Former Texas Republican Congressman and three-time Republican presidential nominee Ron Paul says that bankruptcy is likely to be a better solution for Greece. (Source: Greeks Vote No: Keynesian Crisis Continues, July 9, 2015.)
After Greeks voted “No” on Sunday’s referendum, Greece and its creditors have returned to the negotiation table. After two days of a sharp drop, financial markets started to recover slowly.
Paul welcomed the “No” outcome of Greece’s referendum but said that nothing has really changed. He said a “No” vote forced Greece’s creditors to be a little bit more generous towards Greeks.
If Greece and its creditors fail to reach a deal in the next few days, Greece is likely to be ejected from the eurozone. Therefore, the country has to adopt a new currency and restructure its financial system.
As Paul stated, “Once Greece exits the EU and dismisses the euro, the same mindset will rummage around Athens and the government will, unfortunately, resort back to Keynesian economic policies: high taxation, more debt, and greater government intervention.”
While everybody remains uncertain as to how Greece can survive from this severe financial crisis, Paul suggests that Greece should start from scratch. The quickest way is to liquidate the debt and declare bankruptcy. He thinks that Greece should introduce a sound currency without depending on European currency. Moreover, it should back it up with some metals.
In respect to economic growth, Paul believes the Greek government should create a government for the creation of wealth; have market economy, low taxes, and a real rate of interest. This way, people would save money with less government regulations.
In his latest video discussing and explaining the financial crisis, he concluded by saying that the very low interest rate has made the world economy extremely vulnerable.