Eurozone crisis

This is a brilliant chart, highlighting the Eurozone crisis:

http://www.bbc.co.uk/news/business-13366011

If you think of GDP as your salary, and the annual deficit as the amount you borrow each year to make ends meet, you can see that most countries have been living beyond their means for many years, with only Finland actively saving money.  (Ireland was saving, but the 'celtic tiger' collapsed so spectacularly, they are now running a 30% deficit, which is unheard of in a first world country.)

When California faced its budget crisis in 2008, it was forced to increase taxes and curb its spending in order to bring its budget under control. Imagine the alternative -- that California had simply continued borrowing money (and lying to the Federal government about how much it was borrowing) in order to pay its bills.  Eventually it would have gotten to the point where it couldn't borrow any more, which meant it couldn't pay back what it owed, and would have defaulted on its loans.

Of course, governments do that all the time, but then they "devalue" the currency, in effect saying that it's worth less, and therefore they don't have to pay as much back. California can't do that because it doesn't control the dollar, and the Federal Government wouldn't devalue the dollar just because of California, so what would eventually happen is the Federal Government would have to step in and pay off California's debt.

That's exactly the same situation the Eurozone finds itself in with Greece, except with two key differences:. 
1. Unlike the US -- where the Federal government has control and oversight of the 50 States -- the Euro is simply an agreement between member countries, with each country promising to behave responsibly.  Greece actually lied about its financial condition for many years prior to the crisis.
2. When California tried to control spending, people were unhappy.  When Greece tried to do the same, the people rioted!

The EU have already given Greece 220 billion euros (US $300 billion) and this week they rokered a deal to forgive Greece half of its debts, all in exchange for the promise that Greece would curb its spending...and the Greek prime minister thumbed his nose at it!  Today, three years after this all came to light, Greece is still running an annual deficit, borrowing more than it can possibly pay back.

But the bigger problem is that, as the chart shows, it is clearly not limited to Portugal, Ireland, Greece, and Spain (the so-called "PIGS" countries). In terms of GDP, the UK is running an annual deficit equal to Greece, and worse than Spain!  Germany and France, who are having to bail out the other countries, are already running their own deficit.  (France is at 7%, and Germany at 3.3%)

And while the US has recovered somewhat from George W's final farewell -- taking the US from a balanced budget to a 10% annual deficit in just 8 short years (and implementing tax cuts at the same time!) -- it is not much better.

The only bright spot appears to be Estonia, which has achieved a balanced budget during the economic recession!  Why isn't anyone getting financial advice from them?