Although
it takes a little longer than bombing, one sure way to destroy a nation
is from within. Just ruin a nation's people, and you can walk right in
and take over. In Cormac McCarthy's 2005 novel No Country for Old Men,
Sheriff Bell muses: "I think if you were Satan and you were settin
around tryin to think up somethin that would just bring the human race
to its knees what you would probably come up with is narcotics." Surely
no sober person would disagree with that; just look at our neighbor
across the Rio Grande.
There's another road a nation can take to perdition that is just as sure as drugs, and that's debt, as in sovereign debt -- i.e., a nation's debt. When a nation goes too deeply into debt, its options become sorely limited. If a debt-laden nation tries to borrow its way out of debt by floating new bonds, it may find that it must pay ever-higher interest rates to attract investors. If a debt-laden nation has its own currency, however, it can "print" more money to pay off its debt. Of course, nations in the Eurozone don't have that option.
Ultimately, a nation's creditors might ride to the rescue and restructure loans, even forgiving (writing off) a portion of their debt. But these final accommodations with debtor nations come with a price. In exchange for restructured loans or infusions of more cash from new loans to help them get on their feet, a nation must agree to make severe alterations to the way it operates. A nation must cut back on government spending for entitlements and pensions. It's called "austerity," and it's not going down very well in the debtor nations of the Eurozone, as the mayhem in their streets confirms.
If a nation faces a debt crisis, it is left with no good options. The starkness of what must be done to deal with a nation's debt is so daunting that some want to just default and start over. In such an endgame, individuals must decide what is best for them. They may send their bank deposits abroad, before the government confiscates them. And the young, who didn't cause the crisis, may decide to seek opportunity abroad, which leaves a debtor nation that much poorer. The thought is to save oneself, not one's nation, which is seen as beyond redemption. Time to abandon ship!
There's another road a nation can take to perdition that is just as sure as drugs, and that's debt, as in sovereign debt -- i.e., a nation's debt. When a nation goes too deeply into debt, its options become sorely limited. If a debt-laden nation tries to borrow its way out of debt by floating new bonds, it may find that it must pay ever-higher interest rates to attract investors. If a debt-laden nation has its own currency, however, it can "print" more money to pay off its debt. Of course, nations in the Eurozone don't have that option.
Ultimately, a nation's creditors might ride to the rescue and restructure loans, even forgiving (writing off) a portion of their debt. But these final accommodations with debtor nations come with a price. In exchange for restructured loans or infusions of more cash from new loans to help them get on their feet, a nation must agree to make severe alterations to the way it operates. A nation must cut back on government spending for entitlements and pensions. It's called "austerity," and it's not going down very well in the debtor nations of the Eurozone, as the mayhem in their streets confirms.
If a nation faces a debt crisis, it is left with no good options. The starkness of what must be done to deal with a nation's debt is so daunting that some want to just default and start over. In such an endgame, individuals must decide what is best for them. They may send their bank deposits abroad, before the government confiscates them. And the young, who didn't cause the crisis, may decide to seek opportunity abroad, which leaves a debtor nation that much poorer. The thought is to save oneself, not one's nation, which is seen as beyond redemption. Time to abandon ship!
No comments:
Post a Comment