The Other Way Actually Isn't

This column is mostly fine, but this just isn't [quite] correct.

Nobody has to pick up any of the bill. The ECB can print free money and give to whoever they want, including the banksters. Now I get that there might be existing legal and political barriers to doing such things, but conceptually it is completely sound. Everybody gets a do-over! Huzzah!

Atrios is referring to another column saying that Germany would have to pay most of the bill to rescue its neighbors.  He's right that nobody has to "pay the bill" but the effect of the ECB printing money would not be nothing.  One of the ways that this would function to keep everything balanced is to push German inflation higher so that lower, but still positive, inflation in the periphery would allow the balance of accounts necessary to right the ship (more or less per Paul Krugman's frequent discussion of this).

Again, German inflation would be a good thing for the zone as a whole, and as Germany has benefited quite a lot from the Euro thing, it is fitting, but it isn't cost free, and German citizens probably wouldn't look kindly on it.  They would be paying, not through tax dollars but through a shrinking of their spending power over time that was faster than that in the periphery.

I want to clarify: I think that the inflation targets are far too low (historically it seems 4% may be a better number...lower is fine iff overall economic growth and unemployment are in good places), but inflation is a real cost, and not only to those with accrued wealth.  Higher inflation will hurt people who have little to no upward wage mobility (e.g. fixed incomes, and people in the US on minimum wage).