Europeon Debt Crisis: There isn't another option EXCEPT austerity.

[Kasz216]

routsounmanman said:

Kasz216 said:

Lately there have been more and more articles in the US complaining about Europeon Austerity and how it will destroy the country.

It makes me wonder what other option there actually is.   The europeon Debt Crisis is happening because a number of countries didn't cut spending when they could and are rapidly approaching (or already reached) the point where they can't pay off their debts.

Some people are saying that instead they need to keep spending up, possibly even increase it and hope to outgrow the debt.

Which seems impossible just based on the fact that they weren't outgrowing their debt even when the economy was good.

The only real way to get out of it, is to try and spur growth while NOT increasing debt.  In otherwords, Austerity, and then a bit beyond normal austerity to provide pro-growth changes.

In otherwords cut more then you need to and put that extra money elsewhere.

I really think that the Euro was the stupidest idea of the 21st century, Europe must leave it back and go back to national currency. And many countries drowning in debt is not just because of excessive spending, it's also due to the Euro strangling their economies.

While countries like Germany benefit greatly from the Euro as the other participating countries keep its value low and keeping their exports competitive, others like Greece, Spain, Portugal that have been relying on devaluing their currency to stay competitive, ended up choked, thus the debt bubble.

Another plan I can think of, is a Marshal plan to any country now in trouble, much like Germany and other countries got after WWII. But that's very doubtful with the current political scheme.

One thing's for sure, austerity brings recession, which in turn grows deficits and debt, a deadly spiral. Greece will never recover from the debt, even after a long due PSI, and after we fall, Portugal, Ireland and Spain will follow...

A) Greece was in a Death spiral before austerity.  Even when it was having growth, it's growth was growing faster.

B) Who's going to pay for this Marshal Plan?  Germany doesn't have the cash to bail out Greece, Italy, Spain, and likely even France.