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... the question arises, should the rest of the world take over management of Europe to prevent or mitigate disaster? Specifically, should the US Federal Reserve assume leadership as a monetary superpower and impose policy on a paralyzed ECB, acting as a global lender of last resort?And for the answer I think we should turn to one of those well worn graphical illustrations of how deep America's debt rabbit hole goes. This one is an excellent example from usdebt.kleptocracy.us. The first image shows the approximate US public debt by the end of the year if it was a piles of actual size $100 bills compared to quite a famous landmark, and the second shows that plus its unfunded liabilities.
If you've read the captions on those images (you can embiggerfy, or better yet go look at the original where you can see a similar representation of the US budget for 2011) you'll have noticed that the first of those, the $15 trillion pile, is roughly the size of the Gross Domestic Product for the entire United States. In fact the captions are a little out of date - US debt will not now reach 100% of GDP by Christmas 2011 because that happened four weeks ago.
So actually the answer to the question of whether the US Federal Reserve should act as Europe's lender of last resort is not just "No" - it's "With what?"