Why are/will PIIGS (Portugual, Ireland, Iceland, Greece, and Spain) / Countries Get Bailed Out
The following is my hypothesis on the cycle:
- System design flaws (eg. rules to keep a balanced budget are not sufficiently enforced)
- Misinformed voters
- Unqualified Candidates
- Fiscal Irresponsibility
- Debt crisis
- Bailout, default, or debt restructuring
- Currency Crisis
- Inevitable Outcome: System reforms
The key is to do system reforms as soon as possible so the issues don’t escalate. Decisions need to be made fool-proof with more checks and balances. It’s an iterative process to get capitalism to function appropriately. We don’t need to make the same mistake multiple times.
Work-in-progress Proposed solutions:
- Make it a criminal offense to not run a balanced budget unless there is a direct, and immediate threat to national sovereignty.
- Reforms currencies and back currencies by widely traded, liquid securities with fundametals (eg. commodity futures)
- Educate the public better so they can make decisions based on understand how capitalism works
- Cut out advertising completely in the voting process and create one website that hosts all candidates policies to eliminate waste, unfair advantages from better funded candidates, and allow an equal platform for sharing critical data in a more objective manner