The Debt Spiral

  • March 14, 2010 · 4:00 PM
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Government debt appears to spiraling out of control in the U.S., parts of Europe, and Japan. What are the sources of this crisis, and how can it be resolved? Is the U.S. debt a threat to our national security? Is the crisis in Europe a problem for Europe alone or does it threaten the world economy? Why are wealthy economies so prone to get into trouble?

When a government cannot meet its obligations it has various courses open to it:


  • Raise taxes...
  • ...or cut taxes to stimulate growth.
  • Cut spending...
  • ...or raise spending in strategic areas such as infrastructure, R&D, and retraining.
  • Try to borrow more to pay off the existing debt.
  • Debase the currency (inflation).
  • Default on the debt.
  • If it is a smaller nation, seek a bailout.

What courses would we like to see our government and other governments follow?

If you know of relevant articles, books, etc., please post a comment.

I have posted links to various news articles and government reports here:
http://tinyurl.com/yl...

As always...

All views and political orientations are welcome.

We welcome beginners and policy wonks alike. Feel free to join the discussion or just to listen and learn. If you sign up and change your mind, please change your reply so that someone else may attend.

Meetup to last 1.5 hours (until 5:30 PM) although, of course, people are welcome to continue beyond that point.

Looking forward to another stimulating discussion!

John

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  • John Van P.

    Very stimulating, wide-ranging discussion.

    March 16, 2010

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Rafaël

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