The Greek Solution

Greece sold 5 billion euros of 10-year bonds today.  This is a far cry from the 48 billion euros they need but its a very good development because it now introduces a form of marketplace discipline so the Greeks can no longer borrow and spend with impunity.  It also sends a positive signal that will reassure the market for sovereign debt in Europe and make future bond sales more likely.  The sale, apparently, was precipitated by the Germans signalling they are backing out of a bailout.  They finally get it.  Moral hazard is baked into bailouts.  If only the U.S. government understands this.