As Katy stated it would actually be like rewarding people/nations for making bad decisions. Clearing all debts would also be like stealing from the people that have been prudent. We are actually doing this anyway by inflating our way out of these problems. Debt held in a country who controls their own monetary policies never actually have to be that afraid since they can just print themselves out of the mess. The problem is if they agree on loans in foreign currencies etc. Angie most of this debt could be removed by the snap of the fingers by the central banksters. Japans debt is basicly only held by it own population so they could by inflationairy meassures clear all debts in a micro second.
I’m all for clearing certain debts for example many nations in Africa where some crazy dictator have taken the whole population as hostages. The lenders should never allowed this to happen and should morally/economically be punished for it. This can’t be said for most of the debts in the western world saddly. We can hate banksters all we want and many of them should be prosecuted but lots of the blame lies in ourselves.
What people have noticed with the euro is that this same procedure can’t be done “because lots of countries share the same policies” which makes people question the euro because of that. Because of that sharing is why some countries could get lower interests on their loans though they didn’t deserve it and they just kept on spending. This is actually a great thing since it prohibits stealing from the ordinairy people in a greater extent.
Historically the only way that national debts have skyrocketted is by wars. We have actually manage to do it by just wasting money on other things this time. Just look at the graphs and you will see that most of them top out after wars.
Clearing debts or printing your way out of it has the same results as far as the debts influence on it’s populace. Since I’m in love with austrian economics I consider them both to be bad. We need sound money and with that we would automatically get our nations to become more responsible.
Sadly enough democracy is what have empowered this whole process because politicians so easily can bribe their way into power by handing out freebies.