CHAPTER 6
THE EUROPEAN ECONOMIC AND CURRENCY CRISES
The euro will not survive the first major European recession.
—Milton Friedman, 1999
Anyone who pays even a modicum of attention to the news is well aware of the financial and currency crisis spreading throughout Europe. This crisis, described by many as a contagion, is brought on by government spending more than it takes in as tax revenue and borrowing the difference—sovereign debt. That practice is well-accepted by many European nations and unfortunately the United States as well. Sovereign debt is debt issued by a government in another currency, but for purposes of this book, it is the same as any government debt. Most European debt is issued in euros, although no one country controls this ...
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