May 10, 2010
European finance ministers agreed over the weekend to a rescue package for struggling Greece, with standby authority in case other debt-burdened nations like Portugal, Spain, or Italy should need it. The complex deal amounts to nearly a trillion dollars, an amount considered essential to calm financial markets with "shock and awe" credibility the earlier rescue attempts lacked.
But where do you get a trillion dollars? Europe has proposed to borrow some and print the rest. Both solutions are inadequate unless the troubled economies which borrowed and spent too much reign in spending that exceeds their economy's ability to pay.
The additional debt will need to be paid, and Greece is not going to become Germany, with it's strong economy, any time soon. So the conservative must pay the bills of the profligate. And in the fine print? You, dear reader, get to pick up part of the tab. The International Monetary Fund (IMF) is providing a third of the rescue fund. The IMF's largest contributor? The US taxpayer.
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