Martin Wolf Buries the Lede
From his column in today’s FT:
Even this is too simple, once one allows for banking: Ireland’s net debt was a mere 12% of GDP in 2007
In other words, in FT World, privatizing the profit and socializing the risk is A Great Idea that deserves the full support of the government.
Were I an MP in Ireland (Portugal, Spain, Greece…..) I would tell the ECB to buy all that bad paper, like the US Fed has done, with freshly coined Euros.
A much better idea than any that has been tried so far.
I briefly considered whether a euro member could do what Schacht did and have a shadow economy with selling “mefo bills”. But it does not seem useful givien they have to be redeemed in euros outside the internal trading.
“In other words, in FT World, privatizing the profit and socializing the risk is A Great Idea that deserves the full support of the government”
No.
No, that’s you with you knickers in a twist, attributing views to the FT (Wolf, actually) that are not supported by the quoted text. Another entirely reasonable reading is that the Irish government has already assumed the debt of large failed banks, and for the purposes of understanding what is going on in Ireland, it might be useful to have in mind what the ex-bank governmen debt looks like.
You misread what he said.
“allows for” = if you take Ireland into account
He meant that Ireland is in dire straits despite that they had very low debt to GDP level.