For those of us who have spent decades warning that entitlements will eventually crowd out most other forms of government expenditure (eventually necessitating ever-higher taxes and debt loads), events like those of last week are licenses for apocalyptic grumbling about looming fiscal catastrophe. Reminding people that we’re just one crude external shock away from a runaway debt spiral helps focus the attention, while indulging the universal taste for drama.

But the lived-in reality may be a good deal more boring than all that: a slow leak rather than a sharp slap. As long as the United States and the European Union remain–by far–the largest, most successful, and most liberal blocs in the world, they will likely get to skate above the worst potential consequences of their actions. Thomas L. Friedman fever-dreams to the contrary, China won’t be catching up to the U.S./EU lead during any of our lifetimes; the yuan is hardly poised to become the globe’s reserve currency. Even better-governed countries such as Switzerland have felt compelled to bend their own monetary policies to accommodate those of their larger, more reckless, cousins.

So if not a clarifying debtpocalypse, what might the future look like on either side of the Atlantic? I’m guessing much like on either side of the Pacific.

In one corner stands Japan, now contemplating a third consecutive “lost decade.” The once unstoppable economic powerhouse has been mired in a mild, post-bubble economic malaise for an entire generation, as successive bank bailouts and stimuli failed to jump-start meaningful growth. It’s still a pleasant place to live, particularly if you’re old, but every year people’s sights just get set a little lower. American President Barack Obama, despite explicitly warning against creating another “lost decade,” has nonethelesspursued many of the same policies, and produced an economic track record as bad as any modern president’s.

But I think the more likely scenario is the one being played out in California: dreary, internecine battles over a shrinking revenue pie, while potholes deepen, libraries close, population stagnates, and lousy political results of all types—unemployment,deficits, even government itself—receive the apologetic prefix of “structural.” The kind of place where the largest municipal bankruptcy in the nation’s history is greeted with a lecture by the state’s largest newspaper to avoid “finger-pointing.”

More.