This will have the effect of maintaining high levels of mortgagor delinquency. As mortgage financing has remained a public affair via the open-ended backstopping of Fannie Mae and Freddie Mac and via the mortgage-backed securities on the Federal Reserve’s balance sheet, the housing overhang will remain a drag on economic expansion for the foreseeable future.

At No Left Turns, the pseudonymous Richard Adams asks: “Should Christian Scientists be exempt from the requirement that all American citizens buy government-approved health insurance?” A commenter answers: “I thought there were religious exemptions; maybe this will boost their membership.” As they say, it only hurts when I laugh.

Fiscal imbalance is a very long-term measure of sustainability. The low fertility rate in Europe is one of the biggest factors making their welfare states unsustainable. What is striking about Greece relative to other European countries is not the differences but the similarities. It just happened that Greece is the first country where the crisis hit. Within ten years, it is more likely that the U.S. will have a European-style welfare system than it is that the European welfare systems will still be intact.

My own guess is that the United States will raise taxes substantially, and taxes will reach levels as a percentage of GDP never seen in U.S. history (although common in Europe). The politics of that will be fascinating to watch. If the political process is stymied as our leaders debate the relative merits of tax hikes versus spending cuts, bond investors may get nervous, and we could get witness either the Krugman inflation scenario or the much less likely default scenario.

Just before the last election, the chief executive of one of the hospitals in which I once worked was overheard saying, “My job is to make sure that the government is reelected.” (The government’s job, in turn, was to make sure that she remained chief executive.) She also explained that the hospital could expect no increase in its government funding, unlike other hospitals—because it was located in an area in which most people voted for the government anyway.