 2009 deficit from 6.7% of GDP (Gross Domestic Product) to 12.7%.* There’s more information in the Bloomberg Business week article. Greece already got a loan of € 110 billion last year, and had hoped to increase its revenues after receiving the loan by 8.5%. Instead it has fallen by 9.2% so far this year, no doubt because of decreased economic activity (including tourism). So the government has no choice but to raise taxes and curtail its spending, which makes people used to paying lower taxes and getting jobs, pensions and social security types of payments from the government, very angry.
*In the USA our deficit is currently about 7% of GDP (rough numbers, $1 trillion deficit, $14 trillion GDP). The national debt as of May 6, 2011, is $14.32 trillion. The Federal debt ceiling needs to be raised, and soon.
