Turning Japanese

A GOVERNMENT'S credibility is founded on its commitment to honour its debts. As a result of the dramas of the past few weeks, that crucial commodity is eroding in the West. The struggles in Europe to keep Greece in the euro zone and the brinkmanship in America over the debt ceiling have presented investors with an unattractive choice: should you buy the currency that may default, or the one that could disintegrate?

In the early days of the economic crisis the West's leaders did a reasonable job of clearing up a mess that was only partly of their making. Now the politicians have become the problem. In both America and Europe, they are exhibiting the sort of behaviour that could turn a downturn into stagnation. The West's leaders are not willing to make tough choices; and everybody—the markets, the leaders of the emerging world, the banks, even the voters—knows it. It is a mark of how low expectations have sunk that the euro zone's half-rescue of Greece on July 21st was greeted with relief. As The Economist went to press, it still was not clear on what terms America's debt limit would be raised, and for how long. Even if the current crises abate or are averted, the real danger persists: that the West's political system cannot take the difficult decisions needed to recover from a crisis and prosper in the years ahead.