“Crises Nudge Debt Loads to Brink” – WSJ
“The financial strains created by crises in Japan and Europe highlight a growing problem: The rich world is getting close to the point where it won’t be able to bear the costs of another disaster.
Japan and Europe face very different crises—one brought on by nature, the other man-made. But from a financial perspective, they’re strikingly similar. In both cases, the mounting costs of mitigating disaster are stretching governments’ already overburdened finances. In Japan, the advanced world’s most-indebted government, the outcome is still uncertain. In Europe, Portugal could soon become the latest country to seek a bailout.
The strains in Tokyo and Lisbon reflect a broader problem: As advanced-nation governments take on increasing responsibility for insulating their citizens, investors, banks and companies from the pain of disasters, they are pushing their financial resources closer to the limit. That, some economists say, could leave them without enough wherewithal to respond the next time a big crisis happens.” Read more.
“Crises Nudge Debt Loads to Brink”
Mark Whitehouse
Wall Street Journal, March 28, 2011.
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