Riots are now turning violent in Greece and Spain. Police surrounding the parliament building in Madrid last night were seen on videos beating demonstrators. The Merkel-Sarcozy-Hollande-Geithner-Bernanke-Draghi policy is bearing fruit. Civil society is breaking down in Greece and Spain. The NY Times has a lengthy, front-page story yesterday about formerly middle class Spaniards foraging for food from garbage trucks. That this is becoming a common scene in Spain was the thrust of the article.
This will only get worse. Unemployment and starvation is the ultimate outcome of the modern welfare state and it is now on display in the Eurozone with more yet to come. Spain is still dithering about whether to alter 'early retirements' under their social security schemes. This would be funny, if it weren't tragic. Who is going to fund those who are already retired? One might ask a similar question in Greece. Are American and German taxpayers going to provide the money? Obama suggests that this is a lively possibility. Long run, even the US and Germany do not have the resources to bail out these countries. The US and Germany suffer from the same disease that has lead to the current turmoil in Spain and Greece. They are just at a different place on the timeline. The ultimate destination is the same.
You can't solve debt problems by increasing the amount of the debt. That obvious truism is responsible for the current debacle, which will only get worse.