Newly reelected Greek Prime Minister Alex Tsipras expects that by early 2017 Greece will be able to access bond markets, from which it has been virtually cut off since it lost investor confidence in 2010. If it is unable to meet this timeline, it will be forced to rely on further bailouts or go bankrupt.
In the new Learn Liberty video below, George Mason University professor Garrett Jones argues that the bankruptcy option may be the best route for Greece to take. Going bankrupt, he argues, is not some horrible crime. Sometimes you make promises that you just can’t keep.
Jones explains that Greece should discharge its obligations so that it can start fresh with supply-side reforms like a simple tax system and strict rules against corruption that the global investor class love. In other words, rather than continuing to kick the can down the road, Greece should crush the can and crack a new one!