May 22, 2012

Welfare Socialism in Macrocosm

What do you do when thanks to years of overspending and failure to live within your income, your credit sucks? Do you [a] work on improving your obviously horrid budgetary habits, or [b] try to suck off  the good credit of someone more restrained and prudent by having them co-sign your loans, thereby dragging their credit rating down some?

Well, now we know how many of Europe's governments would answer that question.

Germany rules out common euro bonds

Germany refused to share the debt burden of stressed eurozone peers on Tuesday, ignoring two of the most influential international economic bodies which offered support for proposals championed by Paris, Rome and Brussels ahead of a summit.

In case you couldn't guess, the "two influential international economic bodies" are the OECD and the IMF, who will be next in line to be asked to prop up the profligate spending. Basically what it boils down to is that France's new socialist president, among others, would like Germany to pick up the tab for bailing out mismanaged spendthrift EU nations such as Greece. With Germany saying nein on "loaning" any more money directly to Greece, Fran├žois Hollande's solution is to back-door the deal by dragging germany into co-signing more bad loans.

They're running out of other people's money.

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