These days, the top story in all leading business and economic news across the globe is the debt crises on both sides of the Atlantic. When the focal point in the US has been the much hyped national debt ceiling debate, in Europe the major issue has been the Euro zone debt crisis that has seen a need for fiscal bailouts of some countries. The Euro zone and US debt crises have multiple dimensional impacts on the current economic scenario, some of which are outlined in this article. The Eurozone debt crisis The crisis in the Euro zone stems from individual countries having expenditures that are much bigger than their revenues. Moreover, these are expenditures that are no longer sustainable in the short, medium and long – term. The euro debt crisis can be traced way back when the economies of the PIIGS (Portugal, Ireland, Italy, Greece and Spain) demonstrated signs of needing a fiscal bail out after the 2008 global crisis. In fact, some of the PIIGS countries have been bailed out by Germany and France and institutions like he International Monetary Fund (IMF) and the European Central Bank (ECB). The bailouts were necessary to rescue the countries from the impending danger of defaulting on their debts. The bailed out countries so far are Greece (twice), Ireland, Spain and Portugal. The current euro crisis is quite similar to the failure of the first bailout to rescue Greece despite massive fiscal interventions, including the controversial austerity measures. The possibility of an Italian default has posed the biggest threat to the Euro zone. It is been feared though Italy is too big to fail, fall and default on its debt obligations, if it does, that would have systemic and contagion effects across the Euro zone and beyond. The US debt crisis The key issue in the US debt crisis is the long-drawn-out debate on whether to elevate the country's borrowing maximum threshold of about $14 trillion or not. The US took up a marathon amount to finance its public expenditures that outweigh its revenues by far. In fact, by the August 2, it had reached its legal borrowing limit of about $14 trillion. Everyone is waiting for a go ahead signal from the senate in this regard. This mighty global economy would default on its debts, if it's short of the legal permit to borrow beyond the maximum threshold, which means it won't be able to honor its domestic and foreign financial obligations any longer. Clash of opinions between Democrats and Republicans held the permit to borrow beyond the maximum limit until the eleventh hour of the day. This kept the investors in financial markets across the globe quite nervous. According to Standard and Poor's (S&P), Moody's and Fitchs Ratings the US credit rating was downgraded by one notch from AAA to AA plus and this downgrade are likely to have far-reaching economic implications across the globe. Comparative study Apparently, the Euro zone and US crises may seem to be two different types of crises, there is a common denominator between them. Both debt crises are triggered by having expenditures that are greater than revenues. It is result of living beyond one's income at unsustainable levels at the national, individual as well as household levels. These unsustainable public expenditures partly originate from the expenditures in the arguably too generous stimulus packages, bailouts as responses to the 2008 economic crisis and most importantly high military expenditures including on wars outside their jurisdictions. Especially, in the case of the US, there are possible triggers of huge fiscal deficits stemming from colossal public expenditures as well. Impacts of the crises The two crises on both sides of the Atlantic have far-reaching economic consequences. Global financial markets suffered on the week following the US downgrading, Asian markets opened on negative territory by falling by two percent 7th august, which was now feared to be a ‘black Monday' and even European markets were in very intense volatility in the beginning of the same week. The two crises may potentially lead to another economic crisis similar to the one of 2008 and this time it may become a double-dip recession. The weak, fragile and shaky financial recovery that started to set in around 2010 is now being tested by the strong and rough waves of the Euro zone and US debt crises. ** Sidney Terrell is a contributor associated with Oak View Law Group and has written several articles on debt consolidation, debt settlement, bill consolidation and get out of debt for various financial websites. BM