Few days ago I asked Nobel Prize Krugman why he had compared the debt to GDP ratio of Italy and Belgium to US as the picture below shows:I was surprised that a Nobel Prize would consider Belgium and Italy role models and their past experience as advanced countries.
We got this reply: "Both countries are a mess!
Um, guys, that’s the point. Belgium is politically weak because of the linguistic divide; Italy is politically weak because it’s Italy. If these countries can run up debts of more than 100 percent of GDP without being destroyed by bond vigilantes, so can we".
I am trying to follow it up here and here, but in the meantime I say YES, YOU CAN and GOD BLESS AMERICA.
Japan situation was not reviewed further, Belgium is not really relevant, but I wonder if Italian debt and deficits situation is just Deficit hysteria?