To understand the intractable, if not impossible, financial problems in the U.S., see "Spiraling to Bankruptcy." Conditions in Europe are similar to the U.S.'s. As pointed out in "Welfare States R.I.P.," all democratic welfare states are on the verge of default.
It is necessary to provide only a short list of economic problems to see the critical condition we are in:
-Virtually everything you look at is broken and unfixable, from both a mathematical and political standpoint.
-All democratic welfare states are insolvent and incapable of meeting their obligations.
-Sovereign defaults are likely and will likely occur in domino fashion.
-Insane economic policies and regulations are making matters worse.
-Businesses are not hiring or investing because of the uncertainty that has been imposed on the country.
-Wealth, intellect, and corporations will flee this country.
-More than half of the states are likely to default on their obligations.
-Most major municipalities have pension obligations that will be unable to be met.
-Individuals are still over their heads in debt with no hope in sight.
-The housing market has farther to go on the downside. Foreclosures will accelerate.
-Commercial real estate is a disaster that has not yet hit full force.
-Joblessness is not improving and will get worse.
-Infrastructure has deteriorated. There are no funds available upgrade it to proper standards.
-Private pensions and union pensions are grossly underfunded and likely to become worse when financial markets tank.
-The welfare system is unsustainable and has to be dismantled.
-Generations have grown accustomed to entitlements and will not take kindly to the necessary reductions and eliminations.
-Education has deteriorated to levels such that many graduates are literally unemployable at a minimum wage, or at any wage.
-The banking system is insolvent, with many banks unlikely to survive.
-Social Security and Medicare are unsustainable programs that will collapse or have benefits so reduced as to make them virtually unrecognizable.
-Government guarantees of Fannie, Freddie, FHA, and a host of other programs will likely require $2 trillion-plus to honor at taxpayer expense.
-Anything the government touches, it destroys, be it social programs, the post office, Amtrak, education, or (soon to be) the entire credit system, General Motors, student loans, etc. -- and finally, the entire economy.
-The FDIC is in a deep hole from which there is no escape other than additional taxpayer bailouts.
This economic list is off the cuff and not comprehensive. Geopolitical risks, if considered, would produce another frightening list.