Will this crisis ever be over?! The nations of the eurozone seem to be fighting endless battles to address fears about government finances. The worry is that unsustainable national debt loads will result in default, a financial panic, or a costly repair effort that puts a squeeze on the economy in Europe and beyond. Here's a backgrounder on the problem, its consequences, and possible ways forward.
Before the financial meltdown of 2008, a handful of prophets raised warnings. Most people didn't listen. Why? Because most people have a hard time seeing outside the bubble of the present moment.
After attending a European Central Bank workshop on global liquidity, the author learned that European monetary economists sound surprisingly like Austrian economists.
It's hard to conclude anything else: Debt – owed by households, governments, and banks – lies at the heart of the economy's troubles. Even after two years of recovery, debt remains a big drag.
A Greek (or Irish or Spanish or Italian or Portuguese) default would have roughly the same effect on our financial system as the implosion of Lehman Brothers in 2008