Floyd Norris on which countries will turn out like Greece.

Which governments will not be able to pay their bills?

The ones with private sectors that are not doing well enough to bail out the government.

That should be one lesson of the near default this year of the Greek government. Government finances are important, but in the end it is the private sector that matters most.

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It may seem odd to talk of businesses bailing out governments, when the reverse is what appeared to happen over the last couple of years. But government credit, in the end, is based on its ability to collect taxes. A healthy private sector will provide the taxes, if they are to be provided at all. 

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The overseas debt of most countries is denominated in currencies the governments cannot print and its citizens do not use, which is one reason crises can sneak up on traditional analyses. Argentina’s debt-to-G.D.P. ratio was about 50 percent, recalled Albert Metz, a managing director of Moody’s, shortly before the nation defaulted in the 1990s. The currency collapsed, and the ratio tripled overnight.

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There is another lesson of the recent crisis that should be understood. The obligations of a country’s financial sector are, in extremis, contingent obligations of the government. Allowing the financial system to collapse is simply not an acceptable alternative.

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The left wants more stimulus spending, and sees economic optimism as playing into the hands of its opponents. The right wants proof that President Obama is doing a bad job, which it hopes will lead to large Republican gains in November, and sees economic pessimism as in its best interests.

In fact, there are few signs of a double-dip recession. As Daniel Gross asked in Slate this week, "Retail sales are up, and credit card debt is down. Why is that bad news?" Americans are spending about 5 percent more than a year ago, even with this week’s retail sales numbers that were pronounced disappointing by some. But it appears that the spending is coming more from those who can afford it than from those who need to borrow.

The important goal now is a healthy economy, and there are signs that it is arriving. Corporate profits were surprisingly strong in early 2010, and early second-quarter reports are encouraging.

It is the success, or failure, in obtaining that goal that will determine whether there is a real crisis in federal debt.

Yes the bursting of the housing bubble caused a lot of wealth and demand to vanish. However part of the financial crisis was pure panic and a "flight to safety." As people with money gain confidence, they'll begin spending and taking on risk.

The "demand for money" is high as those with wealth are being cautious. Which is why Bernanke should do a helicopter drop.