Is austerity helping or hurting Greece?

Unemployment has surged to 18.8 percent from 13.3 percent only a year ago. Overburdened public hospitals are facing acute shortages of everything from syringes to bandages because of budget cuts, with hiring freezes forcing the mothballing of operating rooms even as more unemployed are relying on the public health system. Rates of homelessness, suicide, crime and HIV cases from intravenous drug use are jumping…

But increasingly, critics of the quick-cuts theory are pointing to the worsening recession here as evidence that the medicine is killing the patient, with the nation’s sharp, sustained decline leading some economists to suggest that the country has entered a more serious depression. Some are calling for more-staggered cuts, an increased focus on modernizing the economy, and tax incentives — as opposed to recent tax increases — that could spur growth or at least ease the downturn.

“This idea of cut, cut, cut and tax, tax, tax is not going to work,” said Andonis Papagiannides, an economist and editor of Greece’s Economic Review. “It has sent Greece into a depression with no end in sight. They want milk, but you don’t get milk by killing the cow.”

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