One way out

An economist is too pessimistic:

There is no solution to the current debt crisis plaguing the euro zone, and it’s an illusion to think that one lies on the horizon, an economist told CNBC Monday.

"There is no way out, I never thought there was, not for any of the countries that are in trouble. Once one of these countries goes into this sort of problem, there is no escape," Roger Nightingale, economist at RDN Associates, said.

He dismissed the current, positive sentiment among investors regarding Italy as temporary and fleeting.

Of course the current, positive sentiment among investors regarding Italy as temporary and fleeting - it's exactly the kind of extend and pretend that has been going on in the Euro Zone since the financial crisis started. How many times has the Greek problem been "solved"? I can count at least three, and now the bankers are replacing governments to try to solve it. The math is still bad. But that does not mean there is no way out.

What economists and politicians and bankers mean by a "way out" is a way out of our current situation without pain, without cutting budgets, without suffering the natural consequences of our prior actions, and without hurting bank profits. In that case of course there's no way out, any more than there is no way out of the multiplication tables* if you wish to make 3 x 2 equal to 27. You simply have to work with reality.

But there is always a way out for Greece and any other country, including the US, that finds itself in a debt sink:
1) balance the budget.
2) default on any debt that cannot be paid for within that budget.
3) break any promise of future spending that cannot be paid for within that budget.

Simple? Yes. Easy? Of course not, or it would be done already. In fact, all of the bailouts and the programs and proposals have been designed specifically to avoid those three steps. We will have to take the one way out eventually** - the only question is how much harder the politicians will make that one way on the average person. 

* Maths are stubbornly unaffected by political desires.
** "You don't have to go home, folks, but you can't stay here."