Government debt: We’re all in the same (leaky) boat
Religion & Liberty Online

Government debt: We’re all in the same (leaky) boat

Edmund Conway, economics editor of The Telegraph, looks at a new analysis of government debt by Dylan Grice of Societe Generale. The charts are eye popping. It’s not just a Greek, or EU problem. It’s also something that Americans must come to grips with, and soon. You might call it a moral issue — too long living beyond our means.

Conway quotes Grice, and then sums up:

“The most chilling similarity between the Greeks and everyone else isn’t in the charts above showing that their various debt metrics are in the same ballpark, it’s in the realisation that we too are subject to the same iron-clad laws of budget sustainability and that we too are as helplessly vulnerable to any reassessment of sovereign risk by the famously fickle Mr Market.”

In the end, all Western nations face a long-term dilemma (which has been the case since before the crisis, but is more front-and-centre of everyone’s minds now). Over the past 50 years we have committed ourselves to massive welfare states which our economies are simply not generating enough cash to finance.

Read “Greek lesson: we are all in the same boat” on the Telegraph site.

John Couretas

is a writer and editor based in Grand Rapids, Michigan.