Simon Johnson

The U.S. has a fiscal crisis, but not the one that everyone is talking about. Standard and Poor’s proved beyond a reasonable doubt that the U.S. still has the world’s preeminent reserve currency. When shocks hit -- and investors have no idea who or what might be next in line for a downgrade -- they buy U.S. government securities.

The summer debate that has dominated Washington seems straightforward. Under what conditions should the U.S. government be allowed to borrow more money? The numbers that have been bandied about focus on reducing the cumulative deficit projection over the next 10 years, as measured by the Congressional Budget Office.

There are three types of contagion in a financial crisis, when the potential collapse of a firm, bank or country threatens to spiral out of control. The European Union today has all three.

In recent days, Greece’s parliament adopted new austerity measures and Europe’s finance ministers approved another round of Greek loans. So the European debt crisis is under control, right?

In today’s world, there are three kinds of fiscal crises brought on by too much government spending, and three kinds of responses. We can call them the nightmare scenario, the preemptive experiment and the head-in- the-sand model.

When Jamie Dimon confronted Federal Reserve Chairman Ben S. Bernanke at a conference earlier this week, he spoke for dozens of bank executives who privately believe regulators have gone overboard in seeking to prevent another financial crisis. “Has anyone bothered to study the cumulative effect of all these things?” he asked. “Is this holding us back at this point?”

Jean-Claude Trichet , president of the European Central Bank until October, last week floated two proposals aimed at dealing with Greece and related eurozone public-debt problems.

Former Federal Reserve Chairman Paul Volcker and former Citigroup Inc. co-chairman John Reed have been named to a Federal Deposit Insurance Corp. panel that will help the agency map strategy for unwinding too-big-to-fail financial firms when they collapse.

On the basketball court of Rome’s Liceo Massimo high school about five decades ago, Mario Draghi modeled his playing on that of future Hall of Fame hoopster and U.S. Senator Bill Bradley , then shooting for Olimpia Milano.

The debate over choosing the next managing director of the International Monetary Fund is ostensibly about whether its succession process is transparent and merit-based. But this is code for a more important issue -– whether the time has come for Western Europe to give up control of the IMF. There is a valid economic case that the next chief should come not from Europe, as tradition dictates, but from one of the emerging markets. India, South Africa, China, Mexico and Brazil all have strong candidates.