Day: November 6, 2011

Sunday, 6 November 2011

08:16 – The G20 conference ended in failure as far as the EU was concerned, with the other nations telling the EU that they wished them well but they were going to have to come up with the money themselves to bail out the euro. The problem with that is that the EU simply doesn’t have the $3 trillion to $5 trillion it needs, just for a start, to bail out Italy, Spain, and France, not to mention the other smaller nations that are under threat. Meanwhile, while the G20 was sitting around the table discussing what emergency measures to take to save Italy from collapse, Berlusconi fell asleep. Twice.

The other G20 nations pushed for the European Central Bank to address the crisis by monetizing the debt by printing euros. Lots of euros. Euros by the ton, literally. At this point, the only solution, bad as it is, that anyone can see is for the ECB to inflate the euro dramatically. But the ECB is having none of it. And they’re right, if not in the short term, certainly in the medium- and long term. At this point, the eurozone is going to take a huge economic hit no matter what happens, as will, to a lesser extent, non-eurozone EU countries, and, to a lesser extent still, the rest of the world. Right now, all the arguing is about who is going to take how much of that hit, and how.

The takeaway lesson from all of this is that government and the economy is too important to be left to the politicians, nearly all of whom are, at best, mediocrities. That’s why we need strong Constitutional protections that will handcuff the politicians, limiting the damage they can do. A rigid balanced-budget amendment that makes no provision for exceptions, including in time of war, would be a good start.

// ------------------------------------------------------------------------------- // end of file // -------------------------------------------------------------------------------