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Was the Greek bailout a huge mistake?
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jducoeur
Those who are interested in politics and economics might enjoy this three-part series over on Medium. (The link is to part 3; follow the links there to parts 1 and 2.) This trio of articles is called "Relitigating 2010", and is a serious, principled look at the arguments that the original bailout of Greece was a gigantic mistake, and that something else should have been done instead.

It's one of the better pieces of counterfactual analysis I've seen, digging deep into the finances, economics and politics of where things were then and what really happened. It's nicely even-handed, and winds up admitting some possibilities, but mostly argues, persuasively, that people making this point (especially in the US) are deeply misunderstanding the reality of what was going on in Europe in 2010, and that their crisis was very different in some critical ways from our crisis. (And that, the economic arguments aside, folks are mostly glossing over the political realities.)

It's wonkish and detailed, only for the folks who enjoy politics and economics, but it's well-written, not too long, and refreshingly willing to point out the underlying monetary mistakes that turned this from a crisis into a bit of a disaster. Worthwhile reading for serious fans of The Economist...

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I'll have to read it some other time, but in general, I thought the entire Euro-zone has screwed up the recession.

Kenseyen Economics would have authorized the Greek government to issue more Euros, without implementing austerity methods. While I'm not a huge fan of Kemseyem economics, if you're going to pump cash into an economy to keep it afloat, you should do it right.

If you're were going to the opposite extreme, you let Greece (effectively) declare bankruptcy, and restructure their debt into a something they can actual pay back without massive changes to their existing economy. (Or you make them implement Austerity with less restructuring, but making sure you don't undermine the existing economic system, so they can actual make their payments.)

Either way, giving Greece more debt in order to stay afloat, when they couldn't make their current payments, without restructuring their debt, is nuts. Making them undermine their own economy as a requirement just guarantees further economic deterioration.

Or you just let Greece default and deal with the consequences. The euro will tank immediately, but it will recover once creditors figure out how to deal with their bad debt.

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