Behind the downgrades and the doubt: A crisis of growth

Paul Mason Economics editor, Newsnight

If, within the space of the coming month, the Eurozone sees the first developed country default since World War II, and combined with that the US loses its AAA credit score, something's up. But what?

In the first place, we are experiencing the tail-end shocks of the global financial crisis.

The bad debt in the system has not been written off, but the liabilities assumed instead by states - through bank bailouts, fiscal stimulus, and a huge regulatory forbearance that has left many institutions, from corner shops to central banks, adopting the "extend and pretend" strategy. That is, extend repayment and pretend the losses do not exist.

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