The ratings service said the plan does improve Greece’s financial prospects for the next few years and probably will stop the problems in that country from undermining confidence in weaker nations such as Ireland and Portugal — diminishing the risk that Europe’s financial troubles will spiral into a broader crisis.Why anyone had faith in Greece to begin with is beyond me. They have been in default on loans something like 50% of the time over the last 2 centuries. Why do you think they would get it right now?
But the fact that Greece is likely to default on one or more of its outstanding bonds sets a “negative precedent” that will diminish faith in other nations.
And faith in other nations? Like faith that Democrats and Republicans can actually do something that makes sense? Right. They haven't done anything in 40 years but spend more money and create more "unfunded liabilities," but you have faith that they will fix it between now and the next election. If you have that faith, then there is probably a bridge that you can buy somewhere.