Consider what Greece would get if it simply stopped paying any interest or principal on its debt. All it would have to do then is run a zero primary deficit — taking in as much in taxes as it spends on things other than interest on its debt. But here’s the thing: Greece is currently running a huge primary deficit — 8.5 percent of GDP in 2009. So even a complete debt default wouldn’t save Greece from the necessity of savage fiscal austerity.An astute blogger shoots back:
Mr. Krugman your world view is full of debt slavery.
Greece should leave the tyrannical European Union and then if it wishes can devalue their currency but not too much.I respond:
Precisely correct on Krugman's worldview. When he utters "the necessity of savage fiscal austerity," you can almost imagine the fangs emerging from his dracula-like bloodlust. This is the type of mentality which is caused by the ideology of monetarism, i.e. the worship of money as an end unto itself. Thanks for being so forthright as to exhibit your true inner self Mr. Krugman. Bravo.