What if Cyprus Was America?

A blog about business and economics.
March 22 2013 11:59 AM

Scaling Cyprus up to American Size

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Cypriot empoyees of the Laiki Bank cries during a protest outside the Parliament on March 21, 2013 in Nicosia.

Photo by PATRICK BAZ/AFP/Getty Images

Here's a useful Kevin Drum point about Cyprus:

Just to give you an idea of what all the numbers mean, the EU/IMF plan requires Cyprus to come up with about $7.5 billion as its share of the bailout. That's roughly a third of their GDP. To put that into local terms, it would be as if the United States were being asked to pony up $5 trillion. This is about equal to all government spending—federal, state, and local—for an entire year.
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Very true. That said, recall that the Cypriot banking system has deposits worth 8 times Cyprus' GDP. That's as if our banks had $120 trillion. And imagine that the vast majority of that $120 trillion was held by Russians. You can see why outsiders we were begging for money would have "why don't you take it from the Russians" as their first instinct.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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