Muddling toward mediocrity: The western world's strategy of economic pain avoidance

For those of us who have spent decades warning that entitlements will eventually crowd out most other forms of government expenditure (eventually necessitating ever-higher taxes and debt loads), events like those of last week are licenses for apocalyptic grumbling about looming fiscal catastrophe. Reminding people that we’re just one crude external shock away from a runaway debt spiral helps focus the attention, while indulging the universal taste for drama.

But the lived-in reality may be a good deal more boring than all that: a slow leak rather than a sharp slap. As long as the United States and the European Union remain–by far–the largest, most successful, and most liberal blocs in the world, they will likely get to skate above the worst potential consequences of their actions. Thomas L. Friedman fever-dreams to the contrary, China won’t be catching up to the U.S./EU lead during any of our lifetimes; the yuan is hardly poised to become the globe’s reserve currency. Even better-governed countries such as Switzerland have felt compelled to bend their own monetary policies to accommodate those of their larger, more reckless, cousins.