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Exactly. The answer to Noah's question is barely two sentences long, and it runs something like "Because people saw how Austerity hurt Greek citizens, and peopl
by Phiwise_ 5y ago
Exactly. The answer to Noah's question is barely two sentences long, and it runs something like "Because people saw how Austerity hurt Greek citizens, and people saw how low confidence hurt Greek businesses and governments". Lazy debt and currency management ultimately serves neither the desires of the pro-business nor the desires of the pro-social program political wings.
- tuatoru 5y agoGreece does not have its own currency. Its situation was different. At the time (2009), many economists expected Greece to bail out of the Euro, which is not an "optimal currency area", taking short term pain for long term gain. It didn't, instead opting for short term pain and long term pain.
- nradov 5y agoHaving your own currency doesn't really solve the problem. Sure in theory the US could inflate the currency enough to drastically reduce the value of outstanding debt. But we would still have to borrow going forward, and that level of inflation would drive T-bond yields through the roof. That will mean short and long term pain no matter what.
- toomuchtodo 5y agoLessons from the yields on Japan’s sovereign debt, their debt to GDP, and their historical and forward looking inflation indicate a different forecast. https://www.bloomberg.com/markets/rates-bonds/government-bonds/japan https://www.bloomberg.com/markets/rates-bonds/government-bon... https://en.wikipedia.org/wiki/National_debt_of_Japan https://en.wikipedia.org/wiki/National_debt_of_Japan https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=JP https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?location...