AEI Resident fellow Alex Pollock examines past sovereign debt crises, especially the European crisis of the 1920s, in the context of the current economic situation for a piece in the latest Financial Services Outlook and the Wall Street Journal.

History shows us that sovereign governments often default on their loans, particularly in times of war or economic upheaval. Europe finds itself in this situation now and would do well to examine past sovereign debt crises—particularly, the European sovereign debt crisis of the 1920s—for lessons.

Economist John Makin explores, in his latest Economic Outlook, why the Eurozone crisis has worsened so quickly in recent weeks and what options this leaves for Europe.

The most likely source of a U.S. sovereign debt crisis is a failure of the U.S. political system to address the growth of the major entitlement programs--Social Security, Medicare and Medicaid.

The exposure of the European banks to the sovereign debt of certain European countries has intensified the current financial crisis in Europe. As a byproduct of this crisis (and to a degree, S&P’s downgrade of United States debt during the past summer), government officials in Europe were unhappy with the judgments of the markets about the creditworthiness of some governments.

Europe is now battling an acute systemic debt crisis that threatens the global financial system and the global economy. This worsening crisis constitutes the largest single threat to the US economy and its financial system

Over the past few months, there has been a marked intensification of the Eurozone debt crisis that could have major implications for the United States economy in 2012.