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The prudent will have to pay for the profligate

By Martin Wolf

Published: April 1 2008 19:25 | Last updated: April 1 2008 19:25

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You have enjoyed a debt-financed spending spree. But times are now harder: you find it impossible to roll over your debt; you have to pay much higher interest rates than before; or you find that the value of the assets you pledged as collateral is now less than your loan. What can you do? Provided enough of you are in trouble, you call for help from the fairy government-mother.

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