Craig Bamford - Comments

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Running Out Of Cake: Greek Crisis Reveals Consequences Of Socialism
5 years ago

Yes, Mike, governments can create money. That's what mints are for. That's what currencies ARE. The value vis a vis other currencies fluctuates, but that's what most governments do. They've been doing it for thousands of years. They'll keep doing it. Kind of amazed you hadn't noticed.

Sure, Greece doesn't. But that's the entire problem. If they had their own currency, instead of suffering from the madness of monetary-union-without-fiscal-union, their currency would simply devalue. It'd reduce demand for imports, reduce labour factor costs, and increase export competitiveness--all of which would help Greece get back on its feet.

But they can't do that. They're stuck using the Euro. Since the Euro principally exists to prop up Germany's export competitiveness, the Greek just suffer; and since austerity demolishes GDP so badly that it does more harm than good, it's impossible for their economy to ever recover.

Hope that helped.

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