It's May Day and a good time to be in Athens. There are "manifestations" outside our hotel. Public sector employees are not happy that generous benefits might end. Private sector people are unhappy with their public sector colleagues for getting them into the mess. Discipline will come from the outside or things will get worse. Downward spirals can be really ugly.
James Carville famously said that he wants to be a bond trader in his next life because they have the power. He probably meant bond markets. At some point, sovereign debt becomes unattractive and downgrades occur. Politicians' vote buying is a fact of life. If discipline is not available from domestic sources, it has to come from abroad. The constituencies for profligacy easily take charge. Where is there a constituency for discipline? We now have EU countries (the PIIGS?) that may be going the way of Argentina.
In the U.S. case, we have growing deficits, but a Presidential commission to look into the matter. And we have a Federal Reserve promising that they have plans to some day unwind.
The U.S. constituency for profligacy is also well established. What are the odds of a serious constituency for discipline?