Debts and Greek tragedy

When a creditor can't pay the debtor, who is responsible? The creditor of course. But when credit comes on top of credit and keeps growing and the debtors know this, who is responsible? And when debtors know the risk and so ask for higher interest, and so the debts grow extra fast, who is responsible? Of course still the creditors. But now the debtors become responsible too. If it is selling mortgages to poor people, or big banks lending to countries. The moment interest rates get higher because of risk, debtors should know what they are doing.

And governments cannot and should not economize to the extent their tax base shrinks.

In a real debt crisis, debtors should suffer. They don't like that, so they try to shift the burden. They should not be allowed to do so. Shifting the burden is one of the classic systemic sins, like the tragedy of the commons. Any division of sharing the burden is arbitrary, but the creditor is always more responsible than the debtor, criminal debtors excepted. So my suggested arbitration is that debtors take 1/3 of the burden and creditors 2/3. So 1/3 of the Greek debt should be discounted. And interest rates should be average, without risk premium.

Or debts should simply be traded. Speculators like risky and muddy waters. They can't earn on simple discounts. So they are against simple rules.

And if banks come into trouble? They don't. They went into trouble. To big to fail? To big to learn. Don't tell me this is not feasible. When nothing is feasible, everything becomes feasible.