Tuesday, July 14, 2015

Policy of Austerity Remind Us Lesson from Great Depression and Treaty of Versailles Forgotten

The Greeks, faced with a Wednesday deadline to enact additional austerity that includes the sale of government assets upon default, are no doubt questioning Tsipras' leadership abilities. A true 'No winners and losers compromise' cannot include asset seizures. Asset seizures will stoke the fire of hostility and separation rather the cooperation necessary to maintain the euro zone and peace.

Germany, recipient of harsh terms defined by over 400 Articles within Treaty of Versailles that ushered in a period of great social, political, and economic upheaval, should emphasize and respect the unintended consequences of policies better than most. Austerity (balanced budgets), as detailed by Hoover's memoirs, only worsens the economic collapse. This path is plagued by finger pointing and social chaos.


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