Sunday, June 03, 2012

There Is Another Way

This column is mostly fine, but this just isn't correct.

Germany — the country that would have to pick up most of the bill to rescue its neighbors — could decide that not spending the money created greater dangers. The United States could find ways to help out despite fiscal pressures and Congressional hostility to foreign aid. A new consensus on common bank regulation could emerge. But, for now at least, the outlook is far darker than it seemed to be only a couple of months ago.

Nobody has to pick up any of the bill. The ECB can print free money and give to whoever they want, including the banksters. Now I get that there might be existing legal and political barriers to doing such things, but conceptually it is completely sound. Everybody gets a do-over! Huzzah!

The entire conversation is about how to fill the hole without anyone having to donate any of their own dirt to do so. Well the ECB has access to a precisely infinite amount of free dirt that they can dump down the hole for as long as is required.

There really is a pain free solution. Like all solutions it might bail out the wrong people, but that's going to happen anyway. This solution would bail out some of the wrong people without trying sending the bill to the poor and innocent.