Some commentators believe that the best way for Greece — and by extension, everyone with a debt problem — to deal with debt is introducing some mild-to-moderate inflationary pressure (or least, the expectation of such a thing).
The problem is, the evidence (thanks to regular reader Andrei Canciu) suggests this isn’t in the least bit effective:
The real solution for the terminally indebted is not to get into debt in the first place. Once you are there, the pressure of creditors means that the chosen path will generally be a succession of unsuccessful Keynesian can-kicks (or, in Europe, crushing austerity) up to a slow, painful default.
As Keynes put it:
The boom, not the slump, is the right time for austerity at the Treasury.
