The Europeans have come up with a solution to the Euro crisis: threaten S&P and Moody’s. After all, if no one is allowed to point out that the emperor has no clothes, who’s going to notice?

Meanwhile, everyone with any sense is dumping Greek and now Portuguese debt as fast as they can. Hint to traders: now is the time to dump all of your Icelandic, Irish, Italian, and Spanish bonds, assuming you can find anyone foolish enough to buy them. Fools are quickly becoming harder to find. If someone offered me that junk at $0.10 on the dollar, I’d flee screaming.

To give you an idea of the scale of the problem, Greece, which is about the size and population of Ohio, is now close to $600 billion in debt. But the situation is actually much worse than those figures indicate. Ohio has a robust economy. Greece has no economy to speak of, and no prospect of developing one. Think of Greece as Ohio with a Soviet-style economy and you won’t be far off the mark. And Portugal, Iceland, Ireland, Italy, and Spain aren’t much better.

People are now talking about “partial default” and “temporary default”. There’s nothing partial or temporary about it. We’re looking at default default. One morning in the not-too-distant future, we’ll awaken to news that the dominoes are toppling and the Euro has gone down the tubes. Count on it.

I confess to some small satisfaction in having been absolutely right about what was happening and would happen since I started posting about the collapse of the EU and the Euro more than a year ago. Of course, my satisfaction is tempered by the fact that we’re facing a world-wide disaster, and the fact that the US will do much better than other nations is of little comfort because in absolute terms we’re going to be hurting badly.

Incidentally, a few minutes ago I came across a very smart woman (obviously, she’s a genius because she agrees completely with me).

The countdown has already begun.

Obama and the Democrats seem determined to raise taxes even further, while the Republicans refuse to budge on new taxes unless they’re offset by reduced taxes elsewhere. I have a modest suggestion. As things stand, fully half of Americans pay no income taxes whatsoever. In fact, many pay a negative tax, because tax credits offset any taxes due, resulting in a “refund” of taxes they never paid.

So, how about we remove the personal exemptions and standard deduction, and begin taxing that untaxed 50%. At the same time, we can reduce the tax rate to reduce the taxes due from middle-class taxpayers by an amount sufficient to offset the loss of the personal exemptions and standard deduction. That would make the Democrats happy, because we’d be increasing taxes, but it would also make the Republicans happy because those tax increases would be completely offset by tax reductions elsewhere.

We can then get to reducing the deficit. I suggest a 100% reduction in deficit spending the first year and every year that follows. Economic growth should then allow us to begin cutting down the existing debt.