Thursday, April 19, 2012

Ezra Klein explains why America isn't Europe

There's this ocean, for one thing ... No, but seriously: as is his wont, Klein explains concisely and clearly the key distinction that makes "deficits will turn America into Europe!" mere blather:
Investors had previously thought that the European Central Bank and the richer countries in the euro zone would, if push came to shove, cover the debts of the poorer countries. They thought the euro zone was a sure thing.

They thought wrong, and have now come to see the underlying structure — a currency union without a fiscal union, a committed central bank or economic parity among the members — as inherently flawed and perhaps unsalvageable. The euro zone doesn’t have a debt problem. It has a continued survival problem.

America’s got a debt problem. But we’ve been around for hundreds of years. Our political system, for all its inanities and disappointments, is fairly well understood, and quite widely trusted. The euro zone has only been around since 1999, and Greece didn’t join until 2001. There’s nothing obvious that could force a rethinking of America as a continuing, surviving enterprise in the way that we’ve seen in Europe.
Well, nothing except the Tea Party, and I think America will outlive them too.


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