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Family debts

US

Someone recently emailed me this quite compelling explanation for why Standard & Poors downgraded US sovereign debt:

• U.S. Tax revenue:  $2,170,000,000,000
• Fed budget:           $3,820,000,000,000
• New debt:             $1,650,000,000,000
• National debt:      $14,271,000,000,000
• Recent budget cut:      $38,500,000,000

Let's remove 8 zeros and pretend it's a household budget:

• Annual family income:                              $21,700
• Money the family spent:                           $38,200
• New debt on the credit card:                   $16,500
• Outstanding balance on the credit card:  $142,710
• Total budget cuts:                                         $385

Hey is someone reading my mail.

EURO

What we need now is for someone to do a similar thing with the Euro family debt. I'd like to see what Daddy Deutschland's debt position is if it stumps up for the debts of all its Euro children: Greece, Portugal and Ireland and its profligate Euro in-laws: Spain, Italy and Belgium.

All these Euro family members have been borrowing on Daddy Deutschland's credit for decades and now the lenders want to be repaid.

Appropriately La Femme France seems to date to have been immune from such tawdry scrutiny. Uncle Ned is of course beyond reproach.

Some dumb questions:

  • Can someone explain to me why the market has all of a sudden become confident that the Euro experiment is not inevitably going to unravel over course of the next decade?
  • Surely some paltry public palliatives for Papendreou uttered by Angela Merkel are not seen as constituting something substantive to turn this slow motion train smash around?
  • Isn't that Wile E Coyote market just going to tank again tomorrow when it belatedly realises that it has just been duped by the Road Runner one more time, with the same old Euro political posturing?
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