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September/October 2012, 
Vol. 94, No. 5
Posted 2012-09-04

Sovereign Debt: A Modern Greek Tragedy

This article provide a general introduction to the concept of sovereign debt—including the seductive nature of borrowing and the strategies associated with default—before analyzing the current debt crises in Europe. The authors focus on Greece’s current woes but also discuss Portugal, Ireland, Italy, and Spain. The authors also discuss the environment in the United States, which has a high debt burden of its own, and present fiscal choices for policymakers and taxpayers.