But this lesson still awaits learning by the G-8 summiteers, who insist that destroying their economies further is the only way to go.

And our President joins in with his own form of stupidity: “All of us are absolutely committed to making sure that both growth and stability, and fiscal consolidation, are part of an overall package in order to achieve the kind of prosperity for our citizens we all are looking for.”

What’s needed right now is big-time stimulus, much higher inflation, and a commitment by world leaders to continue this approach until the disastrous levels of unemployment are brought down.

Gorilla says: “Deficits and debt don’t matter at all, and will matter even less when more people have jobs!”

Meanwhile, the Fed continues to do absolutely nothing. Having no credibility whatever on unemployment is apparently less important than having credibility on non-existent inflation.

What’s needed is what’s never offered: a very large scale stimulus (at least $2 trillion) that focuses solely on hiring the unemployed.

Gorilla says: “Long past time to turn the Fed district hqs into job centers!”

In Spain, recession plus 25% unemployment plus busted banks plus 7% borrowing costs (very soon) equals total disaster.

In Frankfurt and Berlin, the neighbors have achieved beggar status.

And there’s absolutely no sign that anyone in power understands that Euroland is more or less finished, absent the end of cretinous, amoral policymaking.

Gorilla says: “Please, let’s be beastly to the Germans!”

At this point, leaving the Euro is Greece’s only viable solution, given that the country’s German paymasters would rather see the country destroyed than have to admit lying continually to their own voters.

Unfortunately for Greece, leaving will make things much more difficult in the short-term. A drachma devaluation of roughly 50% is needed to make the economy more competitive. The banking system will be destroyed, with no prospect of financing from anywhere for at least a decade. Unemployment and social upheaval will increase. Civil war is not out of the question.

Once Greek leaves, it’s very likely that Portugal, Spain, and Ireland will follow quickly. Bond yields in those countries are unsustainable, as is the utterly stupid pursuit of austerity at a time of vast unemployment. It’s not out of the question that Italy and France will also be forced to leave Euroland.

How to put out the fire? The ECB must become the lender of last resort for all sovereign debt, the Northern Europeans need to engage in big-time stimulus to promote consumption, and a higher inflation rate must be maintained to bring make competition more competitive within Euroland.

Gorilla says: “It’s back to 1939: Germany torching a whole continent in pursuit of a morally bankrupt, confident dream!”

At this point, there are essentially three choices:

The Germans must send a clear signal that the ECB will become the lender of last resort, that more stimulus will be undertaken in Northern Euroland, and that a higher inflation rate of 5%/year will be tolerated until competitive balances within Euroland are restored.

Alternatively, the Germans could decide that they and their richer counterparts will depart the Euro, which would allow for the necessary currency devaluation to correct the competitive balance, but will not change the need to shore up what is becoming a non-functioning financial system.

The final possibility is allowing Greece to leave the Euro, but it’s very likely that this will force, Ireland, Portugal, Spain, Italy, and possibly France to also consider leaving. The danger of this contagion is that it will prompt massive capital flight to Northern Europe and make the austerity undertaken so far seem very benign as the banking systems in those countries collapse and a continent-wide depression ensues.

What’s absolutely essential at this point is for the Germans to understand that they have no more than a month to make up their minds.

The Greeks are screwed regardless, they simply don’t have the resources or the capability to keep going without at least a 50% change in the competitive balance.

Anyone in Berlin who thinks that austerity remains a viable solution is living in the fantasy world created by Angela Merkel and the Bundesbank.

Gorilla says: “For the third time in a century, the Germans must crawl out of the devastation they’ve created!”

In Spain, there’s far more interest in deficit reduction and recapitalizing banks, the former of which will only increase unemployment and deficits while the latter will only work if the ECB at last decides to be the lender of last resort.

In Greece, the banks are essentially finished, there’s no government, and a marked rise in political extremism.

In Germany, of course, the lying by Angela Merkel et. al. goes on.

Gorilla says: “Talk about continental drift! Not since Hitler has Europe been plagued by so many worthless and amoral leaders!”

Of course same sex marriage is a winner in all demographic groups not populated by the elderly, homophobic morons and Catholic bishops (and in fact these three are one and the same, a veritable trinity).

Our President is very adept at figuring out what makes political sense; indeed he’s probably the greatest politician of Gorilla’s lifetime.

But as a leader, he still seems to be more about political calculus than about doing the right thing.

Gorilla says: “Better late than never, but leaders get their early!”