Pardoning public debt? No thank you!

The first thing people have to bear in mind is that a pardon has a cost - and in this case a huge one. Pardoning part of a country's debt will mean that the international sovereign debt markets will be closed to that country, with dire consequences:

- in Portugal, part of the current expenses of the State are being funded directly by debt. Cutting this would mean wages not being paid. It is as simple as so;

- the State would need to live out of its own revenues - as it should. But as it isn't. Doing that all of a sudden, in a hard stop, without any contribution from economic growth would mean the need to impose strong and tough measures - even tougher than the ones already in place (and that I think are already extremely hard and limiting);

- debt exists to fund investment. No debt would mean no investment - because it would need to be funded solely by the State revenues, and those would not be enough. Just ask Argentina how it is - though some people are painting a rosy picture of it nowadays, the curtail of investment is limiting its economic growth.

So, stay away of public debt pardons. We will need to fend it by ourselves, honoring our commitments.