Debt or alive?

Today's must-read economics piece comes courtesy of Liz Alderman in the excellent New York Times blog DealBook.

Writing from Davos, site of the annual World Economic Forum gathering of Very Important People, Alderman points to the giant elephant in the chateau: rising debt.

Money quote:

The debt debacle that erupted last year in Greece and Ireland threatens not just Europe’s economic stability. It has also revived longstanding questions about whether the United States and Japan, weighed down by their own debt, are heading for a moment of truth.

The big point: Due to the way their societies are put together, Europe, Japan and the U.S. are faced with huge debt dilemmas. How much should goverments spend on boosting growth, without adding to giant mountains of debt?

The risk for the big three? Fickle global investors, of course.

Money quote 2:

“I could envisage (investors) focusing on California debt in one moment, and in the next on another European country,” said Joseph E. Stiglitz, a Nobel laureate in economics. “So I could see a series of rolling crises for an extended period of time,” he continued, in which investors “try to bring about the adverse results they anticipate.”

Of course, a lot of these problems in the U.S., Europe and Japan could be lessened by faster economic growth. Let's hope all that cheese and gossip produces some good ideas.