The debt crisis initiated by Greeceā€™s near default has subsided for the moment because of a trillion dollar bailout package from the European Union and the International Monetary Fund.

This is only a temporary respite, however; debt crises will recur soon, in more virulent fashion, and they will affect not just Greece and the other less economically robust countries of Europe but the United States, the rest of Europe, and high-income countries like Japan.

The fundamental problems are the interactions between demographics, technological progress in medicine, and entitlement programs.

Tax increases will not fix things; only major cutbacks in entitlements can avoid fiscal collapse.

The Twilight of the Welfare State? - Room for Debate Blog -