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“Bailing out” has recently become a standard expression in newspapers’ business sections all over the world. First, there was the financial sector, followed by the automotive industry until finally many large and middle-sized companies longed for public help. The survival of huge corporations or crucial financial institutions is of great interest in a crisis that has come close to a collapse of both the capital and labour markets but over the long run another question arises: Who’s going to bail out the governments?

Imagine the US not just borrowing some USD 730 billion for the fiscal stimulus package to fight a deep recession but borrowing this sum every year from now on until forever. This is the amount the US would have to pay as an annuity for its pre-crisis explicit and implicit debt if no reform of social security and other entitlement programs like Medicare were instituted. Other developed countries are better off but still far from fiscal sustainability.