Are America’s fiscal prospects even worse than Europe’s?

At first glance, America's fiscal prospects are worse than those of the peripheral euro-zone countries, although the US does have a few key advantages that mean it should continue to enjoy very low borrowing costs. Fiscal austerity and restraint will be the focus for the next few years but, if economic growth remains as weak as we fear, then policymakers may eventually become desperate enough to consider a deliberate policy of higher inflation.