Winning the Race to the Bottom

In the Administration’s view, there’s a good reason to get behind the bailout of Greece — one they can’t talk about.

The uncertainty — thus, weakness — of the euro is the only thing standing in the way of the complete devaluation of the dollar. Devaluation effectively gets us out from under about a big chunk of the $4.5 trillion of our debt held by foreigners. You can’t have a weak dollar with a weak euro — so let’s spend some more money we don’t have (but won’t really have to pay back!) to shore up the euro. The Chinese know exactly what we’re up to, and as holders of about a quarter of those four-and-a-half trillions, they ain’t happy. The Europeans know, but what can they do — trash the Eurozone to spite us?

It’s a cold, calculated and utterly cynical reason — but a “good” one.