On The Eurozone Crisis

The Natural Order blog has an excellent post on the financial crisis in Europe, which is brief, so I will publish it in full below. The title of the post says it all:

Corrupt EU public officials use “sleight of hand” to evade Rule of Law.

The post goes as follows:

Founding principles of the European common currency area require each euro-zone country to manage & be responsible for its own fiscal affairs. And EU treaties contain a “no-bailout clause” that forbids the currency bloc or any member to “be liable for or assume the commitments of” another EU country.

Following this thread, the European Central Bank (ECB) is barred from lending to countries or buying their debt directly.

EU public officials apparently view treaties as obstacles to be averted rather than honored. As such, they applied slippery “interpretations” of the documents so they can do whatever they please.

And so it is that the ECB said it will buy euro-zone government & private bonds “to ensure depth and liquidity” in markets. Now “bilateral loans” involving loans between countries will be permitted under the guise that lending countries do not purchase existing debt.

Anticipating challenges to their arguments, they have offer a strained interpretation of a clause permitting assistance under “exceptional occurrences”. This allows spendthrift governments overseen by irresponsible public officials to remain unaccountable.

When will European citizens rise up against the corruption of treaty obligations that were intended to stop such flagrant abuses?

Indeed, when will citizens rise? Why should common people take on the debt burdens of profligate, corrupt, wasteful States?

The great Murray Rothbard had given us all the right response to such situations:

Repudiate the National Debt

That's right. The national debt is not something that "we owe to ourselves," as its apologists and propagandists say. It is money borrowed by corrupt public officials for their own gains. If citizens forced the repudiation of sovereign debts, never again would public officials be able to borrow money. In any case, this is money borrowed from their clients, for interest that is paid out of tax revenues. In the final analysis, both socialism and Keynesianism are to blame. The final solution is an International Gold Standard that will put an end to fiat paper currencies and place "golden handcuffs" on all finance ministers.

But we were talking about the great Murray Rothbard. Luckily, LRC has his article advocating repudiation of the national debt available online for the entire world to read. It is here. My advice to the entire world is to study it carefully. In times like these, when governments worldwide have gone crazily corrupt and predatory, it is essential to read the advice of a true "economist" - defined as one who wishes to "economize" on scarce resources, which governments are wasting. So go right ahead. Read Rothbard. Again and again.