Free Republic

For almost six years Greece has been on the cusp of financial disaster. Its Northern European and international creditors have extended loans, suspended interest payments and forgiven some debt. But European lenders have also stubbornly kept to the old-fashioned principle that debtors freely borrowed their money from lenders, and therefore most borrowed money must be paid back, regardless of the current financial status of the debtors. Greece counters that after all sorts of austerity budgets, it simply can no longer inflict the necessary pain on its relatively tiny population to squeeze out enough cash to pay its well-off creditors. In...

I’m tempted to feel a certain degree of sympathy for Paul Krugman. As a leading proponent of the notion that bigger government stimulates growth (a.k.a., Keynesian economics), he’s in the rather difficult position of rationalizing why the economy was stagnant when Obama first took office and the burden of government spending was rising. And he also has to somehow explain why the economy is now doing better at a time when the fiscal burden of government is declining.

Europe's struggles prove that "austerity" fails! So say the Big Spenders. With a condescending sigh, they explain that Europe made deep cuts in government spending, and the result was today's high unemployment. "With erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far," writes Paul Krugman in The New York Times. One problem with this conclusion: European governments didn't cut! If workers pick through garbage, cuts can't be a reason, since they didn't happen. That doesn't stop leftists from complaining about cuts or stop Europeans from protesting announced austerity plans. But if...

Greece wants two mulligans -- like a golfer demanding second chance, a do-over tee shot, times two. The immediate and obvious mulligan is a new national election. The teed-off Greek electorate teed up on May 6, but fractious voters produced a scattershot result. No single party achieved a parliamentary majority. The leaders of Greece's three largest political parties subsequently failed to form a coalition government. Their disagreements are fundamental. During the coalition discussions, the Syriza Party (Coalition of the Radical Left/Unitary Social Movement) announced it would not participate in any government that imposed austerity. Austerity is shorthand for economic reform,...

The Greek parliament approved tough new austerity measures to help curb its soaring debt and deficit as thousands of people demonstrated against them in Athens. European Union leaders are holding an emergency meeting on the crisis on Friday. Thousands of protesters again took to the streets of Athens (on Thursday) to register their dismay at tough spending cuts that will affect their pensions and salaries. But the Greek parliament went ahead and voted in favor of the package of tough, new austerity measures, demanded by the European Union and the IMF in exchange for a $145 billion loan deal with...