The European Debt Crisis In One Chart

Via Niklas Blanchard, Marcus Nunes has the most important Eurozone chart nobody’s talking about.

Talk of “irresponsible” borrowing or irresponsible lending needs to be put in terms of the fact that nominal incomes in the Eurozone are 15 percent below where a reasonable person would have expected them to be four or five years ago. It would be absurd to have based your borrowing and lending behavior on the assumption that such a large shortfall would open up and persist. And to be clear, this is a nominal shortfall not a sign of the inherent unsustainability of the welfare state, the limits of the export-oriented German economic model, the corruption of Silvio Berlusconi, the perfidy of Fianna Fail, or anything else like that. It would be amazing if banks weren’t collapsing under these circumstances.