The GFC Can be Solved.....

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kabayiri wrote: »

Intrinsically, I would want to honour debts. But then I do believe that people should have a second chance to right mistakes; a reset from past error. It's not easy to reconcile these positions.

Question is though, whether people's debts should be guaranteed by a friendly party who can afford to pay if they can't, or whether the lender must always necessarily take the loss.

Somebody pays. But if it's always the lender, lending will become unpopular and borrowing will become expensive.

The reason to be terrified of a Greek default is the interest rates that other countries will then have to pay, once the eurozone has shown what it's made of.