What the Shrill One Said
Paul Krugman offers a data point that shows that default and devaluation works better than austerity and debt peonage.
The spread on an Icelandic CDS is now about a third that of the Irish CDS, which means that their borrowing costs are lower, as is the confidence of the market in their credit.
Rolling the Nobel Laureate:
Why, it’s almost as if defaulting on debts run up by runaway bankers and letting your currency depreciate works better — even from the point of view of investors — than socializing private-sector losses and grimly sticking with a fixed exchange rate.Or to put this in earthier terms, if you want to survive this sort of financial meltdown, f%$# the banks, not the average citizen.
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