Sovereign Debt Pressure

he European countries seem to be facing a road with no easy exit. One on side they are facing fiscal deficits. On other side they are already dealing with an important debt amount that can hardly be sustained, as the case of Greece is showing these days. On even another front, governments are facing strong opposition on part of their citizens, like the “indignados” in Spain, to not cut spending. Too high debt over one shoulder and fiscal deficit over the other, revenue cannot be easily increased and the citizens oppose to cut spending. Certainly not an easy dilemma to solve.

The United States, however, is not free from this problem either. The following chart from The Economist shows “what it would take governments to reduce gross debt to 60% of GDP by 2026.”