I exhort the politicians and bureaucrats of Europe to think again, to do better. The proposed Greek bailout entails too much intervention into the Greek economy and too many restrictions on the sovereignty of the Greek people. It will not work. The difficulties will endure for too long. It will all unravel.
A much better and more effective solution is possible. The Europeans should employ the well-proven and effective economic theory of Quantitative Easing .
I am surprised Paul Krugman and Joseph Stiglitz have not already recommended this.
The European Central Bank should simply print another €400 billion.
Use €340billion to pay off Greece’s creditors.
Have a little over to provide some capital to give Greece a new start.
Benefits all round.
Creditors get paid.
Greece becomes debt free.
No austerity needed.
Greeks can become proud, happy and prosperous again.
Silly Maggie Thatcher proved wrong.
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I am of course pulling your leg. You do not need a PhD in economics to appreciate that printing money is not the way to prosperity. For what my mother had to say about this, see my 2013 essay Money Doesn’t Grow on Trees.
Margaret Thatcher’s pithy remark has been much quoted in relation to the current tragedy: “The trouble with Socialism is that you eventually run out of other people’s money”.
Frederic Bastiat’s photo honours the great 19th century French economist and his famous, ironic petition on behalf of the manufacturers of candles, lanterns etc. His demolition of the arguments in favour of tariffs are still as pertinent today as they were in 1851. His work is still in print. You can buy The Bastiat Collection here.
For more, read my book The Fragility of Freedom: Why Subsidiarity Matters
