Determining exactly when a country has over-extended itself through borrowings is a subjective matter. Given that countries rarely repay their debt, it's all about servicing the interest and selling the story.
Last week the IMF criticised the US over its projected budget deficit for 2011, calling for cuts in health and pensions. The deficit will add to the growing mountain of US debt, which stands at about 100 per cent of GDP if you include state borrowings.
The IMF thinks this is too much and that it could threaten global recovery. Republican leaders, who have been pumping out the same mantra, will take succour and President Barack Obama's economic policies will appear even more out of step.
Even though the Democrats were not in power when the banking system blew up in America, they were punished by voters in the recent mid-term elections -- to the point where some feel Obama can be beaten next year. A short honeymoon.
Whilst the Republicans appear to have been swept back into office with gusto, their mandate may be questionable because ratings measuring trust in the US government have also slumped. This suggests that what voters are really after is political reform. It is their quid pro quo for accepting the inevitable cuts and a reduction in their standard of living.
Turning to the Irish election, there is an overwhelming desire by voters to register their anger which is understandable and necessary for the mental well-being of the country. But, like the US, the political system in Ireland needs a complete overhaul.
Any new government would be well served to remember this and witness how quickly the Democrats have fallen in the States. Long-term power will rest with the party that can bring the real reform that Ireland needs.
Max Doyle is a principal of Prime Focus Management specialising in investment and turnaround of Irish companies
Sunday Indo Business