New statistics out of Greece show that austerity shrunk the economy more than expected last year. GDP in Greece fell 6.8% in 2011, and a slightly faster 7% in the fourth quarter. The country is in a fifth straight year of recession, approaching a full-on depression.
European leaders are still trying to impose more austerity, but some Eurozone finance ministers may be trying to force a default and exit from the euro.

As I mentioned on Sunday, the Greek Parliament agreed to a bailout deal that exchanges funds from Europe for new austerity measures that will sink the economy even further. The measures effectively destroy labor law and decimate wages.

Amid general strikes and riots in Athens, the Greek Parliament passes a late-night vote on new austerity measures that are seen in European capitals as a prerequisite to the release of bailout funds for Greece.

Greece has agreed to new bailout terms, with brutal austerity measures attached, but Eurozone finance ministers don’t believe the Greeks will follow through, so they’ve held up the provision of the funding.

Greek bailout talks have deadlocked again, but at the moment the culprit is not the hedge funds seeking a higher payout on the distressed debt they bought, but the “troika” of the EU, ECB and the IMF. They gave Greece a Monday deadline to accept bailout terms. And those terms, frankly, are totally insane.

War has broken out between West Virginia, Ohio and Pennsylvania over who can give away more tax dollars to Shell Oil.

The private sector added 257,000 jobs in the month, with the public sector again reducing by 14,000. If we had a public sector that wasn’t consistently shrinking as it has over the past several years, the country would be in a much better economic position.

The Administration will release details on its mass refi proposal today, which is a bid to increase funds in the hands of homeowners at a low cost to the government. This is a stimulus policy, which could be effective depending on the scale. But refis aren’t enough to save people’s homes, and certainly not underwater homes.

After fits and starts, Greece may be on the verge of a deal on its private sector debt. Greece will apparently get the lower interest rate it wanted out of its creditors, though not all of them will participate, and the ECB is refusing to take the same haircut on the debt it holds. Meanwhile Greece is agreeing to impose even more austerity measures, to meet arbitrary debt limits, even though their economy is in depression.

Today is Earned Income Tax Credit (EITC) awareness day!