So do you think PR will work out worse than Greece, or will Greece's part of the 'mutual benefit' still leave them in rough shape compared to a bailed-out PR?
In the long run, Greece will be the better off of the two if it learns the fiscal lessons the separation will force upon it. Of course, Greece could wind up a Russian satrapy.
A bailed-out PR will be the worse off, morally, since they'll have learned that freeloading works for a while longer. A bailed-out PR also will be at best just as badly off as a separate Greece since such a PR still will have no fiscal discipline, no incentive to get any, and so will be just as deeply in debt in short order as they are now--with just as much to show for their debt as they have now.
Greece and the EU can be shed of each other to their mutual benefit. That's a lot less likely for Puerto Rico and the US.
ReplyDeleteEric Hines
So do you think PR will work out worse than Greece, or will Greece's part of the 'mutual benefit' still leave them in rough shape compared to a bailed-out PR?
ReplyDeleteIn the long run, Greece will be the better off of the two if it learns the fiscal lessons the separation will force upon it. Of course, Greece could wind up a Russian satrapy.
ReplyDeleteA bailed-out PR will be the worse off, morally, since they'll have learned that freeloading works for a while longer. A bailed-out PR also will be at best just as badly off as a separate Greece since such a PR still will have no fiscal discipline, no incentive to get any, and so will be just as deeply in debt in short order as they are now--with just as much to show for their debt as they have now.
Eric Hines
A bailed-out PR will also set a precedent for US states that do similarly stupid things with debt. That just does not sound like a good move.
ReplyDelete