Could the Euro Debacle Get Any Worse?

While the Greeks are busy burning buildings to protest the austerity measures included in the bailouts offered by their generous and more solvent European neighbors, investors are fleeing European stock and bond markets. The Euro is plummeting and the ratings agencies cannot downgrade the PIIGs fast enough. It seems the folks at Moody's have no interest in being hauled before Congress to get yelled at for not warning investors that Portugal, or Spain, or Italy, or whoever might be next. At least the subprime debacle taught them the right lesson, eh?

Over here in the US, our economic data seems to be pointing to a respectable, although not spectacular, recovery. So why on earth do we care if the EU implodes? Can't we just go about our own business issuing piles of government debt to finance our various bailouts of banks, car companies, insurance companies, mortgage lenders, and anything else our legislators decide to throw into the mix? I mean, all of this chaos in European markets is forcing investors into US Treasuries because we remain the safe haven so that helps us finance our bloated deficit a bit cheaper. If it weren't for that nagging suspicion that the US was doing exactly the same thing as some of our less solvent friends across the pond (because it's really all relative,) I'd be running around in circles waving the American flag. The problem is: when investors stop being kind enough to finance our government's excesses, there's nobody big enough to bail us out.