Viewpoint: Why bailouts are bad

Bailouts are bad ethics and bad economics, argues philosopher Jamie Whyte.

Newspapers last Friday ran a photo of Angela Merkel, the German chancellor, surrounded by parliamentary colleagues. They had just passed a bill allowing them to provide hundreds of billions of euros for the European Financial Stability Fund (EFSF) - a fund used to "bail out" eurozone governments that cannot pay their debts.
From their delighted smiles, you might have thought they had done something to be proud of. They are lost to all shame.

Seeking a profit, some people lent to the Greek government. As it turns out, they made a mistake. In the process of promising gifts to voters, the Greek government has increased its financial obligations so far beyond what it can cover from its tax revenues that no-one is willing to lend it any more.

Without borrowing more, however, the Greek government cannot repay the debts that are coming due. Its current creditors are going to lose their money.  Read More

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