True, but as tokkun said it only works as long as you´re able to grow taxes at the same rate as your spending.
Tax evasion isn't a financial problem, it's a morality problem.
You want 34% of the gdp on taxes? You raise them. Tax Evasion or not.
There'll be inefficiencies and morality issues, but there's no reason to believe double gdp isn't double taxes, if not more - rampant tax evasion or not.
Also, it should be said that for all their efforts and campaigns and blackmails, the 'creditors' haven't seen a dime out of Greece. Despite all the best efforts and IMF plans, there has been no primary surplus in the four years before 2015 - and that's because the cuts to spending made the economy collapse by a bigger percentage than the money they saved, resulting in a net LOSS.
In a zero-bound economy (Read: depressive crisis), austerity makes the gdp/debt ratio worsen, not get better. We have more or less conclusive data on this.
In my last post I object to your view that this problem, or any other, can be explained by a model in which there is a camp of good guys, who subscribe to the truth, and a camp of liars, who deny the truth. Your response is to put me in the bad camp, even though my expressed opinion is completely incompatible with that, and to prove your supposed truth ("Austerity has been throughly debunked as a viable economic theory") by posting some sourceless excel graph which I had to google to find some description about. Turns out it is someone's projection versus the IMF's.
It's difficult not to be under the impression that you seem to be trying to declare something to be Official Data, and then denounce anyone who disagrees (or in my case agrees) with you as Deniers, who are eo ipso wrong, in lieu of proposing substantial arguments.
I would point out the benefit of doing the latter in stead is a good debate in which everyone learns.
I was using the "You" as i was using it in the post you quoted.
The graph is one of many, but if you prefer, i'll limit myself to some sources of austerity supporters turning around:
http://www.newyorker.com/news/daily-comment/its-official-austerity-economics-doesnt-work
http://www.theguardian.com/business...estimated-damage-austerity-would-do-to-greece
I don't claim i, or "My camp", whoever that is, has "Truth". I claim there's been enough data collected on the theory of expansive austerity, or "restored market confidence through austerity",
The theory of expansive austerity is that a reduction in government spending during a crisis will make the economy better through increased confidence; the data for the last years, for example:
is pretty clear on this.
There's a very real correlation between government spending and economy growth, both in the positive and in the negative spaces.
There's also that once the predictions of a theory come completely off-base, the theory is generally discarded - this isn't happening because politicians aren't very good at mea culpas, and will fight to the death for something demonstrably false if they've endorsed it enough.
