[gph1]

Debt is a symptom, not the problem. The problem is a currency union with no central fiscal agent that can assume liabilities and enable transfers from wealthier to poorer states. That's how the US works. The euro crisis has been baked in from the beginning.

Which is why it's inaccurate to generalize this problem to "western states". The US is not comparable to any EZ country. We have our own currency and have been able to run large deficits to counteract the demand shortfall caused by the financial crisis and allow the prvt sector to repair balance sheets. This is why the recovery in the US has been much better than the UK or the EZ.

[InclinedPlane]

More so, the economic disparities throughout the US are far less than in the Eurozone. In the US, per capita GDP between states varies by about a factor of 2 (from mid 30k to mid 60k). In the eurozone the difference is closer to a factor of 3.5 (from mid 10k to around 50k). However, even that statistic is a bit misleading due to population because a lot of the lowest per capita GDP US states also have fairly smallish populations compared to Eurozone countries. If you add up the populations of all the US states with per capita GDP's less than 40k you get a total population of about 42 million. If you do the same for the Eurozone the total population is about 140 million, or nearly half the population of the entire Eurozone. Similarly, over 30 million people are living in countries with per capita GDP less than 30k, whereas even the poorest US state is higher than that.

Also, the wealthiest Eurozone countries are not as wealthy as the wealthiest US states, by a fairly significant margin. On the whole the Eurozone ends up being on average about as wealthy, in per capita GDP, as arkansas. The whole system is in need of far greater management than the US dollar but lacks the power to do so, and in total has far less wealth to be able to spend their way out of the problem.

[iwwr]

Sorry for taking you slightly out of context:

"The US is not comparable to any EZ country. We have our own currency"

Qualitatively, I would see no difference between the US monetizing debt (and devaluing the value thereof) or something like Greece switching to a new currency which they can print (and devaluing the value thereof). Of course, the amount of devaluation (or default) Greece has to do is much greater. But in either case, some debtors are getting stiffed

Strictly, Greece has no money to pay back debtors, let alone fulfill their social obligations. But even the US obligations: debt + social security + medicare/medicaid etc. are now at an unsustainable level.

[dmix]

The comparison between states of a country and countries in europe is in no way as straight forward. The marcoeconomics is way more complicated when you're talking about highly varied countries, each with their own governments.

Besides the eurozone is already trying to adopt a central bank style system:

http://www.nytimes.com/2012/12/14/business/global/eu-leaders...