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Bankruptcy is the only way Greece can fashion a new beginning
The Washington Times ^ | July 5, 2015 | Stephen Moore

Posted on 07/06/2015 11:52:23 AM PDT by Tolerance Sucks Rocks

Almost every option facing debt-drenched Greece is bad, but there is only one that will end this Greek tragedy for good. Let Greece go bankrupt. Then let this once-rich nation, hit the restart button to rebuild its economy.

What I’m suggesting for Greece is what might be called the Detroit option. Put Greece under receivership and let these new authorities figure out how to manage the debt and decide who will take a haircut and how big. Pensioners, bondholders, welfare recipients, government workers, the International Monetary Fund, all will have to settle for less — maybe a lot less. It’s tough love, but it’s the only way out. More bailouts and debt extensions will only delay the crash of the socialist Greek economy.

I can already hear the heart palpitations of the Wall Street investors. This option puts them in the fetal position with the thumb in the mouth. They worry about the entire world economy collapsing as creditors flee the sovereign debt of one fiscally bloated nation after another — Spain, Argentina, Venezuela, Puerto Rico, Portugal. All of them have the same defects: obese welfare states, leaky pension systems and tumbling tax collections.

But every option is worse. For six years the brainiacs at the International Monetary Fund and the European Union have devised one bailout and debt restructuring scheme after another. None of them have worked. They have only saddled the Greek citizens with even more long-term debt that can’t be paid back. Greece is now sitting on $350 billion of debt. It is unpayable and the international monetary experts are deluding themselves into believing that by some magic stroke, this nation of less than 11 million citizens will some time in the future come up with the funds to repay it.

(Excerpt) Read more at washingtontimes.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Germany; Government; News/Current Events; Philosophy; US: Michigan; United Kingdom
KEYWORDS: alexistsipras; bankruptcy; benefits; creditors; debt; debtcrisis; default; detroit; drachma; euro; europeanunion; france; germany; greece; grexit; imf; nato; receivership; restructuring; socialism; syriza; taxes; unitedkingdom; welfarestate
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To: Trapped Behind Enemy Lines

“With $20 trillion in national debt, close to $200 trillion when unfunded liabilities in entitlement programs are taken into account, can the U.S. be that far behind from Greece?”

Unlike Greece, which can’t print its own money, the United States can and does. The money supply, the amount in circulation, has almost quadrupled since Obama took office. They will simply keep printing money until it has no value, but the debts are “paid.” Those of us who saved money are the ones losing.


21 posted on 07/06/2015 12:55:52 PM PDT by Gen.Blather
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To: Gen.Blather

Yes. Agreed. We have that advantage over Greece.

We can produce our own heroin.

But how long can that last?


22 posted on 07/06/2015 12:59:13 PM PDT by Trapped Behind Enemy Lines
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To: longtermmemmory

I’m certainly not defending the EURO experiment.

However, when you borrow and spend more than your country brings in
bad things are going to happen.


23 posted on 07/06/2015 12:59:29 PM PDT by tennmountainman ("Prophet Mountainman" Predicter Of All Things RINO...for a small pittance.)
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To: Trapped Behind Enemy Lines

“But how long can that last?”

The Soviet Union made it from 1917 to 1989. We technically went communist in 2008. If we’re following the Soviet trajectory then we’ll have about 70 years to go and about fifty million untimely deaths.


24 posted on 07/06/2015 1:02:36 PM PDT by Gen.Blather
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To: Tolerance Sucks Rocks

Just substitute public pension systems for Greece for future headlines in the USA. Overpromised and underfunded with liabilities that simply cannot be paid without bankrupting states, cities, municipalities.


25 posted on 07/06/2015 1:04:48 PM PDT by 1Old Pro
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To: Tolerance Sucks Rocks

Here’s the problem: Greece still needs more money. Bankruptcy protects you from creditors but makes it difficult to borrow money immediately.


26 posted on 07/06/2015 1:05:19 PM PDT by AppyPappy
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To: Sherman Logan

How does bankruptcy, in and of itself, fix anything?

Bankruptcies destroy, they don’t create. Creation, if it ever occurs, take place after the bankruptcy.


27 posted on 07/06/2015 1:20:26 PM PDT by WayneS (Yeah, it's probably sarcasm...)
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To: Sherman Logan

PS - Thanks for the uninvited, unwarranted and unnecessary lecture.


28 posted on 07/06/2015 1:21:17 PM PDT by WayneS (Yeah, it's probably sarcasm...)
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To: WayneS

True enough.


29 posted on 07/06/2015 1:29:57 PM PDT by Sherman Logan
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To: tennmountainman

When the credit card is declined for a prolonged period, one is faced with the reality of “work or starve”.


30 posted on 07/06/2015 2:50:28 PM PDT by ctdonath2 (The world map will be quite different come 20 January 2017.)
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To: GOPsterinMA; Viennacon

What Greece needs is a right-wing military dictator.


31 posted on 07/06/2015 2:59:58 PM PDT by Impy (They pull a knife, you pull a gun. That's the CHICAGO WAY, and that's how you beat the rats!)
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To: Impy

I agree.

Jamal’s available.


32 posted on 07/06/2015 3:58:03 PM PDT by GOPsterinMA (I'm with Steve McQueen: I live my life for myself and answer to nobody.)
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To: Tolerance Sucks Rocks

Re: “If Greece is not bailed out...Wall Street investors...worry about the entire world economy collapsing as creditors flee the sovereign debt of one fiscally bloated nation after another.”

At last. Now I get it.

For two years I’ve been waiting for someone to explain why Greece - a country with a GDP about the size of Iowa - is such a big deal.

I do understand that Greece has racked up a huge debt. Is it like $200 billion? And the debt is (was?) held mostly by large European banks?

But, really, if Greece defaults, can’t the $15 trillion European Union just swallow this bitter unpaid debt pill and move on?

But it’s not just Greece. It’s the question of who will bail out ALL the other debt scofflaws!

Thanks for posting.

I’m familiar with the author - Stephen Moore - but this is the first lucid explanation I’ve heard about the genuine fear I sense in the international financial community.


33 posted on 07/06/2015 5:46:18 PM PDT by zeestephen
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