... Those who run up debt in good times can borrow only so much more when a recession strikes. And heavily indebted governments postpone fiscal stabilization at their peril. If you wait to reform until the bond market calls time, you are—to use a technical term from economics—screwed. _NiallFerguson
If you are US President Obama, you are ready to blame almost anyone else for the economic despair settling over the American population. As a community organiser, President Obama's instinct is to call out the shock troops, take to the streets, and pin the blame on big banks and capitalism. In fact, billions of US$ were recently diverted from Obama's stimulus moneys to community organising groups, for just that contingency -- among others.
In three short years, Obama has added over $3 trillion to the US national debt. And rather than curtailing the deficit as the president had promised, it is getting much worse. Debt is a killer, but it is easy for the politicians who are responsible for the debt to point to everyone but themselves.
Riots in Europe are occurring as European governments look into the abyss of massive debt and cautiously tinker with a few timid spending reforms. But the people of Europe have come to feel entitled, and will not tolerate even the hint of a retreat from the wet nurse nanny state toward a more firm and responsible oversight government.
Americans are beginning to feel the same sense of blanket entitlement as the Europeans, thanks in part to having elected a community organiser as US President. Due to this massive growth of entitlement sense, the same type of riots seen in Arab countries and in Europe could easily spread to the large central cities of the US and Canada.
Risk of systemic fallout from Eurozone crisis
More from Mish on European abyss
The Obama path to collapse
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