Two other views on Greece and the US

Mark Thoma at Economist View points us to Stiglitz and Rogoff on Europe’s Financial Troubles:

Joseph Stiglitz:
Can the Euro be Saved?, by Joseph E. Stiglitz, Commentary, Project Syndicate:

…Fixing the exchange rate and delegating monetary policy to the European Central Bank eliminated two primary means by which national governments stimulate their economies to avoid recession. What could replace them? …
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One proposed solution is for these countries to engineer the equivalent of a devaluation – a uniform decrease in wages…
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There is a second solution: the exit of Germany from the eurozone or the division of the eurozone into two sub-regions…
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There is a third solution, which Europe may come to realize is the most promising for all: implement the institutional reforms, including the necessary fiscal framework, that should have been made when the euro was launched…

Kenneth Rogoff:
Europe finds the old rules still apply, Commentary, Financial Times

The eurozone experiment was, in effect, an attempt to speed up the graduation process through the carrot of the single currency and the stick of harsher bail-out rules. Instead of having to demonstrate fortitude and commitment through decades of surpluses and declining public debt levels (as for example, Chile has done), euro members were allowed to have their cake and eat it, too. … Greece could run up its public debt to more than 115 per cent of GDP. Even more stunning a figure is Greece’s total external debt to GDP, which is more than 170 per cent, counting both public and private debt. Prof Reinhart and I find that most emerging markets run into trouble at external debt levels of merely 60 per cent of GDP. …
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In our book on financial history, Prof Reinhart and I find that international banking crises are almost invariably followed by sovereign debt crises. Will the euro prove to be a firewall against this process, or a debt machine that fuels it? It is going to be extremely difficult for some of the peripheral eurozone economies to escape without large-scale defaults on their massive private external debts, public external debts, or both.