In the early 1970's economist Arthur Okun developed the Misery Index.  This was intended to measure or put in some context the real-world suffering of the individual during an economic downturn.  It was also simple in its nature, as the index was a combination of the inflation rate and the unemployment rate; as such it was easy to understand and relate to. 

Today the issue is not just the suffering of individual citizens in countries throughout the world (and the United States) but the financial survival of these nations.  Never before in history have so many countries, particularly in the West, faced such dire economic prospects. 

A snapshot of the present-day health of any nation can be ascertained by reviewing two factors: annual government budget deficits as a per cent of Gross Domestic Product and the unemployment rate.  The accelerated level of deficit spending, except in times of a major war (such as World War II), is indicative of a lack of fiscal discipline and tax revenues sufficient to finance those expenditures.  These revenues can only come about from a growing economy and near full employment.  When high deficits are coupled with a dramatic increase in unemployment for more than two or three years in a row, that country has embarked on a dangerous road that will lead to insolvency if not addressed quickly.

Total national debt as a percent of GDP, while important and meaningful, becomes critical only when a country cannot meet its current debt obligations as a result of declining revenues, which are a byproduct of high unemployment as well as continued over-spending.  Some governments, for ideological reasons, and some who do not wish to confront reality choose to begin running extremely large annual deficits, which accelerates the growth of the national debt and also results in dramatically slower growth of the GDP.  This is the start of a never-ending death spiral unless spending is dramatically curtailed and the GDP grows, creating more jobs and thus tax revenues.

If a nation wishes to maintain its solvency and continue to expand its economy, it should not experience deficits higher than 3% of its GDP and, in today's quasi-welfare societies, unemployment rate above 6 to 7%.  On an aggregate basis a combination of these factors should always remain below 10.  The higher the index above 10, the greater the problems that country is experiencing and viable solutions to solve these dilemmas will be increasingly difficult to enact.

When viewed on this basis an "insolvency index" (a combination of the current budget deficit as a per cent of GDP and the current unemployment rate) of various nations throughout the world would be as follows over the past three years (http://www.indexmundi.com):

Among those nations presently facing insolvency, which have required or soon will require bailouts:

On the other hand there are some countries that have weathered the financial crisis of 2008 very well by controlling their spending and adopting fiscal policies geared to expand their economies.  Among them are:

Where does the United States stand by comparison (the Obama Years):

Other notable U.S. historical Index highlights:

1983 (the peak of the last major recession and highest index since 1947)   15.5

2002   (after the 9/11 terrorist attacks):                                                          6.58

2008   (financial market collapse):                                                                  9.0

The Bush Years (2001-2008):                                                                       7.4

The Obama Years (2009-2012):                                                                  19.1

Sources: Deficit as percent of GDP (http://usgovernmentspending.com/index.php)

                   Unemployment rate (http://www.infoplease.com/ipa/A0104719.html)

From 1947 through 2008, the U.S. experienced only three years with an index above 12.2.  The average index of the 61 years prior to 2009 was 6.9 it was during this period that America experienced the greatest era of wealth creation in the history of mankind.

Barack Obama has nearly succeeded in remaking the country into the worst of European socialist states.  With deficits in the trillions of dollars coupled with high unemployment over such a prolonged period, the United States, unless it makes massive cuts in spending, is facing insolvency -- a word that is being more frequently bandied about in various financial circles.  Particularly as the Obama administration and the Democrats show no inclination in promoting policies to stimulate economic growth as a means of job creation and deficit reduction, and are obstinate in their refusal to initiate significant spending reductions.

Recently the President of the Dallas Federal Reserve Bank, Richard Fisher said: "If we continue down the path on which the fiscal authorities put us, we will become insolvent, the question is when."  Bill Gross, President of the largest bond fund in the world, Pimco, has been outspoken in his belief that the U. S. is already insolvent as he divested Pimco of all their U.S. Treasuries.  The International Monetary Fund on the 17^th of June:

... cut its forecast for U.S. economic growth and warned Washington and debt-ridden European countries that they are "playing with fire" unless they take immediate steps to reduce their budget deficits.

The United States must reverse the current "insolvency index."  If it does not, then America will follow the path of Greece, Ireland, and others into insolvency and bankruptcy.  The images on television of the riots and civil unrest in Greece -- due to the need to make drastic changes to the spending habits of the government and expectations of the people -- will be repeated on American streets.