But too much public spending has proven unsustainable in parts of Europe. Government finances of Portugal, Italy, Ireland, Greece, Spain — and now possibly Hungary — are shaky. And despite a bailout of nearly $1 trillion to keep Greece afloat, global investors continue to worry about whether the region can contain its debt crisis and prevent a default.
Europe isn’t the only one spooked by its public finances. Earlier this month, the surge in U.S. government spending helped push the national debt for the first time to a scary $13 trillion, which represents about 90% of GDP. Despite a $787 billion stimulus package, unemployment continues to hover near 10%.