For almost six years
But European lenders have also stubbornly kept to the old-fashioned principle that debtors freely borrowed their money from lenders, and therefore most borrowed money must be paid back, regardless of the current financial status of the debtors.
Economists still bicker over what caused the crisis. Was it Greek structural inefficiencies coupled with appetites for expensive foreign imports that Greeks could not afford? In the last decade, high-priced Mercedes cars became as common in
Was the Greek tragedy more due to endemic corruption, rampant tax evasion and cronyism? Longtime residents of
Or maybe the borrow-and-spend spree could have continued were it not for the 2008 financial meltdown on
Politicians likewise fight over the best ways to solve the crisis.
Write off the Greek debt but make
Behind all the acrimony is an unspoken Greek assumption that has nothing to do with either economics or politics, but reflects a growing trend around the world.
The thinking goes something like this. The rich Northern Europeans have more money per capita than do the Greeks. They could write off the entire Greek debt and not really miss what they lost. In the Greek redistributionist mindset, why should one group of affluent Europeans grow even wealthier off poorer Europeans?
Default, then, is sometimes morally justified. The Greeks fault their most prominent creditor,
Something similar to the Greek mindset arose during the U.S. housing bubble and collapse of 2008.
Millions of Americans unwisely took out subprime mortgages for houses they could not afford and then walked away from their debt when the economy tanked. They understandably blamed
The current student debt fiasco is also similar. Young people who have little money owe lots of it --
It no longer matters how the debt was incurred, only that poor students and ex-students are unlikely to pay most of it back.
Everybody but students is supposedly to blame. The universities constantly upped tuition costs while pushing loan packages on students. The weak economy offered few good jobs to the recently graduated and indebted. The government foolishly guaranteed the loans and thus greenlighted greedy campuses and banks to charge whatever they pleased.
Students are as likely to pay back their
The Obama administration is sympathetic to the mindset of debtors. Its sloganeering suggests that wealth creation is either not really the work of the individual ("you didn't build that") or something that reflects greed rather than thrift ("I do think at a certain point you've made enough money").
Payback depends not on who legally agreed to what with whom--but on who has money and who doesn't.
In short, debt has been redefined as equality and fairness.