My newest Fox News piece
starts this way:
As we watch the Eurozone struggle with its financial challenges Keynesians keep telling us the solution to our economic problems is to spend more money, to pile up bigger debts.
A week and a half ago, Standard & Poor’s downgraded the debt of more than half of the Eurozone's countries, and the failure of those policies should be very obvious by now.
Solving the Greek debt crisis hit yet another snag on Sunday afternoon. New aid for Greece from the IMF, the European Commission and the European Central Bank would have relied on private bondholders “voluntarily” agreeing to a 50 percent cut in the value of the Greek bonds they hold as the Greek government claims it can't afford the interest rates demanded on the remaining debt. Unfortunately, for the Greek government, it lacks the power to abrogate the rights of foreign bondholders.
Greece can't simply apply the Obama administration's method of doing away with the rights of GM's and Chryslers' bondholders.
The European countries that have fared the best, such as Germany and Poland, rejected the Keynesian medicine. In contrast, countries following the Keynesian path with massive deficits to try to "stimulate" the economy -- such as Greece, Portugal, and Ireland -- have done poorly, with low growth and increased government debt. . . .
Labels: EuroFinancialCrisis, Op-ed