You seem to retreat into the ultimate unknowability of the future and your inability to do anything about the human condition whenever I try to game out how we might achieve better outcomes.

The problem is that right now the future is not merely unknowable in some abstract philosophical sense, it is also impossible to forecast. Forecasting relies on extrapolating the interests, circumstances and institutional tools of people and social groups into the future. But in this case, a lot of people are acting contrary to their medium-term interest, because their circumstances are going to change in ways they appear to not currently realize, and the institutional structure within which they act is fundamentally unsustainable in the medium term.

Which means that the outcome depends on (a) how rapidly people realize the conflict between their short-term interests and their medium-term interests, (b) how rapidly people can adjust their actions and tools in light of this realization and (c) whether the unsustainable current institutions prove weaker or stronger than the sustainable current institutions.

All of these are unknowable to outside observers - and perhaps even to inside actors - because they depend on unobservable subjective conditions.

As an example of this problem, we may observe that a war is not in Germany's or the Netherlands' interest. However, we may also observe that until this moment the austerity neurosis has not once been successfully cured, save by the circumstance of finding oneself on the receiving end for an extended period of time. And during that time, the logical propaganda ploy to pacify the German or Dutch public, given the internal logic of current narratives, is a dolchstosslegende about how the feckless Southerners skipped town before paying their tab, and how "we" must now tighten our belts to make up for it.

By the time the currently pro-austerity forces pull back from that brinkmanship, they may well find that they are already over the brink. Or they may not. It all depends on the subjective conditions in decisionmakers whose state and flexibility of mind I do not know. But so far, facts on the ground are not encouraging of the view that they are sane nor particularly farsighted or intelligent.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.