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Economics professor and professional pessimist Nouriel Roubini (above) believes Greece must default on its debts and exit the eurozone...to rebuild its economy.
Roubini wrote in the FT: “Of course, this process will be traumatic. The most significant problem would be capital losses for core Euro zone financial institutions. Overnight, the foreign Euro liabilities of Greece’s government, banks and companies would surge. Yet these problems can be overcome. Argentina did so in 2001, when it “pesified” its dollar debts. America actually did something similar too, in 1933 when it depreciated the dollar by 69% and repealed the gold clause”.
“Like a broken marriage that requires a break-up, it is better to have rules that make separation less costly to both sides. Breaking up and divorcing is painful and costly, even when such rules exist. Make no mistake: an orderly Euro exit will be hard. But watching the slow disorderly implosion of the Greek economy and society will be much worse”.
AND...RELATED: Nobel economist/NYTIMES columnist Paul Krugman likens today's widespread drumbeat for austerity...to doctors who once believed that bloodletting would purge evil 'humors' that caused disease...but really only made patients weaker.
