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Cartoon: How broke is America?

Funny money cartoon - Gushers: Dollars, Euros, Pound Sterling caricature © Matthew Buck Hack Cartoons
© Matthew Buck Hack Cartoons

There is a lot of focus at present on the prospects for the Euro, the European currency. This is because of the debt crisis in some of Europe’s smaller states, Ireland, Greece and Portugal.

However, until yesterday (Reuters link), there had been much less attention in the UK media about the debt crisis in the United States of America.

This link reveals that more than thirty of the fifty US states (in many cases much bigger economies than the named European countries – ProPublica link) are thought to be bankrupt and existing only through loans from the federal (national) government and with money created by the Federal Reserve Bank.

This process is roughly equivalent to the help that the European Union and the European Central Bank is giving (also on terms) to Ireland, Greece and Portugal.

Both the European and American authorities have been dealing with these debt problems by massively increasing the supply of paper money (through so-called Quantitative Easing. This devalues and dilutes the value of paper money already in circulation and makes goods and services more expensive for consumers and companies.

Numbers are tricky things but as the drawing indicates these money gushers, in Europe, America and here in the UK are a desperate policy endorsed and employed by desperate government authorities on either side of the Alantic.

If you know better please tell me how in the comments below. Thanks for reading.

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