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Me trying to sound reasonable

Today I wrote this comment on one of Felix’s blog posts….

Felix,

Are you comparing apples to oranges?

As I understand it, you are comparing the federal debt in the US to the average national debt in the EU. On the face of it, this would seem to be a fair comparison. But I am under the impression that EU countries have far less municipal and province level debt than the US. As I understand it, this is due to the fact that the average EU nation has a stronger central government. Am I misinformed?

If I am correct, it would seem to me that comparing US federal debt to average EU national debt is an unfair comparison. In the US a lot of public services are funded at the state level where as they would be provided at a national level in other countries. Education would be a prime example of this.

Thus, after America has paid out 3% of GDP by paying interest on national debt, they still have to pay out a hefty portion of GDP on municipal and state debt that other nations don’t have to worry about (at least not to the same degree). See New York, California, New Jersey, and Michigan just for starters.

By just focusing on sovereign debt, I think you are painting a misleading picture of the debt servicing cost that the American taxpayer is going to have to carry relative to the EU taxpayer.

That was me trying to be reasonable. The part of me that is a jerk wanted to say “What part of being like Belgium or Italy sounds okay to you?”

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