The Aug. 8 loss of 634 points on the Dow Jones industrials is not a sign that the world is worried about a default on United States bonds. Unlike Greece or Italy, which borrow in a currency they don’t control — the euro — the U.S. government borrows in its own dollars. As Alan Greenspan noted on “Meet the Press,” in an emergency the U.S. government can print dollars.

That is not the solution. If the markets thought it was, the dollar would have plunged, and it did not. It went up against the euro, the pound and the yen. At the moment, the U.S. currency is stable. It has fallen in the past few years, however, which reflects seriously on the financial policy of the United States.

Following the George W. Bush bailouts, the Obama administration has responded to the recession with even larger doses of borrowing and spending. The Federal Reserve has also printed money under the name of “quantitative easing.”

This was the stimulus that did not stimulate. There has been almost no recovery. That may be because the medicine wasn’t strong enough, or that it wasn’t much of a stimulant. Now the world realizes that it doesn’t matter. Greater and greater doses are simply unaffordable.

That is the news from Europe. The Greeks have to cut back. All the countries in trouble have to cut back.

The reason for the downgrade, S&P said, was that the debt-ceiling deal “falls short.” It is not enough to keep the debt from growing as a percentage of economic output. Stabilizing the debt requires deeper cuts “in the growth of public spending, especially in entitlements,” S&P said, plus the expiration of the Bush tax cuts or equivalent increase in taxes.

All of which means less medicine from Washington, D.C. There may be some little stimulants made to look like big ones, but essentially the patient is on its own.

— The Seattle Times, Aug. 8