Underpants Gnomes

The austerity story always had as much of a logic to it as did the underpants gnomes, which is to say absolutely none. Who could have predicted that when people have no jobs and no money, nobody spends the money they don't have, businesses close, and tax revenue disappears? WHAT ABOUT THE CONFIDENCE FAIRY!!?!!!?

Salaries and pensions in the private and the public sectors have been cut by up to 50 percent, leaving Greece 495 million euros short of its revenue targets in the four months ended in April, according to the Greek Finance Ministry. With less cash, consumers have curbed spending, leading thousands of taxpaying businesses to fail.

Income expected from a higher, 23 percent value-added tax required by the bailout agreement has fallen short by around 800 million euros in the first four months of 2012. That is partly because cash-short businesses that were once law-abiding have started hiding money to stay afloat, tax officials said.

They're failing to collect back taxes because people can't afford to pay those either.