The economic crisis explained

[sawyl]

Today's Guardian features a nice, limpid piece by Aida Edemariam on the origins of the current economic crisis which contains a nice set of objections to pater's rather dubious solution:

The obvious question, to my mind at least, is, if it was all imaginary in the first place, why can't we just write it all off and start again? Why can't we consign it all to an imaginary dustbin, instead of throwing yet more money into a hole we don't know the depth of? Because, as the Treasury spokesman would say with a slight sigh, to do so would instantly decimate the complex web of salaries, house-buying, businesses (most of which can't function without the flexibility provided by bank credit) and general day-to-day consumption otherwise known as a western economy.

"We are a capital-intensive society," says Kirchmaier. "This makes us more productive, and wealthier. Ending a capital-intensive society would mean sending us back to the stone age. We have seen instances in history where states tried to renegotiate their debt and start all over again. Germany after the first world war was such a case, or Zimbabwe now. None, I would say, counts as a success story."

Quite.