The Greek Misprize

Sometimes a great misunderestimation.

George W. Bush’s “misunderestimate” still has a jolly ring to it, in my ear, just as does the common barbarism “irregardless.” Yet I realize that, in both cases, the prefix adds no new meaning to the word it would seem to modify.

Regardless, underestimation is today’s theme.

Matthew Feeney, at Reason​.com, notes the shock-​without-​awe of the Greek government’s 2013 budget, just released. “The budget is worse than the 2010 projections,” he notes. And that simple statement almost qualifies as understatement:

The IMF had been hoping that the Greeks would manage to get their debt to GDP down to 120 percent by 2020. Considering that the newest budget projects a debt to GDP rate of 184.9 percent in 2016 it is unlikely that this goal will be reached.

That 184.9 percent figure was revised up from previous estimates of 179.3 percent.

The amount of debt is now way beyond the country’s annual income, as measured by GDP. I’m not one to rely heavily on GDP figures, but we need some comparison, and a market/​private sector income figure would not make the 2013 ratio look any better.

And this is not a new thing. The Greeks have been underestimating their debt-​to-​GDP ratio for years now, as a nifty graphic from Zerohedge shows.

When a country is as overladen with government workers and other tax consumers as Greece is, this is to be expected. Zerohedge was right in 2010, to note that “Greece just got bailed out so it can get into even more debt!” At some point, hope morphs into fantasy and misunderestimation of future insolvency becomes a way of life.

This is Common Sense. I’m Paul Jacob.