Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

In late July 2011, as Sarkozy, Merkel and Trichet diced with the future of the eurozone, the United States was perilously close to the edge. There was no longer any disagreement in Washington about the need for urgent fiscal consolidation.67 But there was a huge divide between Democrats insisting on a balanced approach to deficit reduction, involving tax increases as well as entitlement cuts, and Republicans focused exclusively on spending reductions. The Speaker of the House, John Boehner, was looking to assert his control over the Tea Party faction by striking a deal with the White House to achieve deficit cuts of $4 trillion over ten years. But on July 22 the talks between Boehner and the Obama administration broke down over Republican demands for slashing reductions in medical spending and the White