Is Portugal The Next Greece?

This is another article on the problems with the emphasis on fiscal contraction as the weapon of choice in Europe. The focus is on Portugal which faces a debt deflation problem, Indebted households have been forced to increase saving. If the government increases savings at the same time, the economy is bound to tank. Government spending should increase to absorb the excess savings in the private economy. The problem, however, is that Portugal is faced with a burden of high interest rates for its public borrowing.