Posts
Without debate:
"The move to tax bank deposits is a first in the euro-zone crisis, and analysts fretted that the tax's wide scope and its sudden nature—banks are shut and Cyprus plans to deduct the levy before they reopen—could shake the currency bloc's wobbly confidence. On Monday, Cyprus put off parliamentary debate on the proposal until Tuesday, two days behind the original schedule, and said banks will remained closed until Thursday."Cypress got into this mess because they failed to understand that Math isn't optional. Sooner or later the US will be faced with a similar choice unless our government learns the same.
One important difference: our (USA) government can create the money it spends from thin air. Of course, that carries consequences, too. Namely, the purchasing power of savers is reduced through inflation.
ReplyDeleteThe difference is that over there, the people can scream and riot and demonstrate against the evil politicians who stole their savings. Over here, they are just going to scratch their heads and wonder why evil businesses are raising their prices so much.
Something to think about: do you think the USA's ability to inflate away its spending makes it more or less likely that it will tighten the belt? If you think it's more likely, I have an island in the Mediterranean I'll sell you cheap.