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public defaults do not lead to liquidation sprees that destroy extant capital equipment.

That would be true for GM. But is it really applicable to the problem in Spain, where the mis-allocation resulted in a vast supply of overpriced real estate. It would seem that, in that case, private sector defaults would be an efficient way to reprice the assets at the cost of those who could most afford to pay. But we can't have the wealthy paying, can we?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 17th, 2012 at 02:28:27 PM EST
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