Under the Maastricht Treaty, leading to the European monetary union, budget deficits were sharply limited to as a percentage gross domestic product (GDP) and total debt was restricted to 60% of GDP.
However,Greece consistently cheated. France and Germany and others also broke the Treaty agreement in this regard.
Ben Bernanke, the head of the Federal Reserve Bank in the U. S., has said that total debt of 2% and 3% of gross domestic product (GDP) is sustainable, and we are now past that level. (The extraordinary Fannie Mae and Freddie Mae debt are not in the federal budget.)
So why are we not headed down the same road to disaster?
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