Private, NOT Public Debt Destroyed the Greek Economy

It's a shame to destroy such a popular conservative narrative, but once again, those pesky "fact-things" keep getting in the way!

Greece’s government expenditures were basically stable through the ’90s and most of the 2000s, increasing rapidly only as a result of the 2008 recession (until the austerity programs began to take effect in 2010).  Moreover, Greece was not a massive outlier in terms of government spending levels.  Prior to the crisis, Greek public spending as a percentage of GDP was on the lower end compared to France, Italy, and Germany:

The problem with the Greek economy lies not in the public, but in the private sector.

But as with most of the other troubled eurozone economies, the major problem for Greece, the authors conclude, can be found in the private sector financial balances: 

[G]rowth in Greece during the 2000s—similar to the United States—was fueled by consumption financed by running down households’ financial assets, and/or by net borrowing. It was this unsustainable process, rather than an excessive government deficit, that put Greece on an unsustainable path.