Friday, 11 November 2011

Has Hannan lost the plot?

Daniel Hannan is generally sound, but he seems to be periodically afflicted by conventional wisdom. His latest article for the Daily Mail is a case in point.

I replied on his Telegraph Blogs site as follows:
"A default by Rome, on the other hand, would blow the European economy to smithereens."

Would it?

Certainly, those who were foolish enough to lend to the Italian government would lose out, but I don't see why the wider economy should suffer.

"Since no one would then lend it money,
it would have to print lots of lira very quickly to pay the salaries of
its soldiers, policemen and other vital public servants."

Has someone got to you, Daniel? Do you really believe that there is no fat left to be trimmed in the Italian public sector? Surely they could balance the budget without impacting any genuinely vital services.
Italy should embrace default. So should we all.

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