[socratees]

I just hear it everywhere. I'm sure the whole world has too much at stake if US Dollar loses its value. The economy might stagflate for a while, but I believe it will eventually recover. After all, USA is the largest economy in the world.

[teilo]

So - you're saying that the USA is "too big to fail"?

[colinplamondon]

Worked for AIG, it's just that the acquirer (the United States government) got a majority ownership stake. I don't see a reason that the same couldn't hold true on the nation-state level.

[fleitz]

What special property does having the largest economy in the world have against it collapsing through the application of poor economic theory?

I would hazard a guess that Zimbabwe has massive inflation because of the Mugabe school of economic thought rather than because it is a small economy.

[swombat]

Things like "economies" work by practical consensus rather than by theory. The dollar has the value that we all agree it has.

[jacquesm]

The USA does not have the largest economy in the world by far:

http://upload.wikimedia.org/wikipedia/commons/7/70/Nominal_G...

[ivankirigin]

The EU has 2.6 times the population, and isn't a single country.

[jacquesm]

Where did I claim the EU is a single country ? We were comparing economies, not countries.

[jibiki]

Honest question: what is an economy?

[jacquesm]

That'a good one.

I think an economy is a region with a 'scope' that depends on the discussion at hand. You could speak about the ecnomy of Colombia in isolation, or you could look at the economy of Latin America as a whole. When comparing you'd compare Latin America as a whole with for instance North America, Europe or Asia.

It is common to compare the US economy vs the EU economy or all of Asia, not to compare the economy of Germany with Texas.

Usually regions that can be lumped together share a border.

To make the comparision more fair I think if you wish to compare 'apples with apples' as much as possible probably the inclusion of the NAFTA region would be more appropriate when comparing with the EU.

[ivankirigin]

It's just an apples & oranges comparison, especially because the euro isn't as popular a reserve currency.

[Retric]

The EU, is far from a single country. Each state still handles it's own treaties with the rest of the world.

Looking at: http://en.wikipedia.org/wiki/File:Supranational_European_Bod... European economic zone is a larger economic group. And the UN is even larger, but hey that's another story.

[socratees]

But technically EU isn't a country right?

[anigbrowl]

Technically US states are sovereign too :) ...and really, if you looked at the US states as separate economies you'd see many glaring dichotomies that would make you wonder how it can be considered a single economic entity.

No, Europe's not a country, but it behaves like one for trade and currency purposes and has no internal tariffs. Nor can Germany (for example) impose a tariff separately from the EU. So in this context, the EU might as well be a country.

[jacquesm]

Technically the USA isn't a country but an agglomeration (federation) of states.

Originally the EU was fully called the European Economic Community, the goal was to form a single economy. Whether or not it is a single country is not an issue here, the OP spoke about 'economy', not about 'country'.

[tjogin]

Does it absolutely have to be a country to be relevant? The EU share the same currency. I don't know for sure, but I can't quite think of a reason why economies absolutely have to be countries.

[graphene]

Eurozone != EU

When you sum the GDPs of Euro using countries, you get 12.23 trillion dollars, or slightly less than the USA's GDP (http://www03.wolframalpha.com/input/?i=eurozone+gdp+vs+USA+g...).

How the size of an economy correlates with its resillience remains an entrirely different question IMHO.

[colins_pride]

It took a lot of self-restraint to keep me from downvoting-this-because-I-disagreed-with-it

[LogicHoleFlaw]

Maybe I'm just a hopeless optimist, but I have to believe in bouncing back. Sure, times are rough right now but people are more resilient than they are getting credit for right now.

[TomOfTTB]

Well, and bear with me here, but have you considered the idea that "bouncing back" isn't the optimistic solution? Say what you will about politics the reality is both President Obama and former President Bush signed us up for a hail mary play largely based on the idea that people should never have to act responsibly. That they can sign a deal that's obviously too good to be true and borrow 10 times their projected earnings because the Government WILL ALWAYS be able to bail them out.

That's both sides of the political spectrum endorsing irresponsibility

But you can't live like that. Government != God meaning that misconception can't last forever. Following that logic it means our society learns this lesson now or by some miracle gets by only to have the next generations face a collapse and learn it. Maybe it's time to feel some pain now so our Children and Grandchildren get the message that the Government can't always bail you out.

[jpwagner]

http://en.wikipedia.org/wiki/File:GDP.jpg