Beware of Greeks Bearing Bonds

a)  To me, the most interesting part of the reading was the part about Greeks paying, or rather not paying, taxes.

"The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense."

Most surprising to me was that even doctors who make millions of dollars per year report incomes under 12,000 - low enough not to pay any taxes.  This is drastically different from the culture of the U.S. where tax fraud is not only very strictly monitored but also not socially acceptable.

b)  Greece's economy threatens the rest of Europe because their economies are so intertwined.  When Greece joined the European Union the convinced the other countries that they would be a safe, stable economy.  This led foreign countries and investors to invest in Greece's economy.  Not only will those investments be lost, but as Greece uses the Euro, the value of the Euro will depreciate.

c)  Raising taxes and decreasing government spending will significantly decrease GDP.  After increased taxes, consumption in Greece will presumably decline.  In the GDP equation (GDP = C + G +I +Ne) both consumption and government spending will decrease.