Here’s a book I’ve been meaning to plug: We Are Doomed by John Derbyshire. Surprisingly funny for such high-proof gloom.
“Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop.”
Mr. Derbyshire then adds his own WAD accent to the matter:
- it’s much harder to organize a bailout
- even harder when default nations and bailout nations share a single currency
- harder still when the nations do not have a single government to manage their affairs (and a democracy deficit in what continent-wide ”government’ there is)
- and, finally, you have “Rosie the Riveter yoked in harness with Lindsay Lohan” – half the nations in the zone have a stern ethic of working, saving, and following rules, while the other half prefer partying and avoiding taxes.
He then draws some parallels between Greece, the US, and government portrayed in film by Madonna:
Sixty years ago there was a man in Argentina named Juan Perón, who made himself terrifically popular by promising everything to everyone: low taxes for businessmen, high wages for workers, political plums for the military, price supports for farmers, government jobs for intellectuals, state-subsidized health care for everyone … the whole nine yards. It worked! — for about five years. Then the bills came due, and Argentina’s been bumping along the bottom ever since, the economic wreckage occasionally stirred by a coup or revolution.
The West has done exactly the same thing in slow motion. Our bumping along the bottom phase is about to begin. Let’s hope it doesn’t last too much longer than Argentina’s — 55 years and counting.