[kujovtoq] International corruption in Greece

There is a sinister aspect to the debt crisis in Greece.

The Greek democracy has two choices regarding its debt:  1. Acquire funds to pay it (by taxes, spending cuts, or bailout), or 2. Default on its debt.

If option #2 is taken, there are two losers:  2A. The Greek government (and people) might have difficulty in the future selling government bonds.  2B. The current bondholders will lose their investment.

In theory, a democracy can make the right decision about 2A, weighing the desirability of money now versus money in the future.  Furthermore, before any future sale of bonds, they could take special measures to make the future debt more attractive, perhaps structural reform of the economy.  Past poor performance does not necessarily imply poor future returns, and it'll be up to the market to judge it then.

The sinister aspect is 2B.  Current bond holders would prefer option 1 be taken, but as mostly international investors, they do not have a vote in the Greek democracy.  (Though I've proposed bond holders get a de jure vote in the legislature.)  So, the only way the bond holders can affect Greece's decision is by indirect means, namely corruption, to influence the government to make a decision that may not be optimal for the people.

Consider the crisis to have a silver lining.  Examine how the corruption is happening, probably clearer in this situation than normally.

If option #1 is taken, there is likely further corruption, domestically.  Who gets taxed?  Whose spending gets cut?  Here in America, the rich have excessive political power.