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March 16, 2010

U.S. States: Feeding at the Trough with Other PIIGS

Daryl Jones, Fortune

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NEW YORK (Fortune) -- The term PIIGS has been coined to refer collectively to Portugal, Italy, Ireland, Greece, and Spain. Aside from being a cute acronym, the term describes the actions of these countries very aptly as they have acted "piggish" in issuing debt to support overzealous government budgets. While the American media has at times made light of these countries and their PIIGS moniker, the same mistakes are at play in creating domestic pigs.

If PIIGS refers to nations that have overspent and are now overleveraging to pay for their deficits, the United States is feeding from the same trough.

There are two key ratios used to highlight when a government is reaching the crisis zone of fiscal imbalance: the debt-to-GDP ratio and deficit-as-a-percentage-of-GDP....

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TAGGED: Eurozone, Greece

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