Greek Drama: To Grexit, Or Not To? That Is NOT The Question!

Greek Drama: To Grexit, Or Not To? That Is NOT The Question! by Research Affiliates

The old saying, “You can’t squeeze blood from a stone,” vividly describes the futility of trying to extract more resources from something than it has to give. The expectations the Greeks have for renegotiating their debts requires them to do exactly this, squeeze blood from a stone. Only by increasing tax collections can Greece reverse the painful reduction in government spending, services, and employment known as austerity.

Today’s Greek crisis is no longer about its involvement in the euro. Nor is it about the disconnect between unified monetary policy and disparate fiscal policies—as important as that inconsistency is. The present standoff is a powerful...