Frum: America's Debt Crisis Mirrors Europe's

On NPR's Marketplace, David Frum points out the similarities between Europe's debt crisis and America's:

Can't pay -- or won't pay?

On Monday, European financial markets were rocked by new fears for the future of the Euro currency. The Euro dropped to a two-month low against the dollar. Borrowing costs are spiking not only for Greece, but also for Portugal, Ireland, and Spain. The Italian stock market dropped 3.3 percent in a day.

You can see why markets are frightened. The countries of southern Europe have borrowed enormous amounts in Euros. They must either cut spending or raise takes to pay that debt in today's tougher economic environment. But voters erupt in protest when governments take steps to balance their budget. The TV cameras focus on the riots in Athens, but the real news is delivered at the ballot box. On Sunday, Spanish voters hammered the governing Socialist party in local elections.

Politicians may believe in the Euro. They may want to pay their debts. But above all else, they want to preserve their hold on office. Default beckons as the easiest way out.

But it's not just Europe, and it's not just about the Euro.

Here in the United States, default talk is gathering too. The problem is not that the U.S. cannot pay its debts. Even now, despite all the apocalyptic talk, the debt-GDP ratio remains below the peak levels of the Truman administration.

The problem is that the United States political system cannot produce agreement on the measures necessary to service the debt and then gradually reduce it. ...

Click here to listen.