29 June 2011

Greeks Approve Suicide Pact

You know, I was in the car, talking with my son about Greece, and I said that the Greek parliament had approved their own suicide pact by approving the austerity program demanded by the ECB and IMF.

My son, ever the precocious almost 11-year-old, asked me why it was a suicide pact, and I explained that austerity causes the economy to contract, which makes you less able to repay your debts.

I said that it was like demanding a salary cut so that you can better pay your debt.

My son did not understand this at all.

I explained that it was because they are stupid, and by "they" I mean the European Central Bank, the International Monetary Fund, and Angela Merkel.

Charlie did not find this a satisfying answer, and, truth be told, I don't find it a particularly satisfying answer.

1 comments :

Yoram Gat said...

Your son is quite right - stupidity is a very unlikely reason. It is much more likely that someone is making money over this or gaining a political advantage.

This was certainly the case when the same methods were used to impoverish third world countries. Keeping those countries poor made extracting their natural resources and exploiting their labor much cheaper.

Post a Comment