Robert Reich's Keek op de Greek:
Five things you need to know about the Greek debt crisis as of now:
1. The Greek people voted correctly yesterday in rejecting more tax increases and spending cuts. They've already been punished too much by their creditors -- mostly big banks, as represented by the IMF, European Central Bank, and European Commission.
2. Austerity was the wrong medicine to begin with. It put Greece into a death spiral of economic woe that worsened its debt crisis.
3. Now it's up to the rest of Europe to respond. It's in its interest to offer Greece easier bailout terms, and then help Greece get to work on what Greece has already agreed to do -- reform its tax system so that wealthy Greeks can't escape taxation, and reform its budget process to avoid political payoffs.
4. But if Europe doesn't respond, the best of the worst cases to follow would be for Greece to withdraw from the euro. That will happen automatically if Greek banks issue IOUs instead of euros (cash is already being rationed), and those IOUs become, in effect, a different currency.
5. There could be "contagion" to Spain, Portugal, Ireland, and Italy if creditors fear future defaults and the incapacity of the eurozone to govern itself economically. That would hurt the United States, especially Wall Street, whose exposure to European banks is still considerable.