Has Draghi won the financial battle of Europe?

Ever since the European Central Bank started buying Italian and Spanish bonds, the yield on these bonds started falling. That means that the respective governments need to pay less to service their debts. This has averted an immediate crisis of the debtor countries becoming unable to service their debts.

Does this solve the European economic problem? NO! In fact, the financial problem remains as the income from the bonds is no longer going to private investors, but to the ECB. To be sure, Socialists think this is a great thing, because they see lots of ways to redistribute the money. However, when money is redistributed without getting work done for it, the wealth of a nation is reduced.

There is another problem that has been created; the bloating of the balance sheet of the ECB. There is a new round of money printing going on in the world and some in finance are beginning to worry as to how the banks will reduce assets. If money printing (and subsequent bond buying) would be the way to grow the economy, leaders would not fret about the economy, they would just order their central banks to print more money. The problem is that as the money expands prices go up. If prices are fixed, goods disappear and show up in the black market where prices become exorbitant.

In the end, the economy does best in an environment of low taxes and sound money. Corruption is just another tax. In the US, regulatory costs act as corruption does in other countries. It is a break on the economy/