Wednesday, May 23, 2012

A Greek Tragedy?

Greece is fast approaching the wall. How ironic that NPR and the BBC see fit to report the news as though this is something that is caused  by Germany’s hard-nosed refusal to modify its demand for meaningful and credible fiscal reform. Interview with man-in-the-street who blames the Greek government and Germany, but mainly Germany. Ergo, its Germany. Sure, when I can’t pay my credit-card bill, that’s the credit-card company’s fault, right?

All the pundits I read suggest that Greece exiting the Euro-zone is a bad thing for everybody. I don't see it. Sure it’s bad for Greece and the Greeks - because it will mean a resort to unconstrained growth in domestic-currency-financed-government-spending, in other words, growth of government and a shrinking of the already shriveled private economy. And this will lead to inflation, the worst and most destructive of all taxes, which will lead sooner or later - probably not so later - to economic meltdown. By that time probably most of the Greek labor force will have emigrated.

But, it would be a good thing for the Euro-zone if it sent a clear message to the rest of the PIGS - the PIS - and maybe France too with its brand-new, rich, swanky, socialist president. A Euro-zone with one less deadbeat to support, and the rest in fear for their economic lives, why is that bad? The bond-holders take their knocks – what’s left to take. Some real belt-tightening occurs. Things would definitely get better after that. Of course, that’s a best-case scenario.

I don’t know the political details well enough to know what spurred Angela Merkel to hold fast, what vested interests, what real principles. Whatever it was, good for her!!

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