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First the German hint at returning to the Deutchmark and now the Italians are fondly remembering the Lira...

One thing Italy and Germany have in common is the more economically and socially advanced areas (“West Germany” and the “Northern Italy”) have spent a decade attempting to finance the economic and social reconstruction of a geographically concentrated retrograde portion of their respective countries (the “East Germany” and "Southern Italy") - it’s sort as if around 1950 the more economically successful half of the US had decided (or been forced by events) to finance the economic revitalization and social reconstruction of the most depressed areas of the America South and Southwest – and do it in a decade.

This has been enormously expensive and socially disruptive (a lot of people in Eastern Germany and Southern Italy don’t like being told that their personal lives and social arrangements must be “reformed” any more than a lot of people in the US would have wanted to hear the same), and so far the people footing the bill often appear to have received nothing but low-wage competition and complaints from their Eastern and Southern brethren in return, so it’s hardly surprising they are pissed.

But then, I suppose there are a lot of Blue state Democrats who feel the same – they watch the net tax flows form their pockets into Red states filled with voters who are contemptuous of Blue State “values”, wonder whey they are footing the bill for their own abuse and the economic development of their competitors, and if they though about it would probably wish they could issue their own currency and levy tariffs on lower costs goods from right-to-work states to protect their jobs.

But somehow I don’t think it works that way – either here or in Europe – such efforts may be able to somewhat cushion the blow of competition from low wage / high productivity competitors, but the inexorable logic of the situation is that the vast majority of citizens in ANY mature industrial economy are caught for the next few decades in a situation where the challenge is to hold average standards of living even with the past rather than to greatly improve them, while at the same time funding massive efforts to preserve national and international stability by improving economic and social standards worldwide. And it’s not as though we can decide to just kick the UN out of NY and just refuse to pay; the bill always gets presented, one way or another, see for example the recent invoice for “stabilizing” Iraq and Afghanistan: $800,000,000,000.00

So welcome to the world of England circa 1920 – the last time a previously world-dominant national economic and monetary system was faced with this sort of challenge.